OFFICE OF
HENRY A. KISSINGER

April 8, 1986

Dear Chancellor:

I received your letter of March 10 concerning Juan Nigorra, which just arrived courtesy of the Embassy. I wanted to let you know that I took the liberty of sending a note along to Father Healy, who is President of Georgetown University and a good friend. I hope this is helpful, and that the outcome is a happy one.

With all good wishes,

His Excellency
Bruno Kreisky
c/o Austrian Embassy
2343 Massachusetts Avenue, N.W.
Washington, D. C. 20008

SUITE 1021 • 1800 K STREET, N. W. • WASHINGTON, D. C. 20006 • (202) 872-0300

[4]

4/3/86

HAK:

At back is the Bruno Kreisky FYI only letter to
you concerning the Spanish student, Juan Nigorra,
who wants to be accepted at Georgetown.

You asked for a letter to Father Healy.

Immediately attached is a suggested letter

✓ Approve (Sign) to Healy

as edited ____

If you want the option to write to former
Chancellor Kreisky personally, also attached
is a brief letter to him.

____ Approve (sign) to Kreisky

as edited ____

Or would you want us just to send a copy of your
Healy letter to Kreisky, with a staff transmittal?

yes ____

Rosemary

(Kreisky letter)

BRUNO KREISKY

Vienna, March 10, 1986

Dear Sirs,

Mr. Juan Nigorra, who has successfully majored in political science and economics at St. Louis University in Madrid, is applying to be admitted as a regular student at your internationally renowned university.

While I do not wish to interfere in your internal affairs I should like to assure you that in the course of my repeated stays in Majorca in the last ten years I have got to know Mr. Juan Nigorra as a highly talented and promising young man. As I feel sure that his language skills and his knowledge in particular in the field of international politics will enable him to pursue a course of studies most successfully, I should like to recommend him most warmly. At the same time I am convinced that training young leaders at your university would make a significant contribution to the strengthening of the young Spanish democracy.

Georgetown University
Board of Directors

37th and O Streets, N.W.
Washington D.C. 20057
U S A

2

[lc]

If you ever applied for admission to Georgetown University? NO For what status? Fresh Soph...

To which school did you apply? Arts & Sciences A, Foreign Service ☐, Business Administration ☐,

Languages & Linguistics ☐ or Nursing ☐

If you are not presently attending college, attach a statement describing your activities since your last academic work.

Have attended more than one college prior to applying to Georgetown, attach an explanation.

List any language other than English which you speak fluently: English, French, Spanish, Mallorquin

Is the language predominantly spoken in the home? Spanish

## CANDIDARY SCHOOLS AND DATES OF ATTENDANCE

MT. ST. MARY'S (SJ) 80-83 2 LE ROSEY 83-84

Name Dates

Name Dates

City & State City & State

## COLLEGES PREVIOUSLY ATTENDED (Begin with current or most recent):

ST. LOUIS UNIVERSITY 84-86 2

Name

Name

City & State City & State

Dates of Attendance, Credits Earned and Degrees Received

Units of Attendance, Credits Earned and Degrees Received

Present class standing (freshman, sophomore, junior) Sophomore

The SAT or ACT results are required of all applicants. Please indicate when you have taken (or will take) the College Board and/or ACT exams. 25th January 1986

American School (Baleares) SAT ☐ ACT ☐

Date (month, year)

Please list below the courses in which you will enroll during the spring semester or winter and spring quarters at your current institution.

Course No. & Credits Course Title Course No. & Dept. Course Title Credits

## GEORGETOWN. Art and Sciences to get the Political Sciences Major.

Note: An evaluation of transfer of credits cannot be completed until both the above information and course descriptions are received.

### Financial Aid

Please check at left if you request financial aid. You must submit the Financial Aid Form so that it is received at Georgetown from the College Scholarship Service by March 1, 1986 to ensure full consideration for financial aid. There are no other forms for applying for aid at Georgetown. Please consult the leaflet "Information for Transfer Candidates" or "Georgetown Financial Aid", available from the Admissions Office, for further information.

Who will be responsible for your financial obligations? Father, Miguel NIGORRA

Are you currently receiving aid? If so, please list type and amount (Grant, Loan, BEOG, Jobs, etc.) None.

Commuter

Please indicate at left whether you wish to be a resident student or a commuting student. Check "Resident," if you wish to take part in the housing lottery to live on campus.

Resident

[lc]

6

Please list the secondary school, college, community or summer activities in which you have been most involved, in order of importance to you

<table><thead><tr><th></th><th>Positions Held or Awards</th><th>Years Participated</th></tr></thead><tbody><tr><td rowspan="2">Golf</td><td>Cup for Golf</td><td></td></tr><tr><td>at Santa Ponsa</td><td></td></tr><tr><td>Horse Riding</td><td>Golf Club</td><td></td></tr><tr><td>Good in: Shooting, Rugby, Water-ski</td><td></td><td></td></tr></tbody></table>

Please list your most significant employment experiences

<table><thead><tr><th>Employer</th><th>Position</th><th>Hours Per Week</th><th>Dates</th></tr></thead><tbody><tr><td>NONE</td><td></td><td></td><td></td></tr></tbody></table>

Please indicate any special talents or skills which you possess

Concentration and Great Interest in Life in General

IN ORDER FOR THE APPLICATION TO BE PROCESSED, THE STATEMENTS BELOW MUST BE COMPLETED:

* Please attach the required essay(s) described on page 5 to the top of this page.

* Attach a brief statement discussing the significance to you of your involvement in one or two of the activities, travel, study or employment experiences listed above.

* Students presently attending a four year college should attach a brief statement indicating their reasons for leaving their present institution.

The applicant and his parent or guardian understand and agree that this application and any other information received by the Admissions Office in connection with this application are the property of Georgetown University and shall be strictly confidential and shall not be disclosed to anyone other than officials of Georgetown University except at the discretion of the Dean of Admissions. Enrolled students have access to the contents of their files except for confidential documents to which access has been waived by the student.

It is further agreed and understood by both the prospective student and his parents that Georgetown University is a private institution, and as such retains the right to terminate a student's matriculation at any time his academic performance is seriously deficient or his conduct becomes injurious to the maintenance of good order or disruptive of an academic atmosphere. The applicant also affirms that the information and statements contained in this application are true, correct and complete.

Date 19th January 1986

Applicant's Signature

Date 19th January 1986

Parent's or Guardian's Signature

After consulting the enclosed leaflet, please indicate below which school you wish to attend, and which major within that school you wish to pursue. (PLEASE CHECK ONLY ONE MAJOR). If you wish to apply to more than one school at Georgetown, please submit an application form, an application fee, and duplicate transcripts for each school, and check the box at right

## X College of Arts and Sciences

### Bachelor of Science

☐ Biology

☐ Chemistry

☐ Computer Science

☐ Mathematics

☐ Physics

☐ Psychology

### Bachelor of Arts*

☐ Classics

☐ Economics

☐ English

☐ Fine Arts**

☐ French

☐ German

☐ Government

☐ History

☐ Philosophy

☐ Sociology

☐ Spanish

☐ Theology

☐ PRE-MEDICAL

☐ PRE-DENTAL

Students interested in preparing for medical or dental school may major in any department of the College. If you intend to take science courses in preparation for medical or dental school, please check here and select one of the programs of study listed.

* In the Bachelor of Arts program, major selections are not finalized until the end of sophomore year. Students hoping to enter sophomore year should indicate their present intentions nonetheless. Students applying to enter junior year should indicate their final selection of major.

A portfolio must be submitted as part of the application for admission.

** Please check the box at right if you are applying for the studio art major. ☐

## ☐ School of Nursing

## ☐ Edmund A. Walsh School of Foreign Service

☐ International Economics

☐ Comparative and Regional Studies

☐ History and Diplomacy

☐ Humanities in International Affairs

☐ International Politics

School of Foreign Service students select their division of concentration in the spring of the sophomore year. Applicants to the junior class should therefore indicate their final selection of a division. Applicants to the sophomore class should indicate the division in which it is most likely they will pursue their studies.

What language(s) do you intend to study at Georgetown?

## ☐ School of Languages and Linguistics

☐ Arabic

☐ Japanese

☐ Chinese

☐ Linguistics

☐ French

☐ Portuguese

☐ German

☐ Russian

☐ Italian

☐ Spanish

Note: Please check only one major from among those listed at left. If you wish to study additional languages, please list them in the space below.

