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NOVEMBER 24, 1974

NOVEMBER 24, 1974

Office of the White House Press Secretary
(Vladivostok, USSR)

JOINT US-SOVIET COMMUNIQUE

In accordance with the previously announced agreement, a working meeting between the President of the United States of America Gerald R. Ford and the General Secretary of the Central Committee of the Communist Party of the Soviet Union L. I. Brezhnev took place in the area of Vladivostok on November 23 and 24, 1974. Taking part in the talks were the Secretary of State of the United States of America and Assistant to the President for National Security Affairs, Henry A. Kissinger and Member of the Politburo of the Central Committee of the CPSU, Minister of Foreign Affairs of the USSR, A. A. Gromyko.

They discussed a broad range of questions dealing with American-Soviet relations and the current international situation.

Also taking part in the talks were:

On the American side Walter J. Stoessel, Jr., Ambassador of the USA to the USSR; Helmut Sonnenfeldt, Counselor of the Department of State; Arthur A. Hartman, Assistant Secretary of State for European Affairs; Lieutenant General Brent Scowcroft, Deputy Assistant to the President for National Security Affairs; and William Hyland, official of the Department of State.

On the Soviet side A. F. Dobrynin, Ambassador of the USSR to the USA; A. M. Aleksandrov, Assistant to the General Secretary of the Central Committee of the CPSU; and G. M. Korniyenko, Member of the Collegium of the Ministry of Foreign Affairs of the USSR.

I

The United States of America and the Soviet Union reaffirmed their determination to develop further their relations in the direction defined by the fundamental joint decisions and basic treaties and agreements concluded between the two States in recent years.

They are convinced that the course of American-Soviet relations, directed towards strengthening world peace, deepening the relaxation of international tensions and expanding mutually beneficial cooperation of states with different social systems meets the vital interests of the peoples of both States and other peoples.

Both Sides consider that based on the agreements reached between them important results have been achieved in fundamentally reshaping American-Soviet relations on the basis of peaceful coexistence and equal security. These results are a solid foundation for progress in reshaping Soviet-American relations.

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Accordingly, they intend to continue, without a loss in momentum, to expand the scale and intensity of their cooperative efforts in all spheres as set forth in the agreements they have signed so that the process of improving relations between the US and the USSR will continue without interruption and will become irreversible.

Mutual determination was expressed to carry out strictly and fully the mutual obligations undertaken by the US and the USSR in accordance with the treaties and agreements concluded between them.

## II

Special consideration was given in the course of the talks to a pivotal aspect of Soviet-American relations: measures to eliminate the threat of war and to halt the arms race.

Both sides reaffirm that the Agreements reached between the US and the USSR on the prevention of nuclear war and the limitation of strategic arms are a good beginning in the process of creating guarantees against the outbreak of nuclear conflict and war in general. They expressed their deep belief in the necessity of promoting this process and expressed their hope that other states would contribute to it as well. For their part the US and the USSR will continue to exert vigorous efforts to achieve this historic task.

A joint statement on the question of limiting strategic offensive arms is being released separately.

Both sides stressed once again the importance and necessity of a serious effort aimed at preventing the dangers connected with the spread of nuclear weapons in the world. In this connection they stressed the importance of increasing the effectiveness of the Treaty on the Non-Proliferation of Nuclear Weapons.

It was noted that, in accordance with previous agreements, initial contacts were established between representatives of the US and of the USSR on questions related to underground nuclear explosions for peaceful purposes, to measures to overcome the dangers of the use of environmental modification techniques for military purposes, as well as measures dealing with the most dangerous lethal means of chemical warfare. It was agreed to continue an active search for mutually acceptable solutions of these questions.

## III

In the course of the meeting an exchange of views was held on a number of international issues: special attention was given to negotiations already in progress in which the two Sides are participants and which are designed to remove existing sources of tension and to bring about the strengthening of international security and world peace.

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Having reviewed the situation at the Conference on Security and Cooperation in Europe, both Sides concluded that there is a possibility for its early successful conclusion. They proceed from the assumption that the results achieved in the course of the Conference will permit its conclusion at the highest level and thus be commensurate with its importance in ensuring the peaceful future of Europe.

The USA and the USSR also attach high importance to the negotiations on mutual reduction of forces and armaments and associated measures in Central Europe. They agree to contribute actively to the search for mutually acceptable solutions on the basis of principle of undiminished security for any of the parties and the prevention of unilateral military advantages.

Having discussed the situation existing in the Eastern Mediterranean, both Sides state their firm support for the independence, sovereignty and territorial integrity of Cyprus and will make every effort in this direction. They consider that a just settlement of the Cyprus question must be based on the strict implementation of the resolutions adopted by the Security Council and the General Assembly of the United Nations regarding Cyprus.

In the course of the exchange of views on the Middle East both Sides expressed their concern with regard to the dangerous situation in that region. They reaffirmed their intention to make every effort to promote a solution of the key issues of a just and lasting peace in that area on the basis of the United Nations resolution 338, taking into account the legitimate interests of all the peoples of the area, including the Palestinian people, and respect for the right to independent existence of all states in the area.

The sides believe that the Geneva Conference should play an important part in the establishment of a just and lasting peace in the Middle East, and should resume its work as soon as possible.

## IV

The state of relations was reviewed in the field of commercial, economic, scientific and technical ties between the USA and the USSR. Both Sides confirmed the great importance which further progress in these fields would have for Soviet-American relations, and expressed their firm intention to continue the broadening and deepening of mutually advantageous cooperation.

The two Sides emphasized the special importance accorded by them to the development on a long term basis of commercial and economic cooperation, including mutually beneficial large-scale projects. They believe that such commercial and economic cooperation will serve the cause of increasing the stability of Soviet-American relations.

Both Sides noted with satisfaction the progress in the implementation of agreements and in the development of ties and cooperation between the US and the USSR in the fields of science, technology and culture. They are convinced that the continued expansion of such cooperation will benefit the peoples of both countries and will be an important contribution to the solution of world-wide scientific and technical problems.

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DEPARTMENT OF STATE

November 5, 1974

No. 477

As Prepared For Delivery

ADDRESS BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
BEFORE THE WORLD FOOD CONFERENCE
ROME, ITALY
NOVEMBER 5, 1974

Secretary Kissinger:

We meet to address man's most fundamental need. The threat of famine, the fact of hunger have haunted men and nations throughout history. Our presence here is recognition that this eternal problem has now taken on unprecedented scale and urgency and that it can only be dealt with by concerted worldwide action.

Our challenge goes far deeper than one area of human endeavor or one international conference. We are faced not just with the problem of food but with the accelerating momentum of our interdependence. The world is midway between the end of the Second World War and the beginning of the twenty-first century. We are stranded between old conceptions of political conduct and a wholly new environment, between the inadequacy of the nation-state and the emerging imperative of global community. In the past thirty years the world came to assume that a stable economic system and spreading prosperity would continue indefinitely. New nations launched themselves confidently on the path of economic and social development; technical innovation and industrial expansion promised steady improvement in the standard of living of all nations; surpluses of fuel, food and raw materials were considered a burden rather than a blessing. While poverty and misery still afflicted many parts of the globe, over the long run there was universal hope; the period was fairly characterized as a "revolution of rising expectations." That time has ended. Now there are fundamental questions about our capacity to meet even our most basic needs. In 1972, partly due to bad weather around the globe, world grain production declined for the first time in two decades. We were made ominously conscious of the thin edge between hope and hunger, and of the world's dependence on the surplus production of a few nations. In 1973 first a political embargo and then abruptly raised prices for oil curbed production in the world's factories and farms, and sharply accelerated a global inflation that was already at the margin of government's ability to control. In 1974, the international monetary and trading system continues under mounting stress, not yet able to absorb the accumulated weight of repeated shocks. Its institutions still struggling to respond. The same interdependence that brought common advance now threatens us with common decline.

We must act now and we must act together to regain control over our shared destiny. Catastrophe when it cannot be foreseen can be blamed on a failure of vision or on forces beyond our control. But the current trend is obvious and the remedy is within our power. If we do not

For further information contact:

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act bodily, disaster will result from a failure of will; moral
cupability will be inherent in our foreknowledge.

The political challenge is straightforward: will the nations of
the world cooperate to confront a crisis which is both self-evident
and global in nature? Or will each nation or region or bloc see its
special advantages as a weapon instead of as a contribution? Will we
pool our strengths and progress together, or test our strengths and
sink together?

President Ford has instructed me to declare on behalf of the
United States: We regard our good fortune and strength in the field
of food as a global trust. We recognize the responsibilities we bear
by virtue of our extraordinary productivity, our advanced technology,
and our tradition of assistance. That is why we proposed this conference.
That is why a Secretary of State is giving this address. The United
States will make a major effort to match its capacity to the magnitude
of the challenge. We are convinced that the collective response will
have an important influence on the nature of the world that our
children inherit.

As we move toward the next century the nations assembled here must
begin to fashion a global conception. For we are irreversibly linked
to each other -- by interdependent economies and human aspirations, by
instant communications and nuclear peril. The contemporary agenda of
energy, food and inflation exceeds the capacity of any single government,
or even of a few governments together, to resolve.