Those majoring in linguistics should indicate below the language they plan to study:

Note: Previous study in the languages chosen is not necessary.

## ☐ School of Business Administration

☐ Accounting

☐ Management

☐ Finance

☐ Marketing

☐ International Management

Juan NIGORRA

Date of birth: July 19, 1967

Mailing address:

Plaza de España, 4
Palma de Mallorca
SPAIN

He studied 5 years in:

- Prior Park in Bath (England) and in

- Mount St. Mary's (Jesuits' College)
  Spinkhill
  Near Sheffield 551 9YL (England)
  He prepared "O levels" in Mount St. Mary's

1 year (1983 - 1984) in

- Le Rosey
  Rolle (Switzerland)

- Admission in September 1984 in Saint Louis University, Madrid (Spain), where he studied 3 four-month terms in Politics and Economics, having achieved 45 Credit Hours. He expects to achieve 15 Credit Hours more during the current four-month term.

In Saint Louis he showed a major success in Politics; he therefore wants to enter in the Georgetown University to keep on studying those subjects in which he is getting on quite well:

Politics ............: A, A, A, A-.
History .............: A, B.
Theology ............: A.
Spanish Literature : B+.

He sent the definitive application to the Georgetown University with the results of the TOEFL with 577 marks. On the 29th of January 1986 he did the examen of the SAT here in Palma, having given the order to send it directly to the Georgetown University.

Palma de Mallorca, February 5, 1986.

Luis NIGORRA

Date of birth: August 4, 1968

Mailing Address:
Plaza de España, 4
Palma de Mallorca
SPAIN

He studied 5 years in:

- Mount St. Mary's (Jesuits' College)
  Spinkhill
  Near Sheffield S31 9YL (England)

Since September 1984 he is in:

where he prepared 8 "O levels" with the following marks:
A, B, B, B, B, C, C, C.

During the current term he is preparing three "A levels:
Economics, Mathematics and Spanish.

From Le Rosey he sent the definitive application to Georgetown
University. Some time ago, he sent the result of the SAT:
English - 480 marks, and Mathematics - 620 marks. He had a per-
sonal meeting in Geneve with the representative of the Universi-
ty.

[LC]

# Antæus

"The most distinguished literary magazine in the English language."

—Tennessee Williams

"... *Antaeus* has emerged as one of the most attractive and readable literary periodicals in English."

—Stanley Kunitz

*Antaeus* is published in the spring and the fall and contains fiction, essays and poetry by the finest contemporary writers, both new and established. Frequent special issues are devoted to particular subjects or writers.

*$15.00 for two issues (ONE YEAR)*
*$20.00 for four issues (TWO YEARS)*
*$37.00 for eight issues (FOUR YEARS)*
*$53.00 for twelve issues (SIX YEARS)*

Newsstand price from $7.50-$10.00
SUBSCRIBE AND SAVE UP TO $5.00 PER ISSUE

ALL ANTAEUS SUBSCRIBERS ARE ENTITLED TO
A 20% DISCOUNT ON ECCO PRESS BOOKS.

[LC]

ANTAEUS 55

AUTUMN 1985

Antaeus 55, Autumn 1985, contains over 300 pages of fiction, poetry and essays. A recent autobiographical essay by Paul Bowles opens the issue. There are poems by Galway Kinnell, Derek Walcott, Czesław Milosz, Tess Gallagher, Zbigniew Herbert and W. S. Merwin; fiction by Tobias Wolff, Francine Prose, James Purdy, Louise Erdrich, William Trevor, T. Coraghessan Boyle and others. Also included are essays by Denis Donoghue and Stanley Kunitz and a collection of letters from Marina Tsvetaeva.

$10.00

$10.00

ANTAEUS 56

SPRING 1986

Antaeus 56, Spring 1986, is devoted to critical essays on the work of Ford Madox Ford. Edited by Sondra Stang, America's foremost authority on Ford, the issue will contain essays by William Gass, Stanley Plumly, Mary Gordon, William Carlos Williams and many others.

This special issue features a cover by David Hockney.

Antaeus 57, Fall 1986 will be a special issue featuring writers on nature. Advisory editors: Annie Dillard, Gretel Ehrlich, Robert Finch, John Hay, Edward Hoagland, and Barry Lopez.

PAUL
BOWLES

*An Autobiography*

*Without Stopping*

*Without Stopping*
$8.50 paper

PAUL BOWLES

Paul Bowles has been the intimate of many writers, actors, musicians, and artists; his personal story is a lively history of the arts and of the writer in exile. His close friendships with Gore Vidal, Gertrude Stein, Tennessee Williams, Truman Capote, Virgil Thomson and many others are detailed in *Without Stopping*. He also chronicles his marriage to Jane Bowles, their travels and eventual settlement in Tangier, where he continues to live.

"One of the first things I did was to go around to 27 rue de Fleurus and find Gertrude Stein's door. When I rang the bell, the maid answered and said that Mademoiselle was busy. I could hear the sound of women's voices coming down from the stairwell and I said I had just arrived from America and must see her, if only for a moment. The girl made me wait outside. Soon Gertrude Stein appeared, looking just as she did in her photographs, except that the expression of her face was rather more pleasant. 'What is it? Who are you?' she said. I told her and heard for the first time her wonderfully hearty laugh. She opened the door so that I could go in. Then Alice Toklas came downstairs, and we sat in the big studio hung with Picassos. 'I was sure from your letters that you were an elderly gentleman, at least seventy-five,' Gertrude Stein told me. 'A highly eccentric elderly gentleman,' added Alice Toklas. 'We were certain of it.' They asked me to dinner the following night."

—Paul Bowles from *Without Stopping*

Other books by

Paul Bowles:

*The Delicate Prey*
$8.95 paper

*The Sheltering Sky*
$8.95 paper

*Up Above the World*
$7.95 paper

*Their Heads Are Green and Their Hands Are Blue*
$8.50 paper

*Points in Time*
$12.50 cloth

[LC]

UPCOMING TITLES

(will be available after April, 1986)

*Blood Meridian* by Cormac McCarthy $ 9.50 paper

*The Fifth Queen* by Ford Madox Ford $11.50 paper

*Hard Labor* by Cesare Pavese
translated by William Arrowsmith $ 9.50 paper

*Minor Monuments: Selected Essays by*
*Howard Moss* $17.50 cloth

*Selected Poems* by Zbigniew Herbert,
translated by Czeslaw Milosz and Peter
Dale Scott $ 7.50 paper

*Selected Essays* by R. P. Blackmur,
includes essays on Emily Dickinson, Henry
James, Thomas Mann and many others. $17.50 cloth

*Shakespeare's Dog* by Leon Rooke $ 8.50 paper

*The Swell Season* by Josef Skvorecky $ 8.50 paper

The Tales of Chekhov Volume 9,
*The Schoolmistress and Other Stories* $ 8.50 paper

The Tales of Chekhov Volume 10,
*The Horse-Stealers and Other Stories* $ 8.50 paper

*Unattainable Earth* by Czeslaw Milosz $17.95 cloth

Also, new editions of:

*The Delicate Prey* by Paul Bowles $ 8.50 paper

*Provence* by Ford Madox Ford $ 9.50 paper

Please ask for a complimentary catalogue

[LC]

SELECTED BACK ISSUES
OF ANTEUS

**Antaeus 6** ($5.00) highlights: Joseph Brodsky, Anna Akhmatova, Osip Mandelstam, William Burroughs, C. P. Cavafy, W. S. Merwin, Andrei Voznesensky and an interview with Stanley Kunitz

**Antaeus 17** ($5.00) highlights: Kingsley Amis, Derek Walcott, Seamus Heaney, John Ashbery, Louise Glück, Carolyn Forche, David St. John, Charles Olson on Ezra Pound.

**Antaeus 21/22** ($6.00). Special issue on the general essay: W. H. Auden, Raymond Chandler, Ezra Pound, Francis Ponge, Michael Butor, Virgil Thomson, Gail Godwin, Leslie Fiedler, Ishmael Reed, Hortense Calisher, Roland Barthes, Richard Howard, Octavio Paz, Federico Garcia Lorca.

**Antaeus 36** ($5.00) highlights: Jane Bowles, Guy Davenport, Annie Dillard, Carlos Fuentes, William Matthews, James Merrill, Joyce Carol Oates, George Seferis, Wallace Stevens, James Wright.

**Antaeus 40/41** ($12.00). Tenth Anniversary Issue including: Jorge Luis Borges, Stanley Elkin, John Fowles, John Hawkes, Tennessee Williams, Ann Beattie, Louise Glück, Robert Hass, Yannis Ritsos, Charles Simic, Charles Wright, Robert Penn Warren, John Gardner, Italo Calvino, Henry James, Dylan Thomas.

**Antaeus 44** ($5.00) highlights: William Trevor, R. K. Narayan, Herman Hesse, H. D., William Stafford, Carlos Drummond de Andrade, Sandra McPherson, Eugenio Montale, Paul Bowles.

**Antaeus 45/46** ($8.00). Special Autobiography Issue including: Elizabeth Hardwick, Russell Banks, Robert Fitzgerald, Nadine Gordimer, John Fowles, Tennessee Williams, James Wright, Italo Calvino, Annie Dillard, Stanley Elkin.

**Antaeus 49/50** ($8.00). Contemporary Fiction Vols. II & III including: Tobias Wolff, Max Apple, Jonathan Baumbach, Nicholas Delbanco, Joyce Carol Oates, Tess Gallagher, Raymond Carver, Leon Rooke.

**Antaeus 53** ($10.00) highlights: Susan Sontag, Cormac McCarthy, Mark Strand, Eugenio Montale, Seamus Heaney, Denis Donoghue, William Gass, Donald Justice, Larry Levis, Zbigniew Herbert, Andre Dubus, Ford Madox Ford.

HENRY A. KISSINGER

February 10, 1986

Dear Jack:

I have been approached by John P. Gould, Dean of the University of Chicago Graduate School of Business, with a plan to honor George Shultz, which I believe to have great merit.

Dean Gould is heading a low-key campaign to establish the George Shultz professorship. I believe this is an excellent manner in which to honor George's accomplishments and service to our country, and it is certainly a tribute he deserves. I understand George is aware of Dean Gould's efforts, and while he has agreed to the undertaking, he did request the School pursue a quiet campaign.

Should you share my high opinion of the establishment of the Shultz chair and be interested in joining me and a few others as sponsors of the professorship, perhaps you would be able to find time in your busy schedule to meet with Dean Gould so he can personally apprise you of his efforts. Dean Gould will probably be in touch with you in the near future to determine if you are interested in joining him and others in this endeavor.

Mr. Henry J. Heinz, II
H. J. Heinz Company
Post Office Box 57
Pittsburgh, Pennsylvania 15230

TWENTY-SIXTH FLOOR · 350 PARK AVENUE · NEW YORK, NEW YORK 10022 · (212) 759-7919

[LC]

100 years of progress

Time present and time past
Are both perhaps present in time future
And time future contained in time past

T S ELIOT

Our centenary is something to celebrate. Merely to
have survived for 100 years is reason enough. To
have achieved such success, grown to such stature,
earned such public esteem is even greater cause.
It is natural to pause and look back to our begin-
nings, remind ourselves of the exploits of our
youth and take pride in attainments of later years.

True, there are some who scorn nostalgia, main-
taining that letting one's thoughts wander back
through time — pleasant though that may be — can
hardly be fruitful.

The past is over and done with, to be sure, and we
can do nothing about it. But we *can* help to shape
our future. We stand a better chance of doing that
if we know whence we came, and understand
how we grew into what we are today.

Published by:
H J Heinz Company Limited
Hayes Park, Hayes, Middlesex

Printed by:
Lockwood Lithographics

Phototypesetting by:
Goodfellow & Egan

Research/writing:
Nick Cutcliffe

Design: Ken Vail

Editor: John Aspery

April 1986

The great difficulty in compiling this brief history
has been deciding what must be left out, for our
story is rich with incident. The men and women
whose working lives created that story are num-
bered in their tens of thousands, but only a few
could be mentioned.

Much has been omitted, therefore, which would
certainly have earned inclusion had space allowed.
It is hoped, nevertheless, that this sketch of our
first 100 years of progress will serve to remind
Heinz people of their heritage.

UNIVERSITY OF MINNESOTA
TWIN CITIES

Department of Economics
1035 Management and Economics
271 19th Avenue South
Minneapolis, Minnesota 55455

OCT - 6 1986

October 1, 1986

Dr. Henry A. Kissinger
Twenty-Sixth Floor
350 Park Avenue
New York, New York 10022

Dear Henry:

It was good, as always, to see you at the BNL meeting. I particularly appreciate your follow-through on soccer, on of the finest analytical articles you have ever written!

Having watched a World Cup soccer game for the first time when Brazil beat Germany this year, I may yet become a soccer fan. After all, I did win my numerals in soccer at Oberlin in the early thirties, a hitherto unrevealed highlight of my athletic career.

I hope we will see each other before the Madrid meeting.

WWH:sjh

P.S. I enclose a few of my recent "Nightly Business Report" scripts.

CAN WE AFFORD MORE PUBLIC INVESTMENT?

Script for the
"Nightly Business Report," PBS

October 15, 1986

by

Walter W. Heller
University of Minnesota

Recently on this program, Adam Smith asserted that before long, this country
will again recognize the need for expanding government programs that contribute
to economic efficiency, growth, and competitiveness. To coin a phrase, I couldn't
agree more!

Indeed, the devout supply-siders really missed a bet by their failure to
recognize the need to beef up programs of public investment that are vital to
private economic health and growth, even if this requires some added tax revenues.

I refer first of all to investments in human brainpower, in the public
education required to cut down our appalling level of illiteracy and to equip our
population to compete more effectively in a high-tech world. But beyond this,
everything from highway and air transport to water treatment and waste disposal
require public investment to go hand in hand with private investment to promote
growth.

Granted, there is little evidence that we are willing to pay for this kind
of public investment. We have not even been coming within $200 billion a year of
paying for the civilian and military services we demand from the federal govern-
ment. And far from showing a national will to invest in the future, we have
been on a consumer binge financed by liquidating our assets overseas, by gorging
on a huge flow of imports, and by depressing our national savings and investment
rates to the lowest levels in half a century.

Can't we afford to do better? Of course we can:

* We are still the richest country on earth, with the highest levels of wealth per capita and the highest annual flow of goods and services per capita.

* Our total federal, state, and local taxes, at 29% of GNP, are the lowest of any advanced country except Japan.

* And recent studies have shown that we are by all odds the least socialized industrial economy in the world.

No amount of political rhetoric can refute these hard cold facts. We are
entirely capable of paying our bills and investing in the future. What's missing
is not the way, but the will.

STOCK VALUES AND CORPORATE CASH FLOW

October 1, 1986

by

As one looks for sources of strength in a queasy stock market and seeks
explanations of what kept the 1985-86 bull market going for so long, one could do
worse than take a close look at corporate cash flows. Peeling off the outer
layers of a profit performance that looks pretty lackluster, one gets down to
an impressive record on cash flows.

Yes, falling interest rates, a declining dollar, and sliding oil prices have
all played a role. But in the last analysis, the value of stocks rests on
earning power. Here we find that reported *book profits* after taxes, while rising
about 10% in the last year and a half, are still running below their 1980 levels.
But there's more bull than bull market in this number.

We get a very different picture if we add back into profits the excess
depreciation allowed by our tax laws. If we deduct only normal depreciation, we
find that *economic* profits are running close to $300 billion a year, far above
their 1980 level of $177 billion.

Probe still deeper and look at *internal cash flow*, that is, what firms have
left after paying all their current bills. Now the numbers get even more impres-
sive. Corporate cash flow has nearly doubled since 1980, to a current rate of
nearly $500 billion this year. That includes an upswing of $75 billion or so
in the past two years.

This striking performance has enabled companies to boost dividends from $55 billion in 1980 to a rate of about $90 billion at present. With the remaining cash of over $400 billion this year, corporate America has plenty of clout to invest in plant and equipment, boost dividends, or lend money to others.

Won't tax reform curb depreciation and cripple cash flows? Not all that much. Indeed, not enough to keep those cash flows from continuing to climb during the rest of the decade.

Granted, the strong behavior of cash flows cannot alone generate a bull market. But it has certainly helped.

[L.C.]