All nations -- east and west, north and south -- are linked to a
single economic system. Preoccupation with narrow advantage is fore-
doomed. It is bound to lead to sterile confrontations, undermining the
international cooperation upon which achievement of national objectives
depends. The poorest and weakest nations will suffer most. Discontent
and instabilities will be magnified in all countries. New dangers will
be posed to recent progress in reducing international tensions. But
this need not be our future. There is great opportunity as well as grave
danger in the present crisis. Recognition of our condition can
disenthrall us from outdated conceptions, from institutional inertia, from
sterile rivalries. If we comprehend our reality and act upon it, we can
usher in a period of unprecedented advance with consequences far
transcending the issues before this Conference. We will have built an
international system worthy of the capacities and aspiration of mankind.

## The Food Challenge

We must begin here with the challenge of food. No social system,
ideology or principle of justice can tolerate a world in which the
spiritual and physical potential of hundreds of millions is stunted
from elemental hunger or inadequate nutrition. National pride or regional
suspicions lose any moral and practical justification if they prevent us
from overcoming this scourge.

A generation ago many farmers were self-sufficient; today fuel,
fertilizer, capital and technology are essential for their economic
survival. A generation ago many nations were self-sufficient; today a
good many exporters provide the margin between life and death for many
millions.

Thus food has become a central element of the international economy. A world of energy shortages, rampant inflation, and a weakening trade and monetary system will be a world of food shortages as well. And food shortages in turn sabotage growth and accelerate inflation.

The food problem has two levels -- first, coping with food emergency.
and second, assuring long-term supplies and an adequate standard of

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nutrition for our growing populations.

During the 1950's and 60's global food production grew with great consistency. Per capita output expanded even in the food-deficit nations; the world's total output increased by more than half. But at the precise moment when growing populations and rising expectations made a continuation of this trend essential, a dramatic change occurred: during the past three years, world cereal production has fallen; reserves have dropped to the point where significant crop failure can spell a major disaster.

The longer-term picture is, if anything, starker still. Even today hundreds of millions of people do not eat enough for decent and productive lives. Since increases in production are not evenly distributed, the absolute number of malnourished people are, in fact, probably greater today than ever before except in times of famine. In many parts of the world thirty to fifty percent of the children die before the age of five, millions of them from malnutrition. Many survive only with permanent damage to their intellectual and physical capacities.

World population is projected to double by the end of the century. It is clear that we must meet the food need that this entails. But it is equally clear that population cannot continue indefinitely to double every generation. At some point we will inevitably exceed the earth's capacity to sustain human life. The near as well as the long-term challenges of food have three components:

- There is the problem of production in the face of population trends, maintaining even current inadequate levels of nutrition and food security will require that we produce twice as much food by the end of this century. Adequate nutrition would require 150 per cent more food, or a total annual output of three billions tons of grain.

- There is the problem of distribution. Secretary General Marei estimates that at the present rate of growth of 2½ per cent a year the gap between what the developing countries produce themselves and what they need will rise from 25 million to 85 million tons a year by 1985. For the foreseeable future, food will have to be transferred on a substantial scale from where it is in surplus to where it is in shortage.

- There is the problem of reserves. Protection against the vagaries of weather and disaster urgently requires a food reserve. Our estimate is that as much as 60 million tons over current carryover levels may be required.

In short, we are convinced that the world faces a challenge new in its severity, its pervasiveness, and its global dimension. Our minimum objective of the next quarter century must be to more than double world food production and to improve its quality. To meet this objective the United States proposes to this Conference a comprehensive program of urgent, cooperative world-wide action of five fronts:

- Increasing the production of food exporters;

- Accelerating the production in developing countries;

- Improving means of food distribution and financing;

- Enhancing food quality;

- Ensuring security against food emergencies.

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Let me deal with each of these in turn.

## Increased Production By Food Exporters

A handful of countries, through good fortune and technology, can produce more than they need and thus are able to export. Reliance on this production is certain to grow through the next decade and perhaps beyond. Unless we are to doom the world to chronic famine, the major exporting nations must rapidly expand their potential and seek to ensure the dependable long-term growth of their supplies.

They must begin by adjusting their agricultural policies to a new economic reality. For years these policies were based on the premise that production to full capacity created undesirable surpluses and depressed markets, depriving farmers of incentives to invest and produce. It is now abundantly clear that this is not the problem we face; there is no surplus so long as there is an unmet need. In that sense, no real surplus has ever existed. The problem has always been a collective failure to transfer apparent surpluses to areas of shortages. In current and foreseeable conditions this can surely be accomplished without dampening incentives for production in either area.

The United States has taken sweeping steps to expand its output to the maximum. It already has 167 million acres under grain production alone, an increase of twenty-three million acres from two years ago. In a address to the Congress last month, President Ford asked for a greater effort still; he called upon every American farmer to produce to full capacity. He directed the elimination of all restrictive practices which raise food prices; he assured farmers that he will use present authority and seek additional authority to allocate the fuel and fertilizer they require; and he urged the removal of remaining acreage limitations.

These efforts should be matched by all exporting countries. Maximum production will require a substantial increase in investment. The best land, the most accessible water, and the most obvious improvements are already in use. Last year the United States raised its investment in agriculture by $2.5 billion. The United States Government is launching a systematic survey of additional investment requirements and of ways to ensure that they are met.

A comparable effort by other nations is essential. The United States believes that cooperative action among exporting countries is required to stimulate rational planning and the necessary increases in output. We are prepared to join with other major exporters in a common commitment to raise production, to make the necessary investment, and to begin rebuilding reserves for food security. Immediately following the conclusion of this Conference, the United States proposes to convene a group of major exporters -- an export planning group -- to shape a concrete and coordinated program to achieve these goals.

## Accelerated Production of Developing Countries

The food exporting nations alone will simply not be able to meet the world's basic needs. Ironically but fortunately, it is the nations with the most rapidly growing food deficits which also possess the greatest

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capacity for increased production. They have the largest amounts of unused land and water. While they now have 35 percent more land in grain production than the developed nations, they produce 20 percent less on this land. In short, the largest growth in world food production can -- and must -- take place in the chronic deficit countries.

Yet the gap between supply and demand in these countries is growing, not narrowing. At the current growth rate, the grain supply deficit is estimated to more than triple and reach some 85 million tons by 1985. To cut this gap in half would require accelerating their growth rate from the historically high average of 2¼ percent per annum to 3½ percent -- an increase in the rate of growth of 40 percent.

Two key areas need major emphasis to achieve even this minimum goal: new research and new investment.

International and national research programs must be concentrated on the special needs of the chronic food deficit nations and they must be intensified. New technologies must be developed to increase yields and reduce costs, making use of the special features of their labor-intensive, capital-short economies.

On the international plane, we must strengthen and expand the research network linking the less developed countries with research institutions in the industrialized countries and with the existing eight international agricultural research centers. We propose that resources for these centers be more than doubled by 1980. For its part the United States will in the same period triple its own contribution for the international centers, for agricultural research efforts in the less developed countries, and for research by American universities on the agricultural problems of developing nations. The existing Consultative Group on International Agricultural Research can play an important coordinating role in this effort.

The United States is gratified by the progress of two initiatives which we proposed at the Sixth Special Session of the UN General Assembly last April: The International Fertilizer Development Center and the study on the impact of climate change of food supply. The Fertilizer Center opened its doors last month in the United States with funds provided by Canada and the United States: we invite wider participation and pledge its resources to the needs of the developing nations. And the important study on climate and food supply has been taken on by the United Nations World Meteorological Organization.

National as well as international research efforts must be brought to bear. The United States offers to share with developing nations the results of its advanced research. We already have underway a considerable range of promising projects: to increase the protein content of common cereals; to fortify staple foods with inexpensive nutrients; to improve plant fixation of atmospheric nitrogen to reduce the need for costly fertilizers; to develop new low cost, small-scale tools and machines for the world's millions of small farmers.

We also plan a number of new projects. Next year, our space, agriculture and weather agencies will test advanced satellite techniques for surveying and forecasting important food crops. We will begin in North America and then broaden the project to other parts of the world. To supplement the WTO study on climate, we have begun our own analysis of the relationship between climatic patterns and crop yields over a statistically significant period. This is a promising and potentially vital contribution to rational

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planning of global production.

The United States will also make available the results of these projects for other nations.

Finally, President Ford is requesting the National Academy of Sciences, in cooperation with the Department of Agriculture and other governmental agencies, to design a far-reaching food and nutrition research program to mobilize America's talent. It is the President's aim to dedicate America's resources and America's scientific talent to finding new solutions, commensurate both with the magnitude of the human need and the wealth of our scientific capacities.

While we can hope for technological breakthroughs, we cannot count on them. There is no substitute for additional investment in chronic food-deficit countries. New irrigation systems, storage and distribution systems, production facilities for fertilizer, pesticide and seed and agricultural credit institutions are all urgently needed. Much of this can be stimulated and financed locally. But substantial outside resources will be needed for some time to come.

The United States believes that investment should be concentrated in strategic areas, applying existing, and in some cases very simple, technologies to critical variables in the process of food production. Among these are fertilizer, better storage facilities and pesticides.

Modern fertilizer is probably the most critical single input for increasing crop yields; it is also the most dependent on new investment. In our view fertilizer production is an ideal area for collaboration between wealthier and poorer nations, especially combining the technology of the developed countries, the capital and raw materials of the oil producers and the growing needs of the least developed countries. Existing production capacity is inadequate worldwide; new fertilizer industries should be created especially in the developing countries to meet local and regional needs for the long term. This could be done most efficiently on the basis of regional cooperation.