WEAKENING ANTI-TRUST

September 17, 1986

by
Walter W. Heller

University of Minnesota

One of the many puzzles about Reaganomics is why Mr. Reagan has gone so soft on anti-trust. One of the central tenets of economic conservatism in the past was to fight fiercely to break up monopolies and undue concentrations of economic power that undermine competition and subvert the free market.

Today, the criterion seems to be solely: Is the merger or acquisition likely to promote economic efficiency, no matter whether that shows up in lower prices or higher profits? And apparently, the Reaganites see efficiency served by every merger that comes down the pike, no matter how many junk bonds it spawns or how much it increases concentration of power.

When James Miller, now Reagan's budget director, headed the Federal Trade Commission, he took no companies to court on grounds of monopolization, price fixing, or price discrimination. In fact, the Commission dismissed pending merger and monopoly cases brought by previous administrations, both Democratic and Republican.

The new leniency also shows up in the White House proposal to weaken the anti-trust laws. It would, among other things, provide anti-trust immunity for mergers in industries hurt by foreign competition. That seems absurd: The consumer would suffer from both less competition from abroad and curbed competition at home.

This is not to say that all anti-monopoly fervor is dead in Washington. The Justice Department is cracking down on bid-rigging, collusion, and horizontal price fixing. And its Anti-Trust Division also opposed, on monopoly grounds, recent airline mergers that were then approved by the Transportation Department and President Reagan.

Further, one can make a good case for permitting companies to collaborate on research, as in the case of the computer consortium.

But it is disquieting that the White House shows so little concern about merger mania, even in cases that may weaken our financial fabric and shortchange the consumer.

ECONOMIC STRENGTH IN THE ASIA-PACIFIC WORLD

September 3, 1986

Let me devote my time today to a part of the world that we -- at least those of us in the Midwest and East -- too often neglect. I refer to the developing countries of the Pacific basin, namely, South Korea, Taiwan, Hong Kong, Singapore, Thailand, Malaysia, Indonesia, and the Philippines.

Loose thinking might lead us to believe that most of them are part of the debt-ridden, slow-growth Third World. But the facts -- one can almost say the startling facts -- don't support that downbeat view. Actually, much of the Pacific Rim is booming, has its foreign debts under control, and is exporting like mad to the United States.

Perhaps you already knew that, perhaps you didn't. In either case, the facts are fascinating. Unlike Latin America, where most countries are groaning under the burden of their external debts, the only one of the eight developing Pacific countries that has a tough debt problem is the Philippines. And it now seems to be on the comeback trail.

For the eight countries as a whole, external debt is less than half of their annual GNP and is roughly equal to their annual exports of goods and services. And half of the group are enjoying growth rates well above ours: Korea and Taiwan are growing at 7-9% rates, and Hong Kong and Thailand, at roughly 5%.

Those economies are riding the crest of an export wave to the United States. Their currencies have not risen relative to the dollar, so the dramatic drop in the dollar relative to most other world currencies leaves them unscathed. Indeed it enables them to hold their prices down and their sales up in the rich U.S. market and thus increase their market share.

Granted, Indonesia and Malaysia are being hit by falling world oil and commodity prices, Singapore has been hit by slow recovery around the world, and the Philippines have a long way to go. But except for the oil exporters, the economic prospects for all these countries are bright.

When we add to this picutre the strong Japanese economy and a Chinese economy expanding at a rate of 7-8% a year, we can see that, in contrast to sluggish growth in Europe and America, the Western Pacific is a bastion of growing economic strength.

TRANSLATION - jw

15 August 1986

Dear Dr. Kissinger:

Thank you very much for your letter of July 25th which
I haven't been able to answer before today, after a few
weeks of vacation with Gabriele in Sardinia. I am
honored that you have invited me to the meeting of the
International Councillors of the Center for Strategic
and International Studies at Georgetown University and
will be pleased to participate in the conference on
November 13-14.

With kind regards to you and Nancy, also from Gabriele,

DR. KONRAD HENKEL

4 DÜSSELDORF 1 · POSTFACH 1100

15. August 1986

AUG 13 1986

Sehr geehrter Herr Kissinger,

recht herzlich möchte ich Ihnen für Ihren Brief
vom 25.7. danken, den ich erst heute - nach
einigen Ferienwochen mit Gabriele in Sardinien -
beantworten kann. Ich finde es sehr ehrenvoll,
daß Sie mich zu dem Treffen des International
Councillors of the Center for Strategic and Inter-
national Studies at Georgetown University einla-
den und werde gern an der Zusammenkunft am
13./14. November in London teilnehmen.

Mit herzlichen Grüßen an Sie und Nancy, auch
von Gabriele,

TRANSLATION - jw

15 August 1986

Dear Dr. Kissinger:

TLCJ

AUG 25 1986

DR. KONRAD HENKEL

15. August 1986

Sehr geehrter Herr Kissinger,

Ihr

TRANSLATION - jw

17 November 1986

Dear Dr. Kissinger:

Thank you once again for the kind invitation to the CSIS
meeting in which I was able to participate last week.

Some interesting topics were discussed which offer food
for thought, and there were many good speeches from which
I have learned a great deal.

I was greatly impressed by the dinner hosted by the American Ambassador. The embassy is uniquely beautiful. Also the session itself in the National Westminster Bank with the view of London and the impressive conclusion was a pleasure and experience for me. I very much appreciate your giving me the opportunity to take part in this. I also met some interesting people and had the chance to exchange some views.

With warm regards to you and Nancy, also from Gabriele,

Yours,

Konrad Henkel

[L]

DR. KONRAD HENKEL

VORSITZENDER DES AUFSICHTSRATES
DER HENKEL KOMMANDITGESELLSCHAFT AUF AKTIEN

NOV 24 1986

4000 DÜSSELDORF 1, 17.11.86

POSTFACH 1100

Sehr geehrter Herr Kissinger,

sehr herzlich möchte ich Ihnen noch einmal für die
freundliche Einladung zum Treffen des CSIS danken,
an dem ich letzte Woche teilnehmen durfte.

Es wurden etliche interessante Themen diskutiert, die
zum Nachdenken anregen, und viele gute Vorträge gehalten,
aus denen ich manches erfahren habe.

Das Abendessen beim Amerikanischen Botschafter war für
mich ein großer Eindruck. Die Botschaft ist einmalig
schön. Auch die Tagung selbst in der National Westminster
Bank mit dem Blick auf London und dem eindrucksvollen
Abschluß war für mich eine Freude und ein Erlebnis.

Ich danke Ihnen sehr, daß Sie mir die Gelegenheit gegeben
haben, daran teilzunehmen. Ich habe zusätzlich einige
interessante Leute kennengelernt und hatte Gelegenheit,
mit ihnen Meinungen auszutauschen.

HENRY A. KISSINGER

February 24, 1986

Dear Alfred:

Professor Gardner has informed me you
are planning to do your best to join
the group in Venice for the seminar
during August 31-September 5. I am
pleased you are going to try to
arrange your schedule to be there for
at least part of the seminar, and I
hope our dates will coincide.

In the meantime, I hope to see you
soon, and do let me know when you are
next in New York.

All the best,

Dr. Alfred Herrhausen
Taunusanlage 12
6000 Frankfurt 1
Federal Republic of Germany

TRANSLATION - jw

May 28, 1986

Dear Henry:

To supplement our many conversations on the international debt crisis, the following describes once again the concept we discussed in Bonn:

Up to now the problem has been tackled in a three-phase approach. In the first phase, "fresh money" was made available to put the debtor countries in a position to pay their interest. This occurred not least for the benefit of American banks, which otherwise would be forced to record outstanding credits in default.

The second phase attempted to reduce the annual finance charges of the affected countries by deferring the maturities--that is, the repayment periods for the furnished credits were extended.

In the third phase then the affected countries should have regained their credit-worthiness in virtue of the stabilization program carried out in the interim and therefore again become "financeable" on the international financing markets.

My thoughts apply to the consideration that the debtor countries in the second phase are not in a position to calculate in advance the annual finance charges which they have to bear themselves. They know the repayment amount of their debt, of course, but not the interest amount. This is not tragic so long as the interest rates fall or remain stable. When the interest rate cycle climbs again--as is to be expected--the issue becomes significant, however,

For this reason, I propose two measures:

(1) Establish a ceiling for the interest rates the countries must come up with themselves.

(2) Create a fund which the debtor countries can then draw on when the interest rates exceed the ceiling rate (this could lie at 6-7 percent). The fund would have to be fed with monies from the governments, from international institutions such as the IMF and the World Bank and certainly also from the commercial banks. According to our calculations, it would comprise at least $25 billion, a maximum of $40 billion, depending on where the ceiling rate is fixed.

The advantage of such a fund would be that the affected
countries would have to pay the full principal amount,
of course, but would have to bear only part of it themselves.
The utilization would naturally have to be tied to all
regulations and conditions of the IMF and the World Bank;
that is, the responsibility of getting their own affairs
in order would remain for the debtor countries.

Politically such a fund would enable us to attain additional
goals:

(1) The lender countries would have to be interested in conducting a monetary policy by which the interest rates remain as low as possible because then the fund will not be drawn on. Low interest rates have beneficial effects on international economics, however.

(2) On the lender side, the fund should be open to all countries, however, which want to take part in such a partial solution to the debt problem. In this way, it would be clear very quickly that genuine assistance will come only from the western industrial countries, an aspect which is not insignificant in light of the political dangers in Latin America and Black Africa.

(3) Such an "act of good will" could bring peace to the scene (although it does not, of course, conclusively solve the problem, but rather affords assistance towards solution).

The basic argument from which all of my thoughts stem is as
follows: The international debt crisis is proof that the
transfer of wealth necessary from the developed countries to
the developing countries is not succeeding under strictly
economic conditions. In addition, political assistance remains
needed. The fund described herein could represent such assistance
along the lines of a second Marshall Plan.

Dear Henry, I regret that I cannot be available for the
discussion planned for June 12th. Should postponement be
possible to June 18th, I would do everything to come to New
York for it. I am very interested in taking part myself in
the future deliberations.

I wish to thank you very much for your committed interest.
Hopefully we will be able to continue our conversation soon.
In the meantime, my warmest regards.

Yours,

Alfred (Herrhausen)

MAY. 28 '86 17:21 KISSINGER ASSOCIATES N.Y.

P.001

DR. ALFRED HERRHAUSEN

28. Mai 1986

The Honorable Henry A. Kissinger
Kissinger Associates
350 Park Avenue,
26th Floor
New York, N.Y. 10022

Lieber Henry,

in Ergaenzung unserer mehrfachen Unterhaltungen ueber die
internationale Verschuldungskrise beschreibe ich nachfolgend
noch einmal die Konzeption, ueber die wir in Bonn gesprochen
haben:

Bisher ist das Problem in einem Drei-Phasen-Approach ange-
gangen worden. In der ersten Phase wurde "fresh money" zur
Verfuegung gestellt, um die Schuldnerlaender in den Stand zu
setzen, ihre Zinsen zu bezahlen. Dies geschah nicht zuletzt
im Interesse der amerikanischen Banken, die andernfalls
gezwungen gewesen waeren, ausstehende Kredite als notleidend
zu verbuchen.

In der zweiten Phase wurde versucht, die jaehrlichen
Finanzlasten der betroffenen Laender dadurch zu reduzieren,
dass man die Faelligkeiten hinausschob, d.h. die Tilgungs-
zeiten der gewaehrten Kredite wurden verlaengert.

In der dritten Phase sollten dann die betroffenen Laender
aufgrund der inzwischen durchgefuehrten Sanierungsprogramme
ihre Kreditwuerdigkeit zurueckerlangt haben und dadurch auf
den internationalen Finanzierungsmaerkten wieder finanzier-
bar werden.

Meine Gedanken setzen an der Ueberlegung an, dass die
Schuldnerlaender in der 2. Phase nicht in der Lage sind, die
jaehrliche Finanzlast, die sie selbst zu tragen haben, im
vorhinein zu kalkulieren. Sie kennen zwar den Tilgungsteil
ihrer Schuld, nicht aber den Zinsteil. Dies ist so lange
nicht tragisch, wie die Zinsen sinken oder stabil bleiben.
Wenn aber, wie zu erwarten ist, der Zinszyklus wieder nach
oben steigt, wird die Sache relevant.

MAY. 28 '86 17:22 KISSINGER ASSOCIATES N.Y.

P.002

DR. ALFRED HERRHAUSEN

2

Ich schlage deshalb zwei Massnahmen vor:

1. Ein Ceiling fuer die Zinssaetze einzufuehren, die die Laender selbst aufbringen muessen.

2. Einen Fonds zu schaffen, den die Schuldnerlaender dann in Anspruch nehmen koennen, wenn die Zinssaetze den Ceilingsatz uebersteigen (dieser koennte bei 6 - 7 % liegen). Der Fonds muesste gespeist werden aus Mitteln der Regierungen, der internationalen Institutionen wie IMF und Weltbank und wohl auch der Geschaeftsbanken. Nach unseren Berechnungen wuerde er mindestens $ 25 Mrd., hoechstens $ 40 Mrd. umfassen, je nach dem, wo man den Ceilingsatz ansetzt.

Ein solcher Fonds haette den Vorteil, dass die betroffenen Laender zwar den vollen Kapitalbetrag zahlen muessten, ihn aber nur zum Teil selbst zu tragen haben. Die Inanspruchnahme liesse sich natuerlich koppeln mit allen Vorschriften und Konditionierungen von IMF und Weltbank; d.h. die Pflicht, das eigene Haus in Ordnung zu bringen, bliebe fuer die Schuldnerlaender bestehen.

Politisch wuerden wir mit einem solchen Fonds zusätzliche Ziele erreichen koennen:

1. Die Geberlaender muessten daran interessiert sein, eine Geld- und Waehrungspolitik zu betreiben, bei denen die Zinsen moeglichst niedrig bleiben, weil dann der Fonds nicht in Anspruch genommen wird. Niedrige Zinsen haben aber weltwirtschaftliche Besserungseffekte.

2. Der Fonds sollte auf der Geberseite aber allen Laendern offen stehen, die bei einer solchen Teilloesung des Schuldenproblems mitwirken wollen. Es wuerde auf diese Art und Weise sehr schnell deutlich, dass wirkliche Hilfe nur von den westlichen Industrielaendern kommen wird, ein Aspekt, der im Hinblick auf die politischen Gefaehrdungen in Lateinamerika und Schwarz-Afrika nicht unwichtig ist.

3. Eine solche "Aktion guten Willens" koennte Ruhe in die Szene bringen (obwohl sie natuerlich das Problem nicht endgültig loest, sondern nur eine Hilfe zur Loesung darstellt).

MAY. 28 '86 17:23 KISSINGER ASSOCIATES N.Y.

P.003

DR. ALFRED HERRHAUSEN

3

Die Grundthese, bei der ich bei allen meinen Ueberlegungen
ausgegangen bin, lautet: Die internationale Schuldenkrise
ist ein Beweis dafuer, dass der notwendige Wohlstands-
transfer von den entwickelten an die Entwicklungslaender
unter rein oekonomischen Bedingungen nicht gelingt. Zusaetz-
lich bleiben politische Hilfen erforderlich. Der hier be-
schriebene Fonds koennte im Sinne eines zweiten Marshall-
Plans eine solche Hilfe darstellen.

Lieber Henry, es tut mir leid, dass ich an dem fuer den
12. Juni vorgesehenen Gespräch nicht verfuegbar sein kann.
Sollte eine Verschiebung auf den 18. Juni moeglich sein, so
wuerde ich alles tun, um dieserhalb nach New York zu kommen.
Ich bin sehr daran interessiert, an den weiteren Ueber-
legungen selbst mitzuwirken.

Ich darf mich recht herzlich fuer ihr engagiertes Interesse
bedanken. Hoffentlich koennen wir unser Gespräch bald fort-
setzen. Ich sende Ihnen fuer heute meine herzlichsten
Gruesse

Hi,

TRANSLATION - jw

New York, 18 June 1986

Dear Henry:

Before returning to Frankfurt, I want to thank you again
very much for the invitation to today's discussion. I am
not yet certain how to assess progress and outcome but do
hope that no ditches have been filled in [believe English
equivalent of this phrase might be "no bridges have been
burned"] (particularly among my American colleagues).

Since a conversation like today's certainly does not permit
all technical details to be addressed, I would like to
add two more thoughts:

1. The interest rate ceiling can of course also be fixed at the current market level and the fund then regarded as a "fleet-in-being" [??] which will then only be effective if the interest rates go up. The main thing here is the right political wording.