The United States will strongly support such regional efforts. In our investment and assistance programs we will give priority to the building of fertilizer industries and will share our advanced technology.

Another major priority must be to reduce losses from inadequate storage, transport, and pest control. Tragically, as much as 15 percent of a country's food production is often lost after harvesting because of pests that attack grains in substandard storage facilities. Better methods of safe storage must be taught and spread as widely as possible. Existing pesticides must be made more generally available. Many of these techniques are simple and inexpensive; investment in these areas could have a rapid and substantial impact on the world's food supply.

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To plan a coherent investment strategy, the United States proposes the immediate formation of a coordinating group for food production and investment. We recommend that the World Bank join with the Food and Agricultural Organization and the UN Development Program to convene such a group this year. It should bring together representatives from both traditional donors and new financial powers, from multilateral agencies and from developing countries, with the following mandate:

-- To encourage bilateral and international assistance programs to provide the required external resources.

-- To help governments stimulate greater internal resources for agriculture.

-- To promote the most effective uses of new investment by the chronic deficit countries.

The United States has long been a major contributor to agricultural development. We intend to expand this contribution. We have reordered our development assistance priorities to place the central emphasis on food and nutrition programs. We have requested an increase of almost $350 million for them in our current budget. This new emphasis will continue for as long as the need exists.

For all these international measures to be effective, governments must reexamine their overall agricultural policies and practices. Outside countries can assist with technology and the transfer of resources; the setting of priorities properly remains the province of national authorities. In far too many countries, farmers have no incentive to make the investment required for increased production because prices are set at unremunerative levels, because credit is unavailable, or because transportation and distribution facilities are inadequate. Just as the exporting countries must adjust their own policies to new realities, so must developing countries give a higher priority for food production in their development budgets and in their tax, credit and investment policies.

## Improving Food Distribution and Financing

While we must urgently produce more food, the problem of its distribution will remain crucial. Even with maximum foreseeable agricultural growth in the developing countries, their food import requirement is likely to amount to some 40 million tons a year in the mid-1980's, or nearly twice the current level.

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How is the cost of these imports to be met?

The earnings of the developing countries themselves, of course, remain the principal source. The industrialized nations can make a significant contribution simply by improving access to their markets. With the imminent passage of the trade bill, the United States reaffirms its commitment to institute a system of generalized tariff preferences for the developing nations and to pay special attention to their needs in the coming multilateral trade negotiations.

Nevertheless, an expanded flow of food aid will clearly be necessary. During this fiscal year, the United States will increase its food aid contribution, despite the adverse weather conditions which have affected our crops. The American people have a deep and enduring commitment to help feed the starving and the hungry. We will do every thing humanly possible to assure that our future contribution will be responsive to the growing needs.

The responsibility for financing food imports cannot, however, rest with the food exporters alone. Over the next few years in particular, the financing needs of the food-deficit developing countries will simply be too large for either their own limited resources or the traditional food aid donors.

The oil exporters have a special responsibility in this regard. Many of them have income far in excess of that needed to balance their international payments or to finance their economic development. The continuing massive transfer of wealth and the resulting impetus to worldwide inflation have shattered the ability of the developing countries to purchase food, fertilizer and other goods. And the economic crisis has severely reduced the imports of the industrialized countries from the developing nations.

The United States recommends that the traditional donors and the new financial powers participating in the coordinating group for food production and investment make a major effort to provide the food and funds required. They could form a subcommittee on food financing which, as a first task, would negotiate a minimum global quantity of food for whose transfer to food-deficit developing countries over the next three years they are prepared to find the necessary finances.

I have outlined various measures to expand production, to improve the earning capacity of developing countries, to generate new sources of external assistance. But it is not clear that even these measures will be sufficient to meet the longer-term challenge, particularly if our current estimates of the gap by 1985 and beyond prove to be too conservative.

Therefore, ways must be found to move more of the surplus oil revenue into long-term lending or grants to the poorer countries. The United States proposes that the development committee, created at the recent session of the Governors of the International Bank and Monetary Fund,

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be charged with the urgent study of whether existing sources of financing are sufficient to meet the expected import requirements of developing countries. If these sources are not sufficient, new means must be found to supplement them. This must become one of the priority objectives of the countries and institutions that have the major influence in the international monetary system.

## Enhancing Food Quality

Supplies alone do not guarantee man's nutritional requirements. Even in developed countries, with ample supplies, serious health problems are caused by the wrong kinds and amounts of food. In developing countries, the problem is magnified. Not only inadequate distribution but also the rising cost of food domms the poorest and most vulnerable groups -- children and mothers -- to inferior quality as well as insufficient quantity of food. Even with massive gains in food production, the world could still be haunted by the spectre of inadequate nutrition.

First, we must understand the problem better. We know a good deal about the state of global production. But our knowledge of the state of global nutrition is abysmal. Therefore the United States proposes that a global nutrition surveillance system be established by the World Health Organization, the Food and Agricultural Organization and the United Nations International Children's Emergency Fund. Particular attention should be devoted to the special needs of mothers and young children and to responding quickly to local emergencies affecting these particularly vulnerable groups. Nutrition surveying is a field with which the United States has considerable experience; we are ready to share our knowledge and techniques.

Second, we need new methods for combatting malnutrition. The United States invites the WHO, FAO and UNICEF to arrange for an internationally coordinated program in applied nutritional research. Such a program should set priorities, identify the best centers for research, and generate the necessary funding. The United States is willing to contribute $5 million to initiate such a program.

Third, we need to act on problems which are already clear. The United States proposes an immediate campaign against two of the most prevalent and blighting effects of malnutrition: Vitamin A blindness and iron deficiency anemia. The former is responsible for well over half of the millions of cases of blindness in less developed countries; the current food shortages will predictably increase this number. Iron deficiency anemia is responsible for low productivity in many parts of the world.

Just as the world has come close to eradicating smallpox, yellow fever and polio, it can conquer these diseases. There are available new and relatively inexpensive techniques which could have a substantial impact. The United States is ready to cooperate with developing countries and international donors to carry out the necessary programs. We are prepared to contribute $10 million to an international effort.

Finally, we need to reflect our concern for food quality in existing programs. This Conference should devote special attention to food aid programs, explicitly designed to fight malnutrition among the most vulnerable groups. The United States will increase funding for such programs by at least $50 million this year.

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## Ensuring Against Food Emergencies

The events of the past few years have brought home the grave vulnerability of mankind to food emergencies caused by crop failures, floods, wars and other disasters. The world has come to depend on a few exporting countries, and particularly the United States, to maintain the necessary reserves. But reserves no longer exist, despite the fact that the United States has removed virtually all of its restrictions on production and our farmers have made an all-out effort to maximize output. A worldwide reserve of as much as 60 million tons of food above present carryover levels may be needed to assure adequate food security.

It is neither prudent nor practical for one or even a few countries to be the world's sole holder of reserves. Nations with a history of radical fluctuations in import requirements have an obligation, both to their own people and to the world community, to participate in a system which shares that responsibility more widely. And exporting countries can no longer afford to be caught by surprise. They must have advance information to plan production and exports.

We commend FAO Director General Boerma for his initiative in the area of reserves. The United States shares his view that a cooperative multilateral system is essential for greatened equity and efficiency. We therefore propose that this Conference organize a Reserves Coordinating Group to negotiate a detailed agreement on an international system of nationally-held grain reserves at the earliest possible time. It should include all the major exporters as well as those whose import needs are likely to be greatest. This group's work should be carried out in close cooperation with other international efforts to improve the world trading system.

An International Reserve System should include the following elements:

- Exchange of information on levels of reserve and working stocks, on crop prospects and on intentions regarding imports or exports;

- Agreement on the size of global reserves required to protect against famine and price fluctuations;

- Sharing of the responsibility for holding reserves;

- Guidelines on the management of national reserves, defining the conditions for adding to reserves and for releasing from them;

- Preference for cooperating countries in the distribution of reserves;

- Procedures for adjustment of targets and settlement of disputes and measures for dealing with non-compliance.

## Agenda For The Future

The challenge before this conference is to translate needs into programs and programs into results. We have no time to lose.

I have set forth a five point platform for joint action:

- To concert the efforts of the major surplus countries to help meet the global demand;

- To expand the capacity of chronic food deficit developing nations for growth and greater self-sufficiency;

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-- To transfer resources and food to meet the gaps which remain;

-- To improve the quality of food to ensure adequate nutrition;

-- To safeguard men and nations from sudden emergencies and the vagaries of weather.

I have outlined the contribution that the United States is prepared to make in national or multilateral programs to achieve each of these goals. And I have proposed three new international groups to strengthen national efforts, coordinate them and give them global focus;

-- The Exporters Planning Group;

-- The Food Production and Investment Coordinating Group;

-- The Reserves Coordinating Group.

A number of suggestions have been made for a central body to fuse our efforts and provide leadership. The United States is openminded about such an institution. We strongly believe, however, that whatever the mechanisms, a unified, concerted and comprehensive approach is an absolute requirement. The American delegation headed by our distinguished Secretary of Agriculture Earl Butz is prepared to begin urgent discussions to implement our proposals. We welcome the suggestions of other nations gathered here. We will work hard and we will work cooperatively.

## Conclusion

Nothing more overwhelms the human spirit, or mocks our values and our dreams, than the desperate struggle for sustenance. No tragedy is more wounding than the look of despair in the eyes of a starving child.