2. An arrangement can also be considered where the interest rate subsidies apply only to the old credits--credits obtained up to now--not, however, to new credits which would be agreed to under the Baker Plan or otherwise.

Perhaps this will be useful for further discussions you might
have. Specific planning of the technical details can first
begin, of course, whenever one wants to approach the issue.

I hope to see you again soon, be it in New York, Bonn or
Frankfurt--most preferably naturally at our house in Bad
Homburg.

[ ] = translator's remarks

JUN. 18 '86 16:20 KISSINGER ASSOCIATES N.Y.

P.001

DR. ALFRED HERRHAUSEN

New York, den 18. Juni 1986

The Honorable Henry A. Kissinger
Kissinger Associates
350 Park Avenue
26th Floor
New York, N.Y. 10022

Lieber Henry,

Bevor ich zurueckfliege nach Frankfurt moechte ich mich auf
diesem Wege noch einmal recht herzlich fuer die Einladung zu
dem heutigen Gesprach bedanken. Ich weiss Verlauf und
Ergebnis noch nicht recht einzuschaetzen, hoffe aber, dass
(insbesondere bei meinen amerikanischen Kollegen) keine
Graeben zugeschuettet worden sind.

Da man in einer Unterhaltung wie der heutigen ja nicht alle
technischen Details ansprechen kann, mochte ich gerne noch
zwei Gedanken nachschieben.

1. Selbstverstaendlich kann man den Ceiling-Zinssatz auch auf dem gegenwaertigen Marktniveau fixieren und dann den Fonds als eine "fleet-in-being" betrachten, die nur dann effektiv wird, wenn die Zinsen steigen. Es kommt hier sicherlich auf das richtige politische Wording an.

2. Es laesst sich auch an ein Arrangement denken, in dem die Zinssubventionen nur fuer die alten, d.h. die bisher aufgenommenen Kredite gelten, nicht jedoch fuer neue Kredite, die im Rahmen des Baker-Plans oder sonst wie vereinbart wuerden.

Vielleicht ist dies fuer Ihre eventuellen weiteren Ge-
spraeche nuetzlich. Die detaillierte Planung der technischen
Einzelheiten kann ja erst einsetzen, wenn man der Sache
naehertreten will.

Ich hoffe Sie bald wiederzusehen, sei es in New York, Bonn
oder Frankfurt, am liebsten natuerlich bei uns daheim in Bad
Homburg.

Herzliche Gruesse

TRANSLATION - jw

23 June 1986

Dear Henry:

Thank you very much for your letter of May 16th and your extremely kind words to Traudl and me. We truly enjoyed the evening with you in Bonn and hope that we will soon find another opportunity for a longer talk.

You should know that you have a standing invitation to Bad Homburg. Whenever you want and are able to visit, our house is at your disposal. Give us the pleasure of visiting us again soon, together with Mrs. Kissinger.

With warm regards from Traudl and me,

Yours,

Alfred (Herrhausen)

[L.C]

DR. ALFRED HERRHAUSEN

TAUNUSANLAGE 12

6000 FRANKFURT 1

TELEFON (089) 7150-3011

23. Juni 1986

Lieber Henry,

für Ihren Brief vom 16. Mai und die außerordentlich liebenswürdige Adresse an Traudl und mich möchte ich mich recht herzlich bedanken. Wir haben den Abend mit Ihnen in Bonn sehr genossen und hoffen, daß wir bald einmal wieder Gelegenheit zu einem längeren Gespräch finden.

Sie sollten wissen, daß Sie eine ständige Einladung nach Bad Homburg haben. Unser Haus steht Ihnen, wann immer Sie wollen und können, zur Verfügung. Machen Sie uns die Freude, uns bald wieder zu besuchen, möglichst mit Mrs. Kissinger zusammen.

Traudl und ich senden Ihnen viele herzliche Grüße.

JUN 30 1986

Mr. Henry A. Kissinger
Suite 1021
1800 K Street, N.W.

Washington, D.C. 20006
U.S.A.

TRANSLATION - jw

5 August 1986

Dear Henry:

Many thanks for your kind letter of July 8th. I was delighted
that I could be of help. Don't hesitate to approach me again
if another "lifesaver" is needed.

I'm sorry that we weren't able to have a follow-up after the
Argentine lunch. The problems certainly haven't gotten
smaller. Perhaps it would indeed be appropriate for us to
soon continue our talks and deliberations inasmuch as you
still feel that "something must happen".

Of concern to me at the moment is the relationship between
the FRG and the USA in light of the demand repeatedly raised
over there for increased stimulation of our economic growth.
The fact that in this the Bundesbank, as regards its monetary
policy, comes under criticism is surely unwarranted. Stimulation
measures of the kind described led us at the end of the '70s
and beginning of the '80s into the difficult situation which
the federal government at the time inherited on coming to
power. Much effort and many unpopular measures are required
to put the economy back in order.

I feel that American industry's shortage of success on the
export front cannot be counteracted--or at least not solely--
through greater world economic growth, but rather above all
through an increase in the international competitiveness of
American industry. Far too little gains in productivity have
been attained here in broad sectors in past years. Add to
this that besides the factors of quality and delivery
reliability, an efficient worldwide marketing system and a
high-class after sales service are absolute requirements for
marketing successes. Also in this area, I feel an "American
backlog" exists.

I would be delighted if we could meet again soon. Traudl
joins me in sending warm regards.

Yours,

Alfred Herrhausen

AUG. 12 '86 12:03 KISSINGER ASSOCIATES N.Y.

P.001

DR. ALFRED HERRHAUSEN

5. August 1986

Lieber Henry,

vielen Dank für Ihre so liebenswürdigen Zeilen vom 8. Juli. Es war mir ein Vergnügen, daß ich Ihnen behilflich sein konnte. Zögern Sie nicht, mich wieder anzusprechen, wenn ein neuer "lifesaver" erforderlich ist.

Es tut mir leid, daß wir nach dem Argentine lunch kein follow-up haben konnten. Die Probleme sind ja nicht kleiner geworden. Vielleicht wäre es doch richtig, wenn wir unsere Gespräche und Überlegungen bald fortsetzen würden, sofern Sie immer noch der Meinung sind, daß "etwas geschehen müßte".

Sorge bereitet mir zur Zeit das Verhältnis zwischen der Bundesrepublik und der USA im Hinblick auf die drüben immer wieder vorgebrachte Forderung nach einer stärkeren Intensivierung unseres wirtschaftlichen Wachstums. Daß dabei die Bundesbank in bezug auf ihre Geldpolitik unter kritischen Beschuß gerät, ist sicherlich ungerechtfertigt. Ankurbelungsmaßnahmen der beschriebenen Art haben uns Ende der siebziger und Anfang der achtziger Jahre in die schwierige Situation gebracht, die die derzeitige Bundesregierung bei Antritt ihres Amtes vorgefunden hat. Es erfordert viel Mühe und manche unpopuläre Maßnahme, das Haus wieder in Ordnung zu bringen.

Ich glaube, daß die mangelnden Erfolge der amerikanischen Wirtschaft an der Exportfront nicht under jedenfalls nicht alleine durch größeres weltwirtschaftliches Wachstum gemacht werden können, sondern in erster Linie durch eine Erhöhung der internationalen Wettbewerbsfähigkeit der amerikanischen Industrie. Hier sind in weiten Teilbereichen in den letzten Jahren viel zu geringe Produktivitätsgewinne erzielt worden. Es kommt hinzu, daß für internationale

DR. ALFRED HERRHAUSEN

TAUNUSANLAGE 12

6000 FRANKFURT 1

TELEFON (089) 7150-3011

September 1, 1986

SEP 9 1986

Dear Henry,

I was delighted to be able to talk to you recently on the tele-
phone. I have noted the date of the President's Dinner in
Washington on January 31, 1987. Thank you very much indeed for
thinking of me. As far as the question of Bohemian Grove is con-
cerned, I'm afraid I still cannot give you a definitive answer
because my wife and I are currently thinking about how to spend
our summer holidays, in which we are of course somewhat restric-
ted by the school vacation of our daughter Anna. As soon as I
know what we are doing, I shall let you know.

I was also very pleased to hear from you that you are coming to
our choral concert on Sunday, September 28, 1986. I am sure it
will be a great musical success and I do hope you will enjoy
it.