Once famine was considered part of the normal cycle of man's existence, a local or at worst a national tragedy. Now our consciousness is global. Our achievements, our expectations, and our moral convictions have made this issue into a universal political concern.

The profound promise of our era is that for the first time we may have the technical capacity to free mankind from the scourge of hunger. Therefore, today we must proclaim a bold objective -- that within a decade no child will go to bed hungry, that no family will fear for its next day's bread, and that no human being's future and capacities will be stunted by malnutrition.

Our responsibility is clear.

Let the nations gathered here resolve to confront the challenge, not each other.

Let us agree that the scale and severity of the task require a collaborative effort unprecedented in history.

And let us make global cooperation in food a model for our response to other challenges of an interdependent world -- energy, inflation, population, protection of the environment.

William Faulkner expressed the confidence that "man will not merely endure, he will prevail." We live today in a world so complex that even only to endure, man must prevail. Global community is no longer a

Public Statements

DEPARTMENT OF STATE

November 2, 1974

No. 463

JOINT COMMUNIQUE
ISSUED AT THE CONCLUSION OF
THE VISIT OF SECRETARY OF STATE KISSINGER
TO TEHRAN, IRAN

NOVEMBER 2, 1974

At the invitation of the Government of Iran the Secretary of State of the United States, Dr. Henry A. Kissinger, visited Iran November 1-3, 1974. The visit was another expression of long-standing close and friendly relations between the two countries and their interest in further strengthening the ties between them.

During the visit Dr. Kissinger was received by His Imperial Majesty, Mohammad Reza Shah Pahlavi, Shahanshan of Iran. Secretary Kissinger conveyed to His Majesty the warm personal greetings of President Ford, together with the President's expressions of appreciation for His Majesty's leadership and statesmanlike role in world affairs. His Majesty and the Secretary of State reviewed the international situation and discussed matters of bilateral interest in the spirit of mutual respect and understanding that has long characterized U.S.-Iranian relations. Dr. Kissinger also met with Minister of Foreign Affairs Dr. Abbas Ali Khalatbary and Minister of Economic Affairs and Finance Hushang Ansary.

In their review of the international situation the two sides expressed satisfaction with the progress toward global detente and agreed on the need for further efforts to reduce tensions. The two sides also noted their close similarity of views on regional security issues. The U.S. side expressed its continuing support for Iran's programs to stengthen itself and to work cooperatively with its neighbors in the Persian Gulf and wider Indian Ocean regions. It also stated appreciation for Iranian efforts to promote peaceful solutions to disputes among its neighbors. The Iranian side explained its concept of increasing economic cooperation among the countries on the Indian Ocean littoral. Both sides reaffirmed their continued support of CENTO and the contribution which it makes to regional security and economic development.

Secretary Kissinger described the efforts the U.S. is making in search of a lasting peaceful resolution of the Arab-Israeli conflict. The Secretary reaffirmed the determination of the United States to Press its efforts to help maintain the momentum of the negotiations begun earlier this year. The Iranian side reaffirmed its support for the peacemaking efforts of the United States.

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The two sides engaged in a full, constructive and friendly discussion of the global petroleum price and supply question in the context of a review of the overall world economic situation. The two sides also reviewed other aspects of the world economic situation and agreed on the need for cooperative efforts to check inflation and avert the common misfortune of a major economic crisis. The Iranian side explained its programs of bilateral financial assistance to other countries and its proposal for a new multilateral organization to aid developing countries. The American side welcomed Iran's far-sighted policies in this respect. The two sides agreed to cooperate in global and regional programs to eliminate the world food deficit. The two sides agreed to form a U.S.-Iran Joint Commission designed to increase and intensify the ties of cooperation that already exists between the two countries. It was decided that the U.S. Secretary of State and the Iranian Minister of Economic Affairs and Finance would serve as the co-chairmen of the Commission. The first meeting of the Joint Commission which was held November 2, laid out a broad program of cooperation in the political, economic, cultural, defense, scientific, and technological fields. Joint working groups will be formed to carry out the work of the Commission and to enlist the energies and skills of governmental and private institutions in fulfilling the aims of the Commission. The next meeting of the Commission will be held in Washington next year.

A major element in the work of the Joint Commission will be a program in the field of nuclear energy, especially power generation, for which an agreement for cooperation is now under discussion. Meanwhile, contracts have been signed under which the United States is to provide enriched fuel for two power reactors. Contracts for fuel for six additional reactors will be signed in the near future. Iran will be discussing construction of the reactors with American firms. The Iranian side has also expressed interest in participating in a proposed commercial uranium enrichment facility to be built in the United States. The two sides were in full agreement on the need for better national and international controls over nuclear materials to prevent them from falling into irresponsible hands. They further agreed that every effort should be made to discourage further national development of nuclear weapons capabilities building on the principles of the non-proliferation treaty to which both are parties.

Among other fields in which cooperation is already underway and will be further expanded are joint ventures with Iran in the fields of agriculture, the development of petrochemical and electronics industries as well as animal husbandry, telecommunications, highway construction, geology, space technology, education and social services. Other fields of cooperation will be developed as the work of the Joint Commission progresses.

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November 2, 1974

No. 463

NOVEMBER 2, 1974

During the visit Dr. Kissinger was received by His Imperial Majesty, Mohammad Reza Shah Pahlavi, Shahanshah of Iran. Secretary Kissinger conveyed to His Majesty the warm personal greetings of President Ford, together with the President's expressions of appreciation for His Majesty's leadership and statesmanlike role in world affairs. His Majesty and the Secretary of State reviewed the international situation and discussed matters of bilateral interest in the spirit of mutual respect and understanding that has long characterized U.S.-Iranian relations. Dr. Kissinger also met with Minister of Foreign Affairs Dr. Abbas Ali Khalatbary and Minister of Economic Affairs and Finance Hushang Ansary.

In their review of the international situation the two sides expressed satisfaction with the progress toward global detente and agreed on the need for further efforts to reduce tensions. The two sides also noted their close similarity of views on regional security issues. The U.S. side expressed its continuing support for Iran's programs to strengthen itself and to work cooperatively with its neighbors in the Persian Gulf and wider Indian Ocean regions. It also stated appreciation for Iranian efforts to promote peaceful solutions to disputes among its neighbors. The Iranian side explained its concept of increasing economic cooperation among the countries on the Indian Ocean littoral. Both sides reaffirmed their continued support of CENTO and the contribution which it makes to regional security and economic development.

Secretary Kissinger described the efforts the U.S. is making in search of a lasting peaceful resolution of the Arab-Israeli conflict. The Secretary reaffirmed the determination of the United States to press its efforts to help maintain the momentum of the negotiations begun earlier this year. The Iranian side reaffirmed its support for the peacemaking efforts of the United States.

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April 5, 1974

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MR. WARREN: -- and I find myself in some difficulty responding to White House sources without names, or any sources without names. But just let me --

Q Is there any change in the plan, of the timing?

MR. WARREN: I don't want to play games with you. We have not announced a time, and I have nothing to give you on the time this morning. The President still plans to go.

Q The second question: The President has often said that no President should ever go to a summit conference and negotiate from a weak position, or weakened position. Would the President go to Moscow at a time when he is under imminent threat of impeachment, calling to your attention the general expectation that the House will have voted, or will be ready to vote on impeachment approximately in June?

MR. WARREN: Let me, if I may, separate the two elements in your question. One, the President's views on summit meetings are as you state them, and he still feels that way. Now, his views on the other matter you mention, the impeachment matter, also are well known.

I will just add to that that the President would not be in a position of negotiating from weakness, and that is a true statement.

Q Back to foreign policy for a minute, there were published reports last week that the United States and Saudi Arabia have reached agreement to set up four commissions -- political, military, economic, et cetera. Can you give us any more details on this, and could you also explain to us if we are breaking this principle by trying to make bilateral deals with the Arabs?

MR. WARREN: I am not conversant with the matter that you bring up in your question, Pete. I will have to take your question and look into it. I can just preliminarily say I think this should be a matter State should discuss, but let me check into it.

Q I wonder if we could go back to the question of taxes again, and I could make one more try at it.

Does the White House wish to make some sort of presentation, either written or verbal, before the Joint Committee on Internal Revenue Taxation with respect to the President's taxes?

MR. WARREN: Jim, I really must defer, and respond as I did earlier, and that is, we are working with the committee in what we feel to be a cooperative way to responsibly address some of the technical questions which remain. I am not in a position from here, this morning, to get into any detail of that.

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FOR IMMEDIATE RELEASE

AUGUST 5, 1974

THE WHITE HOUSE
STATEMENT BY THE PRESIDENT

I have today instructed my attorneys to make available to the House Judiciary Committee, and I am making public, the transcripts of three conversations with H. R. Haldeman on June 23, 1972. I have also turned over the tapes of these conversations to Judge Sirica, as part of the process of my compliance with the Supreme Court ruling.

On April 29, in announcing my decision to make public the original set of White House transcripts, I stated that "as far as what the President personally knew and did with regard to Watergate and the cover-up is concerned, these materials -- together with those already made available -- will tell it all."

Shortly after that, in May, I made a preliminary review of some of the 64 taped conversations subpoenaed by the Special Prosecutor.