As I said, I would like to suggest that we meet for a private
discussion on the occasion of the IMF Conference in Washington.
I propose 9.30 a. m. for breakfast on September 29, 1986 at the
Madison Hotel. I do hope you still have room in your schedule.
Otherwise we shall have to talk to each other again on the tele-
phone or arrange a date and time in Washington. I'll stay in the
Madison.

In the meantime I send my very best wishes and kindest personal
regards to you and Mrs. Kissinger.

Sincerely yours,

Dr. Henry A. Kissinger
Suite 520
1800 K Street, N. W.

Washington, DC 20006
U.S.A.

HENRY A. KISSINGER

November 17, 1986

Dear Alfred:

Once again you came to my rescue by arranging
the private plane from Frankfurt to London
last week. Mr. Fischer could not have been
more accommodating, and I enjoyed chatting
with him.

I am sorry to hear that you won't be able to
join me at Bohemian Grove in July, but fully
understand the demands of your schedule. Per-
haps we'll have better luck another year. But
I am delighted you can join us in Connecticut
and attend the Alfalfa Club dinner in Washing-
ton in January. Closer to the date, you will
receive the official invitation.

Until then, I send my deepest gratitude.

[LCT]

NOV 10 1986

DR. ALFRED HERRHAUSEN

November 3, 1986

Dear Henry,

I was delighted to see you again in Paris, even if
only briefly, and am now very much looking forward
to the evenings we shall be together in New York
and Washington at the end of June 1987. Thanks
again most warmly for the kind invitation on these
two occasions.

trust This is a typo!

In the meantime, I have taken another look at my
calendar for July 1987 and I'm very disappointed
indeed to have to decline now after all. Much to my
own regret, my standing commitments are so heavy
that in July I can't spare the time the proposed
"adventure" would require. I am sure, however, that
you will understand my position, particularly since
you no doubt have a pretty good idea of the demands
on my time. My international commitments have grown
especially strongly, though that is, on the other
hand, to be welcomed here in the interest of the
affairs at hand and of the bank.

I do hope that we can perhaps meet again here in
Germany sometime before the planned get-together in
New York and Washington. You know that you have a
standing invitation from us to come to Bad Homburg
or Frankfurt. Please take us up on it whenever you
can.

The question of transport for your next visit to
Bonn has, I believe, meanwhile been settled.

Traudl joins me in sending warm regards to you and
Mrs. Kissinger.

Dr. Henry A. Kissinger
Suite 1021
1800 K Street, N.W.
Washington, D.C. 20006
U.S.A.

TRANSLATION - jw

25 November 1986

Dear Henry:

A number of your publications and/or statements prompt me to write to you and thank you for the clear and critical situation analysis you've made regarding current East-West relations in general and the "agreements" of Reykjavik in particular. Here in Europe and especially in West Germany a great amount of irritation and uneasiness is becoming noticeable because of the fear that "a war in Europe is again becoming conductable" based on the proposals made in Reykjavik.

I don't know exactly how to assess the way the situation is being judged in the meantime by the American Administration, but I hope that they've come to a somewhat more sober evaluation and are not continuing to be borne by the euphoria of an alleged agreement. In that respect I feel the Chancellor was right with his remark about the PR qualities of Mr. Gorbachev, even though a related reference to Josef Goebbels was certainly inappropriate.

I am disturbed over what has developed and possibly will continue to develop around the matter of weapons shipments to Iran. How could that happen, how must it be explained that the President has been left completely alone here, and the public get the impression that his advisers and closest confidants left him totally in the dark? I hope we will soon have an opportunity to talk about this and other matters.

In the interim I have explained to the German public my thoughts on the interest equalization fund. Reaction up to now has been entirely positive. At Deutsche Bank's next press conference December 3rd in Düsseldorf, I will certainly have a chance to discuss this again in detail with the journalists. Perhaps this stone thrown in the water will expand its horizon.

I hope that you and Mrs. Kissinger are well, and Traudl joins me in sending you both warm regards. I already look forward to our getting together the end of January. In the event you get to Germany in the meantime, please take us up on our standing invitation.

Yours,

Alfred Herrhausen

DR. ALFRED HERRHAUSEN

TAUNUSANLAGE 12

6000 FRANKFURT 1

TELEFON (089) 7150-3011

25. November 1986

DEC 1 1986

Lieber Henry,

veranlaßt durch mehrere Veröffentlichungen bzw. Statements von Ihnen fühle ich mich gedrängt, Ihnen zu schreiben und mich für die klare und kritische Bestandsanalyse zu bedanken, die Sie im Hinblick auf die gegenwärtigen Ost-West-Beziehungen im allgemeinen und die "Vereinbarungen" von Reykjavik im besonderen angestellt haben. Hier in Europa und speziell in der Bundesrepublik wird doch ein großes Maß an Irritation und Unruhe spürbar, weil man befürchtet, daß auf der Grundlage der in Reykjavik gemachten Angebote "ein Krieg in Europa wieder führbar wird".

Ich weiß nicht recht einzuschätzen, wie die Dinge inzwischen von der amerikanischen Administration beurteilt werden, aber ich hoffe, daß man zu einer etwas nüchterneren Einschätzung gekommen ist und sich nicht von der Euphorie eines vermeintlichen Konsens weiter tragen läßt. Insofern hat, glaube ich, der Bundeskanzler mit seinem Hinweis auf die Public Relation Qualitäten von Herrn Gorbatschow recht gehabt, wenn auch ein damit verbundener Hinweis auf Josef Goebbels sicher unangemacht war.

Bestürzt bin ich über das, was sich um den Komplex der Waffenlieferungen an den Iran herum entwickelt hat und vielleicht weiter entwickeln wird. Wie konnte das geschehen, wie muß man sich erklären, daß der Präsident hier völlig allein gelassen wird und die Öffentlichkeit den Eindruck gewinnt, als hätten ihn seine Berater und engsten Vertrauten total im Stich gelassen?

-/2

- 2 -

Ich hoffe, daß wir bald Gelegenheit haben, uns über diese und andere Fragen auszutauschen.

Meine Gedanken des Zinsausgleichsfonds habe ich inzwischen der deutschen Öffentlichkeit vorgestellt. Die Reaktion war bisher durchaus positiv. In der nächsten Pressekonferenz der Deutschen Bank, die am 3. Dezember in Düsseldorf stattfindet, werde ich sicher Gelegenheit haben, mit den Journalisten darüber noch einmal ausführlich zu diskutieren. Vielleicht zieht dieser ins Wasser geworfene Stein nun doch seine Kreise.

Ich hoffe, daß es Ihnen und Mrs. Kissinger gutgeht und sende Ihnen zugleich in Traudl's Namen herzliche Grüße. Schon jetzt freue ich mich auf unser Zusammentreffen Ende Januar. Sollten Sie in der Zwischenzeit nach Deutschland kommen, so machen Sie von unserer ständigen Einladung bitte Gebrauch.

Ich bin in Verbundenheit

Ihr

Dr. Henry A. Kissinger
Suite 520
1800 K Street, N.W.

Washington, D.C. 20006
U.S.A.

[LC]

THE SIEGE -- THE SAGA OF ISRAEL AND ZIONISM

By Conor Cruise O'Brien

New York: Simon and Schuster
$24.95

BY ARTHUR HERTZBERG

Arthur Hertzberg is Professor of Religion
at Dartmouth College and the author of *The
Zionist Idea*.

Conor Cruise O'Brien has written a remarkably perceptive and well-informed history of Israel, from its immediate origins in the modern Zionist movement to this day, of seemingly endless haggling about the proper condition for peace talks between Arabs and Jews. O'Brien's writing is fluent and often gripping. It is almost astonishing that in over 700 pages he has made few, and mostly trivial, errors of fact. His judgments are, almost invariably, fair and sound, and they are expressed with intelligence and good humor. There are exceptions. One example is O'Brien's insistence that Henry Kissinger encouraged Sadat to go to war against Israel in 1973. In arguing this case, O'Brien takes on the tone and manner of a prosecuting attorney. On the whole, however, the book is notable for its usual urbanity and civility. And yet, Conor Cruise O'Brien has written a frightening book, one that is even far more frightening than he intended it to be.