Among the conversations I listened to at that time were two of those of June 23. Although I recognized that these presented potential problems, I did not inform my staff or my Counsel of it, or those arguing my case, nor did I amend my submission to the Judiciary Committee in order to include and reflect it. At the time, I did not realize the extent of the implications which these conversations might now appear to have. As a result, those arguing my case, as well as those passing judgment on the case, did so with information that was incomplete and in some respects erroneous. This was a serious act of omission for which I take full responsibility and which I deeply regret.

Since the Supreme Court's decision twelve days ago, I have ordered my Counsel to analyze the 64 tapes, and I have listened to a number of them myself. This process has made it clear that portions of the tapes of these June 23 conversations are at variance with certain of my previous statements. Therefore, I have ordered the transcripts made available immediately to the Judiciary Committee so that they can be reflected in the Committee's report, and included in the record to be considered by the House and Senate.

In a formal written statement on May 22 of last year, I said that shortly after the Watergate break-in I became concerned about the possibility that the FBI investigation might lead to the exposure either of unrelated covert activities of the CIA, or of sensitive national security matters that the so-called "plumbers" unit at the White House had been working on, because of the CIA and plumbers connections of some of those involved. I said that I therefore gave instructions that the FBI should be alerted to coordinate with the CIA, and to ensure that the investigation not expose these sensitive national security matters.

That statement was based on my recollection at the time -- some eleven months later -- plus documentary materials and relevant public testimony of those involved.

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or three involved.

That statement was put so my recollection at the time -- some eleven
months later -- in some documentary materials and released public testimony
brought to my attention.

The judicial committee so that they can be reflected as the Committee's
Therefore, I have ordered the transcriber made available immediately to
June 31, conversations are at variance with certain of my previous statements
myself. This process has made it clear that portions of the tables of these
Concett to sealate the 64 tables, such as reflected to a number of them
Since the Supreme Court's decision twelve days ago, I have ordered my
deadly regrett.

a separate act of omission for which I take full responsibility and which I
information that was incomplete and in some respective errors. This was
ignoring my case, as well as those pastel judgment on the case, did so with
which these conversations might now appear to have. As a result, those
and reflect it. At the time, I did not realize the extent of the implications
did I sent my submission to the judicial committee in order to include
that did not reflect my stall or my Counsel of it, or those stating my case, not
June 31. Although I recognised that these presented potential problems, I
among the conversations I listened to at that time were two of those of
resolved conversations supposed by the Special Prosecutor.

Briefly after that, in stay, I made a preliminary review of some of the 64
materials -- together with those already made available -- will tell it all.

The White House transcribers, I stated that "as far as what the President personally
On April 30, in announcing my decision to make public the original act of
process of my compliance with the Supreme Court ruling.

over the tables of these conversations to judge Sirs, as part of the
conversations with Mr. R. H. Haldeman on June 24, 1975. I saw also turned
judiciary Committee, and I am making public the transactions of three
I have today instructed my attorney to make available to the House

STATEMENT BY THE PRESIDENT

THE WHITE HOUSE

FOR IMMEDIATE RELEASE

AUGUST 2, 1975

The June 23 tapes clearly show, however, that at the time I gave those
instructions I also discussed the political aspects of the situation, and that
I was aware of the advantages this course of action would have with respect
to limiting possible public exposure of involvement by persons connected
with the re-election committee.

My review of the additional tapes has, so far, shown no other major in-
consistencies with what I have previously submitted. While I have no way
at this stage of being certain that there will not be others, I have no reason
to believe that there will be. In any case, the tapes in their entirety are
now in the process of being furnished to Judge Sirica. He has begun what may
be a rather lengthy process of reviewing the tapes, passing on specific claims
of executive privilege on portions of them, and forwarding to the Special
Prosecutor those tapes or those portions that are relevant to the Watergate
investigation.

It is highly unlikely that this review will be completed in time for the House
debate. It appears at this stage, however, that a House vote of impeachment
is, as a practical matter, virtually a foregone conclusion, and that the issue
will therefore go to trial in the Senate. In order to ensure that no other
significant relevant materials are withheld, I shall voluntarily furnish to the
Senate everything from these tapes that Judge Sirica rules should go to the
Special Prosecutor.

I recognize that this additional material I am now furnishing may further
damage my case, especially because attention will be drawn separately to
it rather than to the evidence in its entirety. In considering its implications,
therefore, I urge that two points be borne in mind.

The first of these points is to remember what actually happened as a result
of the instructions I gave on June 23. Acting Director Gray of the FBI did
coordinate with Director Helms and Deputy Director Walters of the CIA. The
CIA did undertake an extensive check to see whether any of its covert acti-
vities would be compromised by a full FBI investigation of Watergate. Deputy
Director Walters then reported back to Mr. Gray that they would not be
compromised. On July 6, when I called Mr. Gray, and when he expressed
concern about improper attempts to limit his investigation, as the record
shows, I told him to press ahead vigorously with his investigation -- which he
did.

The second point I would urge is that the evidence be looked at in its entirety, and the events be looked at in perspective. Whatever mistakes I made in the handling of Watergate, the basic truth remains that when all the facts were brought to my attention I insisted on a full investigation and prosecution of those guilty. I am firmly convinced that the record, in its entirety, does not justify the extreme step of impeachment and removal of a President. I trust that as the Constitutional process goes forward, this perspective will prevail.

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NEWS CONFERENCE

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AT THE WHITE HOUSE

WITH JERRY TERHORST

AT 3:26 P.M. EDT

AUGUST 9, 1974

FRIDAY

MR. TER HORST: I am sure you pretty much have the schedule up to date so far, starting with this morning's activities.

You may not have known that the President and Secretary of State Kissinger met this morning before President Ford said farewell to President Nixon. They met at 8:15 for roughly an hour.

Q Which President met with Kissinger, Jerry?

MR. TER HORST: That was Vice President Ford this morning, meeting with Secretary of State Henry Kissinger.

Q What did they talk about?

MR. TER HORST: They reviewed generally the foreign policy situation as it faces the country in this hour of transition.

Q Are you taking questions now, Jerry?

MR. TER HORST: I would just as soon wait, if I may, until I get through some of the preliminary announcements and then I will try to take your questions.

The President has asked a group of prominent citizens and Government officials to assist him in bringing about an orderly transition in the Government. He has precisely asked four individuals -- Donald Rumsfeld, Rogers C. B. Morton, John O. Marsh, Jr. and William W. Scranton -- to be members of this transition team, and he has sought and asked and is getting their advice on the best ways to build an effective White House organization.

The transition staff will provide liaison with members of Mr. Ford's Vice Presidential staff, the existing White House staff and the Cabinet and heads of agencies. We have biographical material on these four men.

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The President also asked me to announce the
appointment of Robert T. Hartmann, who was chief of the
Vice Presidential staff. He will become a Counsellor
to the President.

After the swearing-in ceremony in the East
Room and brief appearance here in the briefing room,
President Ford met with the senior White House staff
for about 20 minutes, a group brought together at
President Ford's request and brought together by General
Haig. The meeting took place in the Roosevelt Room.

At the meeting, the President told the members
of the senior White House staff that he would not request
their pro forma resignations and that he hoped that many
of them would stay on to assist in this transitional
period. General Haig, responding for the group, assured
him that they would be willing to do that, and told
President Ford that the same loyalty which they had given
to President Nixon would now be President Ford's as far
as the senior White House staff is concerned, as General
Haig put it, "in our hour of common cause."

Later this afternoon, as you probably know, the
President met with a group of economic advisers in the
Cabinet Room. Attending the meeting were Chairman Arthur
Burns of the Federal Reserve Board, the Secretary of
the Treasury, William Simon, Counsellor Kenneth Rush,
Herbert Stein, Chairman of the Council of Economic Advisers,
and his successor-designate, Alan Greenspan; Budget Director
Ash, and also sitting in on that meeting were Robert
Hartmann, William Seidman and Governor Scranton.

As you know, starting later this afternoon, the
President has commenced a series of meetings with Ambassadors
of various countries, and that will continue until early
this evening.

He also met with a group of NATO Ambassadors and
with a group of Latin American Ambassadors and the
Vietnamese Ambassador. We will post a complete schedule of
these meetings and the full list of the names of those
who were there.

I might say in connection with the Ambassadorial
meetings that the President, along with Secretary Kissinger,
underlined the continuity of bipartisan American foreign
policy as conducted in the national interest, and as
reflected in President Ford's comments last evening, that
he can say with no hesitation or reservation that the policy
that has achieved peace and built blocks for the future will
be continued.

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In his talks with the NATO Ambassadors, the President and Secretary of State also underlined the fact that NATO is the central element in our foreign policy and that the evolution begun with the NATO Declaration of Principles, which President Nixon signed in Brussels on his recent trip, will continue.

As for the President's schedule tomorrow, we have one item of interest to you.

The President will meet with the Cabinet at 10 o'clock tomorrow morning, and as later events come on the schedule, I will get them out to you.

Q Did any decisions come out of the economic meeting?

MR. TER HORST: In the economic meeting, the President underlined to the participants his determination and resolve to attempt a solution of our economic problems and the continuing problem of inflation as a high and first priority of business of the Ford Administration.

He sought the views of the various participants, and received them.

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Q Has he asked Greenspan to take the job as scheduled?

MR. TER HORST: Yes. Mr. Greenspan will succeed Herbert Stein as previously indicated.

Q Is Ambassador Rumsfeld leaving the post in Italy to join the transition?

MR. TER HORST: At this point, Ambassador Rumsfeld is coming aboard as a member of the transitional team and that, of course, by definition is a temporary assignment. It would not be possible for me to say at this moment precisely how long Ambassador Rumsfeld, or any of the others, will be required to continue in this transitional team.

Q Will he be replaced in Brussels?

MR. TER HORST: If Mr. Rumsfeld's assignment here continues for a length of time, I am certain that the NATO post will not go unattended.

Q Do you expect to be announcing more names this weekend?

MR. TER HORST: Of what?

Q Names of Administration people, new appointees, temporary and permanent?

MR. TER HORST: That is possible. I don't have any hard guidance to give to you except for President Ford's obvious and declared intention that he does want to get on with this transition process and complete his Administration as quickly as he can.

Q Jerry, what about the timing for naming a new Vice Presidential nominee?

MR. TER HORST: The President has uppermost on his mind his constitutional responsibility to pick a successor to himself as Vice President. As you know, the Constitution does not provide a stated deadline; no specific date is mentioned. However, he wants to do that as rapidly as he can and in his meeting today with the Congressional leaders following the swearing-in ceremony, President Ford assured the Congressional leaders that he was proceeding as promptly as he could and he hoped he would have the name of a nominee for Vice President to submit to the Congress possibly within a week or ten days.

Q Did he ask for suggestions, Jerry?

MR. TER HORST: The President has been combing a lot of his friends and getting a lot of advice on whom he should choose as the next Vice President and I don't think he is without any dearth of suggestions along that line.

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Q Would you rule out an announcement at the Joint Session Monday night?

MR. TER HORST: I can help you with that. At least tentatively, the Joint Session to which the President was invited by Speaker Albert and the President pro tempore of the Senate is set for 9 o'clock. We do not yet know how long the President will address the Congress.

My informal guidance to you would be to expect something in the nature of 15 or 20 minutes.

Q Were there any particular actions agreed upon or discussed at the economic meeting?

MR. TER HORST: No, there were no particular actions or decisions made at the economic meeting. Obviously, it was a very preliminary discussion, the first opportunity the President has had as President to meet with the Quadriad and the expanded list that I mentioned.

Q Is General Haig staying on as Chief of Staff?

MR. TER HORST: In the meeting with the White House senior staff, the President asked General Haig to stay on as part of his transitional team and General Haig said he would be happy to do so, and will indeed.

Q To follow that, you are saying just for the transitional team; that he won't be part of the permanent White House staff?

MR. TER HORST: I cannot, Marty, look that far into the future. I do know that the President is counting heavily on General Haig to, as he said in the senior staff meeting, help provide continuity and stability to the process of transferring from the Nixon Administration to the Ford Administration and General Haig has agreed to stay on as long as President Ford wants him to.

Q Jerry, does Leon Jaworski remain as Special Prosecutor?

MR. TER HORST: Yes, Leon Jaworski will remain as Special Prosecutor.

Q Did former President Nixon sign a pardon for himself prior to leaving office?

MR. TER HORST: Well, I am not here to speak for anyone but President Ford. I have no way of answering that question.

Q Let me ask you another one: Will the subpoenaed materials be handed over to the House Judiciary Committee and does President Ford have any views on a grant of immunity to former President Nixon?

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MR. TER HORST: The subpoenaed materials, as you know, were subpoenaed by the Special Prosecutor's Office and the court and by the House Judiciary Committee. It is my presumption that this question would have to be answered by the President's legal office and I am not prepared to give you a firm answer on that.

Q And on the question of immunity?

MR. TER HORST: Will you repeat that question again?

Q Yes. Does President Ford have any views on a grant of immunity to former President Nixon?

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MR. TER HORST: President Ford's position on the question of immunity for President Nixon, I believe, if my memory serves me correctly, was expressed by him in the hearings during his nomination on the Hill. I may be wrong in that, but it seems to me that question did come up.

In any event, President Ford has not expressed to me any views on that subject, so I am unable to directly help you.

Q What did he say on the Hill?

MR. TER HORST: It was my understanding on the Hill he was negative on that question.

Q What has happened to President Nixon's tapes? Did he take them with him or are they still in the White House?

MR. TER HORST: Those tapes are still in the White House.

Q Under whose control?

MR. TER HORST: Well, they are at the present time in the custody of the President's Office of Legal Counsel and Mr. St. Clair.

Q Is that President Ford's Office of Legal Counsel?

MR. TER HORST: Well, at this point, yes, it would be President Ford's Office of Legal Counsel because he has not changed those who have been there.

Q Is Special Counsel St. Clair going to stay on for the time being to wrap up that part of the affairs?

MR. TER HORST: I can't speak with authority for Mr. St. Clair, but it would be my assumption that he is at least staying on for the time being.

Q Do you plan to tape all the other meetings? Will tapes be used?

MR. TER HORST: No, tapes will not be used in the Ford Administration.

Q Was St. Clair at the meeting with the senior staff this morning?

MR. TER HORST: No, he was not.

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Q Could you tell us who was, unless it is incredibly long?

MR. TER HORST: Yes, I can give you an idea of who was at the senior staff meeting.

Q These would be, am I correct, the people he has asked to stay on?

MR. TER HORST: Yes. I don't have the list with me but present at the senior White House staff meeting at which President Ford spoke briefly were, of course, General Haig, Budget Director Ash, Brent Scowcroft, Bill Timmons; Secretary of State Kissinger was there in his role as the National Security Council Director; Ken Cole of the Domestic Council, Leonard Garment, and Fred Buzhardt.

Q Anne Armstrong?

MR. TER HORST: Anne Armstrong is ill. She was not there, but she would have been had she been well.

Q Dean Burch?

MR. TER HORST: Dean Burch was there, yes.

Q Is he going to stay on during the transition period?

MR. TER HORST: Yes, the President asked and was promised by all of these individuals that they would be happy to stay on.

Q Is he going to ask the Cabinet to stay entirely, or what?

MR. TER HORST: The President has asked the members of the Cabinet, as he is asking others in the Administration during this transition, to stay aboard, and it is my understanding that the members of the Cabinet have agreed to do that.

Q How long will the transition take? How long does he expect it to take?

MR. TER HORST: I am not sure that President Ford can say. I know he hopes it will be as short a period as possible.

Q Will Secretary Kissinger be wearing two hats as before?

MR. TER HORST: He will continue in both roles, yes.

Q Was Ken Clawson there this morning?

MR. TER HORST: Ken Clawson was there this morning, yes.

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Q Does the President plan to meet with the Joint Chiefs of Staff any time in the near future?

MR. TER HORST: I presume he does. I am not aware of anything scheduled at the moment, but I am certain he does.

Q When will the Fords be moving into the White House, Jerry?

MR. TER HORST: As you know, the Nixons left this morning and it takes a little time to pack everything and make it possible for the Ford family to move in. The Ford family will not be in the White House tonight. They will be home in their home in Alexandria. And it may not be possible for them to move in until after the weekend, either. But as soon as that decision is made and as soon as I can find out how quickly it can be done, I will let you know.

Q Jerry, I am not sure I understood the reason why you didn't answer the question about whether President Nixon had signed a pardon for himself before he left. Do you know whether or not he did and if not, can you find out for us? The White House should know what sort of Presidential pardons have been signed.

MR. TER HORST: I am not aware of President Nixon having signed any document of immunity or pardon or clemency for himself, or whatever you may care to characterize it. I will endeavor to find out.

Q Or for anyone else?

MR. TER HORST: Or for anyone else. I will endeavor to get an answer to the broad question for you. You have to understand that President Nixon is no longer here, and I am speaking for President Ford, so I can't really provide you with information about President Nixon.

Q Are there any other resignations that you know of?

MR. TER HORST: I am not aware of them.

Q What about Ziegler?

MR. TER HORST: Ziegler has left, yes.

Q Was Kenneth Rush at the senior staff meeting?

MR. TER HORST: Yes, Mr. Rush was there. In that list of senior White House staff, I am not trying to be exclusive and I hope I haven't missed any names I should have mentioned. I did not bring a full list, but it was a group that was brought together by General Haig.

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Q Is this transitional team involving itself immediately in the search for a Vice Presidential nominee or is that outside their --

MR. TER HORST: Bill, I frankly can't tell you what parameters the President is putting on the work of the transitional team. Hopefully, some of that will be clarified after they have this first meeting today.

Q What will the President's attitude be toward press conferences and when will he have the first one?

MR. TER HORST: Well, as you know, President Ford is a believer in press conferences and so am I. As soon as it is possible for President Ford to hold a news conference, he will hold one.

Q You are going to redesign this briefing room, right?

MR. TER HORST: President Ford suggested earlier today he might like to have it back as a swimming pool.

Q Was he serious?

MR. TER HORST: No, I think he was not serious. I think he would like to have been serious. (Laughter)

Q Jerry, the origins of his speech, when he began work on it and who helped him write it?

MR. TER HORST: This is the swearing-in speech? Is that what you are referring to?

Q Yes.

MR. TER HORST: Well, as you know, the President, when he was Vice President, had a couple of able speechwriters on his staff, Robert Hartmann and Milton Friedman, and he worked over that speech considerably last evening at home himself.

Q Jerry, did you help him at all with the speech?

MR. TER HORST: No, sir, I did not.

Q Jerry, will you have copies of the Joint Session speech out early? This has been a real problem for those who can't get to the White House to pick them up.