The author's central thesis is summarized in the title, *The Siege*. In O'Brien's version, Israel is a country which has lived, from the beginning of the Zionist colonization in Palestine, the embryo of the state of Israel, under conditions of unyielding Arab

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enemy. The "siege" will continue, for there is no possible end
to the quarrel between Arabs and Jews. Even if Israel were to agree
to reduce its borders to the barest minimum, its very existence is
an unacceptable affront to Arab sensibility. Therefore, so O'Brien
asserts, Israel has no choice but to behave like a country trapped
in perpetual war. There may be truces and _de facto_ arrangements
with individual Arab states, but the Arab world as a whole will never
offer peace. To suggest that Israel ought to offer concessions to
the Arabs from its acknowledged position of superior military strength
is to misconceive the true situation in the Middle East. In the
long run, it is Israel which lives in fear: it is, therefore, en-
titled to secure itself against the enemy of those who are sworn
never to lift "the siege."

This image of a forever-embattled country, of war without
end, results in an admiring portrait of Zionist heroism, of the few
ideologues who created a decent, western society in a hostile region.
This story, which makes up roughly four-fifths of a large book, is
the best popular account of "the saga of Israel and Zionism" (the
sub-title of O'Brien's book) that has yet been written. My problem
is with the political thesis of his title, "the siege." O'Brien
uses this image of permanent siege to be far too indulgent of Israeli
actions which even the bulk of Israeli opinion has condemned. A
prime example is his attitude towards the war in Lebanon. By now,
Israelis, an average of three-to-one in the polls, regard that war
as a mistake. This negative opinion includes roughly half of those

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who vote for Likud, and other right wing parties, which were the
prime supporters of the war in Lebanon when it was launched in June
of 1982.

Israeli opinion has come around to the view that even
the one supposed benefit of that war, the elimination of the PLO
from the northern border of Israel, was not worth the cost. Despite
its defeat, the PLO remains a diplomatic factor. In place of quiescent
Palestinians, who observed a truce on the northern border for a year
before the Israeli invasion in June of 1982, there is now increased
terrorism both in the Middle East and Europe; the Arab population
both in South Lebanon and on the West Bank is ever more hostile.
Conor Cruise O'Brien nonetheless doggedly insists that "the decision
to get rid of the PLO in Lebanon . . . was rational and motivated
by what was perceived as the necessities of survival." In his account
of the war, he plays down the opposition at the time, of military
intelligence, and he exaggerates the grudging, momentary support of
the Labor Party for the action.

I suppose that if your image of Israel is that of a
besieged castle, then to pour hot oil down from the ramparts, and
to venture outside the gates to inflict at least temporary disarray
on the enemy, makes sense. General Ariel Sharon need not be thought
of as Sir Lancelot. He can be the dread Sir Modred, and yet render
valiant service in beating back the infidels.

But can a siege go on forever? O'Brien seems to think
so, because he is an Irishman. He makes a point of telling us in

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several places of the book that his sympathy for Zionism and Israel
is deeply related to his own Irish nationalism. O'Brien admits that,
even as he deplores and loathes the Irish Republican Army, he remem-
bers with these bravos, the hurts which were inflicted on Irish
Catholics by the invading British Protestants three hundred years
ago. Such analogies make it possible for O'Brien to cast the Jewish-
Arab conflict in the Middle East as a parallel to the Catholic-Protest-
tant tensions in Ireland -- and to imagine that one can live with
this problem for centuries.

I think he is wrong, not only about the Middle East
but also about Ireland. There are very wild people abroad in the
world. They will soon be armed with weapons far more lethal than
hand grenades, package bombs or machine guns. The day of the
nuclear device available to terrorists in suitcase size is, by all
accounts, less than a decade away. None of the sieges can therefore
be imagined as continuing indefinitely. Fuses of local conflicts
are all burning towards detonating large conflagrations.

It is not an accident that Shimon Peres, the moderate
present Prime Minister of Israel, is pushing beyond what his friends
in the Reagan White House would want, by trying to bring the Soviet
Union into some diplomatic role in the Middle East. Peres evidently
does not believe that the present state of siege can continue in-
definitely. He even seems to know that the Russians, too, are
worrying about the threat of nuclear bombs in the hands of madmen. For
that matter, does Conor Cruise O'Brien, who knows the IRA well

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(it once threatened his life, when he was a Cabinet Minister in Ireland), believe that everyone among its splinter groups could resist the temptation of using a satchel full of nuclear material, if it received such a gift from someone like Colonel Qaddafi?

When I first read the historical and descriptive bulk of O'Brien's book, I admired his capacity to teach himself all the ramifications of a cause to which he had not been born, and I continue to admire this book as history. His concluding pages seem to me to project a peculiar kind of Irish "optimism" on the Middle East, that is, the belief that a muderous crisis can drag on. The Middle East is an angrier place than Ireland, and it is more likely to explode. Indeed, as I look at O'Brien's Ireland, from inside my Jewish skin, I am not so sure that Belfast can smolder indefinitely. There is not very much time left for the sane people in the world to insist on the lifting of all the sieges.

JOHN D. HESS

R. D. 1, BOX 112, NEW HOPE, PA. 18938

Dec. 28, 1985

Dear Carl and Desa,

We've been advised by a rather elegant card that you've again favored us with a subscription to Foreign Affairs Quarterly, for which we do indeed thank you. That's a very considerate and generous thing for you to do, to say nothing of flattering.

I've slept with a copy under my pillow in the past in the expectation that its contents, by a process of osmosis, would seep into my brain. There must be something inhibiting about the material inside my pillow, though, because it didn't really work very well.

Some of it really is enticing and when I overcome my fear of the rather forbidding cover on the publication I do enjoy it. But neither Jane nor I can be said to be a start-to-finish gobbler of it all. Regrettably, I'm too provincial to keep Mkwaba (formerly Upper Revolta) altogether separate in my mind from Tsin-Tsein (formerly Ruritania until Premier Mongol Horde took over from the communist puppet, President Status Quoh). I'm eagerly awaiting, however, George Kennan's promised article on revival of detente implicit in the benign neglect policy of Solebury Township in sewage-treatment conflict with the Borough of New Hope.

We really are flattered. And do thank you. Happy New Year and all that. Love,

KISSINGER ASSOCIATES

TWENTY-SIXTH FLOOR
350 PARK AVENUE
NEW YORK, NEW YORK 10022
(212) 759-7919
TELEX: 4970885
TELECOPY: (212) 759-0042

<table><tr><td>KAI</td></tr><tr><td>DATE: 10-28-86</td></tr><tr><td>LOG NO.: 1533</td></tr><tr><td>FILE: A6A</td></tr><tr><td>ACTION: 1</td></tr><tr><td>DUE:</td></tr><tr><td>INFO COPY TO:</td></tr><tr><td>KISSINGER</td></tr><tr><td>SCOWCROFT</td></tr><tr><td>NY OFFICE</td></tr><tr><td>TOMES</td></tr><tr><td>STATER</td></tr><tr><td>GEITENER</td></tr><tr><td>VICK</td></tr><tr><td>WILLIAMS</td></tr><tr><td>NEUMANN</td></tr><tr><td>ROGERS</td></tr><tr><td>CHRON</td></tr><tr><td>EXCFILLES</td></tr></table>

October 14, 1986

Dear Carl:

Enclosed is a note my assistant wrote to me with which I tend to agree.

Mr. Carl B. Hess
Chairman
AEA Investors Inc.
640 Fifth Avenue, 17th floor
New York, New York 10019

HK: BIRMINGHAM STEEL TRIP TO SPAIN:

All was on track until late last week when
Todd, Pres. of Birmingham Steel asked if there
was a private plane which could pick him up in
London so he could catch the late Concorde from
NYC. There wasn't but Todd's office said they
would confirm back to me Todd's flight arrangements
in terms of taking an overnight flight (at
Prado's suggestion) to arrive Monday morning and
depart after the meetings on Tuesday.

I was told by Todd's people I would get his
flight plans by Friday morning but I heard nothing.
So I called yet again this morning to be told
that Steve Clegg of AEA is now handling and he
would be coming to our office today to discuss the
issue.

You should know that Prado has now telexed their
urgent request to know the situation.

The Aristrain people do not understand the
reason for the delay when the trip has now been
postponed three times by the Birmingham people.

I feel strongly that my original thought that
this should be called off was right. Something
tells me that Clegg is coming over here to call
off the trip entirely. However, Clegg's office
does not know *when* Clegg will be in touch with
me today.

Their behavior is outrageous.