MR. TER HORST: Having been on the other side of the podium here for a long time, I know how important it is to get advances out. We will do our darnedest to get advances out when we can, but I obviously can't pass them out until I get them in my own hands. We will do our best.

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Q Has the President had a conversation with former Governor Rockefeller, either directly or through Dr. Kissinger?

MR. TER HORST: I am not aware of any direct contact between President Ford and Governor Rockefeller.

Q How about indirect.

MR. TER HORST: Or indirect.

Q Jerry, does the presence of Governor Scranton at the economic meeting mean that he is going to handle that phase of the transition?

MR. TER HORST: No, I think I would look at Governor Scranton's presence, along with all the others, as four individuals to whom President Ford is going to give considerable responsibility for making recommendations to him on organizing a strong, stable and ongoing White House operation.

Q Will they report directly to him?

MR. TER HORST: They will report directly to the President.

Q Will Mr. Rush be staying on as primary economic Counsellor?

MR. TER HORST: At the present time, all the members of the President's staff have been asked to stay on and have agreed to do that.

Q You told us Mr. Ziegler left. Is there anyone else? Did Steve Bull resign, Rose Mary Woods?

MR. TER HORST: I am unable to give you hard answers to that because they were members of President Nixon's staff. But it is my understanding that Miss Woods would go with President Nixon.

Q Will you brief tomorrow?

MR. TER HORST: Yes, we will probably brief tomorrow after the Cabinet meeting; maybe sometime along about noon or so.

Also, I have been advised that President Nixon did not sign a pardon or any form of immunity for himself or anyone before he left office.

Q To follow up on that part of it, can you check for us as to if President Ford's position is still as he stated on the Hill, that he is not in favor of immunity?

MORE

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Department of the

TREASURY

NEWS

THE DEPARTMENT OF THE TREASURY
1789

WASHINGTON, D.C. 20220

TELEPHONE W04-2041

STATEMENT BY THE HONORABLE WILLIAM E. SIMON
SECRETARY OF THE TREASURY

BEFORE
THE SUBCOMMITTEE ON THE NEAR EAST AND SOUTH ASIA
THE HOUSE FOREIGN AFFAIRS COMMITTEE
MONDAY AUGUST 12, 1974 AT 2:00 P.M. EDT

MR. CHAIRMAN AND MEMBERS OF THE SUBCOMMITTEE:

I am delighted to have the opportunity to be here today to discuss my recent trip to the Middle East and Europe. As a related part of the discussion, I think it is important because of your interests to also cover the effect on the U.S. and world economies of increased capital flows to the oil exporting countries.

The purpose of my trip was to continue our recent diplomatic efforts to achieve a durable and lasting peace in the Mideast. I believe that peace and economic progress are interrelated issues. Without peace, we cannot have economic progress. With economic progress, however, we can minimize the possibility of renewed hostilities. Fortunately, the diplomatic efforts of the President and Secretary Kissinger in recent months have established a framework for peace and stability in the Middle East that hasn't existed for three decades and President Ford intends to pursue this policy in the months ahead. After my own meetings, I am optimistic that we can help the Middle East countries strengthen their economies and achieve needed industrialization and development, which in turn will contribute greatly to the cause of peace.

WS-82

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BACKGROUND

Before outlining the highlights of each of my visits, it would be useful to explain the background of how the trip developed. Prince Fahd of Saudi Arabia visited the United States in early June, and at that time we established a Joint Saudi - U.S. Economic Commission. This was a major step in establishing closer economic relations between the United States and Saudi Arabia--- and we agreed to have working groups meet in Saudi Arabia in July. Subsequently---when the President visited Egypt and Israel and suggested that I visit *those* countries---we thought it would be useful to go to all three Mideast countries and to open the working group sessions in Saudi Arabia. Kuwait was the final stop on the Middle East portion of our trip---and offered us an opportunity to bring the first high-level U.S. delegation to a country which has increasingly occupied a critical role *not* just in energy affairs, but world economic affairs as well. The balance of our trip was devoted to continuing our economic consultations with finance ministers and other leaders in Germany, Italy, France and England.

As I'll describe in detail, all of our meetings---whether they were with heads of state, finance ministers, petroleum ministers, central bankers, or members of the private sector---were based on mutual concerns: striving for political stability and economic stability...and our shared pursuit for peace and economic prosperity.

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[lc]

EGYPT

The visit to Egypt was in many respects one of the most intriguing aspects of our trip. While the visit was aimed at seeing how we could assist the Egyptians in strengthening their economy, I was especially aware of Egypt's unique historical role as a seat of political and cultural leadership in the entire Middle East.

We were there not only to offer assistance, but to learn as much as we possibly could about the dimensions of Egypt's economy, about their emerging economic aspirations, and---most important--- about the shape of President Sadat's program to progressively return Egypt's economy to an open, and more liberal, system.

I would especially like to stress the point that in our meetings with President Sadat, Deputy Prime Minister Hegazi, and Finance Minister Fatah, the Egyptian leaders repeatedly reaffirmed their gratitude for President Nixon and Secretary Kissinger's role in securing an initial framework for peace in the Middle East.

Our stay in Egypt was marked with intense, frank and cordial discussions which brought a number of tangible results:

- In addition to groups that have already been formed in scientific and technological cooperation, medical cooperation, and cultural exchange, we agreed to establish a senior working group---to focus on economic development and investment. A broad cross section of representatives from the Departments of

- 4 -

State, Agriculture, Commerce, Treasury, and other agencies will
participate and Assistant Secretary of the Treasury Gerald Parsky
will serve as co-chairman. The Egyptians agreed to name a co-
chairman shortly.

This work group will contain five subcommittees to cover:

(1) Investment

(2) Domestic development and industrialization

(3) Foreign trade

(4) Agriculture

(5) Suez Canal reconstruction and development

- 5 -

-- We exchanged documents activating the Investment Guarantee Agreement in order that the U.S. Overseas Private Investment Corporation (OPIC) may insure new U.S. private investments in Egypt. This step was made possible by the decision announced earlier to establish a Joint Commission to seek settlement of U.S. Private claims against the government of Egypt.

-- We discussed the possible utilization of resources transferred from the U.S. to Egypt through:

(1) the $250 million of economic assistance which has been proposed to the Congress for the current fiscal year and which I urge Congress to act upon favorably

(2) a possible program of PL-480 sales of U.S. agricultural products to Egypt on the basis of long-term loans on favorable terms;

(3) increased use of the facilities of the U.S. Export-Import Bank to assist other U.S. exports to Egypt on a long-term credit basis.

-- We also discussed ways in which we can work together in qualifying Egypt for the maximum in financial support from the World Bank, the International Monetary Fund, and other official agencies both national and international.

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-- Not only did we discuss the provision of financial assistance, but also of valuable technical assistance from the U.S. in many fields, including the fields of financial administration, including debt management; tax administration; statistics; agriculture; population control; building and electrical codes and standards; and many other areas.

-- Further, we agreed to explore the possibility of establishing a Project Development Institute which would assist in the development of viable projects by providing a mechanism for feasibility studies, thus serving as an inducement to increased investment in Egypt.

-- We also explored additional ways in which we can work together to attract private investment to Egypt not just from the U.S. but from all parts of the world, particularly investment made jointly with the benefit of U.S. technological contributions. In addition to activation of the Guaranty Program, mentioned above, we offered to assist:

(1) in publicizing the provisions of the new Egyptian Investment Law,

(2) in making widely known those areas in which Egyptian authorities believe there are promising opportunities for investment in Egypt, and

- 7 -

[lc]

(3) by negotiating a tax treaty to provide a
secure base for investor activity.

After this first visit, I have concluded that
there is great potential for investment in Egypt. They
want investment and are looking for ways to attract it.
For instance, while we were in Egypt, Dr. Hegazi announced
the acceptance of permits from four major U.S. banks to
establish offices in Egypt. This was a most significant
indicator of Egypt's commitment to attracting U.S.
investment and of moving to liberalize their economy.

As you know, Egyptian Foreign Minister Fahmi is leading
a high level delegation that is meeting here in Washington this
week. In addition, members of Minister Fahmi's delegation
will be meeting Assistant Secretary Parsky to discuss areas of
economic and financial cooperation.

In my own view, this is further evidence of our common com-
mitment to ensure that the spirit and momentum of our initial
meetings in Cairo last month is carried forth.

- 8 -

## ISRAEL

After my talks in Egypt, I visited Israel. During our one and a half days of intensive consultations with Prime Minister Rabin, and other key members of the Israeli Cabinet, we moved in a deliberate fashion to find ways to attract investment to Israel and to expand trade with the U.S. To assist in these efforts we took the following actions:

- established a Joint U.S.-Israel Committee on Trade and Investment co-chaired by Finance Minister Rabinowitz and me. We also agreed to establish four subcommittees dealing with a) investment, b) trade, c) raw materials, and d) research and development.

- invited Finance Minister Rabinowitz to visit the U.S. for the first meeting of the Joint Committee in early November and he accepted.

- agreed to explore ways to establish a Joint U.S.-Israel Economic Council consisting of private U.S. businessmen and Israeli private business and government representatives.

We indicated that we are prepared to assist Israel by providing a broad-range of technical assistance and expertise. We also agreed to explore the possibility

- 9 -

of a tax treaty and other incentives that may stimulate private investment in Israel

I believe my visit to Israel demonstrated that our new economic relationships in the other areas of the Middle East in no way signify a diminution of our sensitivities to Israel's needs and our desire to work cooperatively with them.

## SAUDI ARABIA

My visit to Saudi Arabia, which followed the talks in Israel, was part of our continuing efforts to establish a closer economic relationship with the Saudis. The trip followed the President's June meeting in that country, as well as Prince Fahd's June visit to Washington--when we established the Joint Saudi-U.S. Economic Commission and the Joint Working Groups to deal with the specific areas of industrialization, manpower and education, science and technology and agriculture.

At the outset, it is important to point out that Saudi Arabia's growing accumulation of monetary reserves---which today exceed their ability to absorb them domestically---has confronted them with a two-part challenge:

- 10 -

First, how can they spend their resources at home
in such a way as to diversify their economy and industrialize
their country, so that their reliance on oil will be diminished
Make no mistake about it, the Saudis are looking beyond the
day of oil primacy.

Second, how can they invest their funds abroad in a
fashion that will maximize profit without creating unwieldy
and unwanted pressures on the world monetary system.

During the visit, we held intense and broad-ranging
discussions not only on the economic goals of Saudi
Arabia but also on their investment objectives as well.
We outlined a proposal for investment in U.S. Treasury
Special Issues, and began an initial discussion of the
advantages both countries would share in negotiating a
tax treaty.

Further, we discussed the impact of world oil prices
on the developed and less developed countries. They
recognize the effects of high oil prices and have clearly
been working toward achieving more reasonable prices. In
this regard I believe it's important to note that during
our visit, Oil Minister Yamani announced the Saudis'
intention to hold an oil auction in August. The amount of
oil to be auctioned is, at this point, uncertain, but we
received assurances that the bid price will be accepted.

- 11 -

Finally, I opened the initial meeting of the Joint Working Group on Industrialization. This group and the group focusing on Manpower and Education met for a week after I left. These groups had representation from our Departments of State, Commerce, Labor, HEW, and AID, and Assistant Secretary of the Treasury Gerald Parsky remained behind to coordinate both groups. I believe these groups accomplished a great deal during these first meetings. Let me briefly outline what was agreed to:

1) We will enter into a comprehensive U.S. Government-Saudi Technical Cooperation Agreement for reimbursement of technical services to our government;

2) The U.S. Government will assign a number of U.S. Government experts to work full time in Saudi Arabia as part of the Joint Commission effort;

3) During August, the U.S. Government will send experts to Saudi Arabia for a temporary period

i) to improve the Saudi statistical and industrial information base,

ii) to advise on customs,

iii) to improve on port management, and

iv) to advise on environmental and pollution standards.

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4) During September, the U.S. Government will send additional experts for a temporary period

i) to improve standards for industrial construction,

ii) to advise on the development of marine fisheries,

iii) to advise on establishment of international standards for protection of patents and copyrights, and

iv) to advise on the improvement of communication facilities.

5) The U.S. Corps of Engineers will be requested to expand its role beyond that now performed for the Saudi Ministry of Defense to assist on important infrastructure projects needed for industrialization in Saudi Arabia.

6) Two Saudi representatives will visit TVA during the next two months to recommend the types of TVA assistance needed in the Saudi program to increase fertilizer production.

7) Finally, the Joint Working Group on Industrialization will meet again in late September in Washington.

- 13 -

In addition, the working group on Manpower and
Education agreed that:

1) In August, the U.S. will send three technical experts to Saudi Arabia to evaluate current vocational training, including on-the-job training, and to develop a proposal for the establishment of technical assistance for additional training programs;

2) In September, the U.S. will send five experts to evaluate the overall Saudi educational system and recommend full assistance projects to implement improvements in the system;

3) During September, Saudi experts will be sent to the U.S. to study government employee training and the petrochemical industry; and

4) Finally, during August and September 1974, the U.S. group agreed to mobilize U.S. resources in the following priority areas:

i) Access for Saudi students to U.S. educational facilities, particularly in law and medicine, including medical internships,

ii) Institutional and program development for Saudi universities and colleges, particularly in business administration, industrial management, extension services (conducting special seminars), and technical services,

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iii) Professional recruitment and exchange, including seconding arrangements for American professors to teach in Saudi Arabia, and visiting professors,

iv) Establishment of junior colleges, preferably utilizing existing university facilities, and

v) Development of technical-level training program in the petrochemical field.

We plan to hold the initial meetings of the third and fourth working groups, on Agriculture and Science and Technology, in Saudi Arabia in September. We are hopeful that they will be as successful.

- 15 -

## KUWAIT

Following our stop in Saudi Arabia, we made a brief visit to Kuwait. Our meetings there were especially significant from a number of viewpoints.

First, they marked the first visit of a high-level delegation to this critical oil-producing country which, in the last decade, has come to occupy a position of growing importance in the world community.

Second, I had extensive and quite frank discussions with Kuwait's Minister of Oil and Finance Abdul Rahman Atiqi regarding the price of oil. There are still considerable differences of opinion on this subject but it was a most constructive dialogue and opened the way for future discussions.

Third, we had an opportunity to discuss the Kuwaitis' investment objectives, as well as their willingness to assist not only developing Arab countries, but countries throughout the world through such vehicles as the Kuwait Fund.

The Kuwaitis were most interested in receiving as much information as possible regarding the possibility of Treasury Special Issues. They recognized that the U.S. capital market is the most liquid and stable in the world economic community and were interested in the unique opportunities Special Issues avail to the large-scale investor.

- 16 -

With respect to energy issues, I think it was signifi-
cant that they asked that we send Treasury energy experts
to give them a thorough briefing on the econometric studies
which support our view that lower oil prices are not only
in the interests of the consuming nations, but the produc-
ing nations as well. These meetings took place within
days after my departure from Kuwait.

ENERGY POLICY MATTERS

Before discussing the European part of the trip, I
think it would be appropriate to summarize certain oil
policy issues that certainly were underlying my visits in
the Mideast.

I am sure that Members of this Subcommittee are well
aware of the viewpoint I have expressed about the present
surplus and future declining price of oil. But I would
like to add to the overview, I have already given publicly.

At various times during my talks, I stressed the fact
that cutbacks in production, even apart from the political
and security implications for the producers, would turn out
to be economically harmful to the producers for three reasons.
In the first place, the price effects of such cutbacks
would inevitably lead to such further intensification of
research and investment relating to alternative sources
of energy and to alternatives to energy use that the effect
would be to reduce the total value which the exporters

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would receive for their oil over the life of their
producing fields. Cutbacks might bring a higher price
for a short period, but they would bring a more than
offsetting reduction in revenues for a long time
thereafter -- in view of the importers' increased
commitment to alternatives.

In the second place, maintenance of present costs
of export oil -- even with no increase -- would threaten
severe economic -- and, in some cases, political --
damage to a large number of consuming countries to an
extent which could not help but cause damaging backlash
on the producers as well.

In the third place, our Treasury studies of supply
and demand elasticity indicate that reductions in demand
need not be very great to reduce the total size of the
oil market significantly. Reductions in demand due to
present prices coupled with increases in competing
supplies will result in a steady reduction in OPEC's
market. Thus, Treasury studies show that for a wide
range of plausible demand and supply elasticities, recent
price increases, if maintained, will cost OPEC a sizeable
fraction of its sales.

- 18 -

I sensed real concern in Saudi Arabia and Kuwait. about
these questions. Both Governments have requested that we
continue our discussions of energy issues and, in particular,
they are interested in our estimates on the projected U.S.
needs for oil from the oil-producing countries.

In conjunction with some of the discussions in the
Middle East on the responsibility of oil producers to aid
lesser developed nations, I would like to provide the
Subcommittee with the following examples of constructive
actions taken by the OPEC countries:

-19-

1. Six OPEC countries have pledged over $3 billion to a special facility in the IMF to provide supplementary financing for oil importing countries. Four more OPEC countries are considering contributions. It is contemplated that this facility would be somewhat below market rates, but not in the concessional area, and would help both developing countries and developed countries with balance of payments problems arising from increased oil costs.

2. Kuwait is expanding its Economic Development Fund from approximately $600 million to over $3 billion. Assistance from the Fund will no longer be confined to Arab nations, and the new funds are to be lent on a concessional basis. Expansion of operations from current levels may be relatively slow because of the Fund's shortage of qualified technical personnel, but the World Bank has offered technical assistance to overcome this staffing problem.

3. Iran is extending over $1 billion in bilateral project assistance on favorable terms to Middle East and South Asian countries in addition to providing special price and financing arrangements for certain of its oil exports. Saudi Arabia and Iraq are extending similar project and/or oil financing facilities in the region.

- 20 -

4. Venezuela is actively negotiating the establishment of a $500 million trust fund with the Inter-American Bank for concessional lending. Venezuela is also making a further $30 million available to the Caribbean Development Bank.

5. Negotiations were completed in May on a charter for a 24-member Islamic Development Bank, with an initial capital in excess of $1 billion. Formal approval is with an operational target of end-1974.

6. On the basis of less definite information, Middle East OPEC countries appear to be considering special funds for Africa totalling perhaps $500 million, including a $200 million fund which would initially help with financing oil imports and then be recycled into longer term projects.

While we do not have complete and detailed information on all the financial initiatives, I think the preceding list amply indicates that oil producers are channelling a portion of their resources to the poorer countries, that at least a part of these resources is being made available on the favorable terms that the situation requires, and that we can anticipate still more constructive steps in the future.

- 21 -

EUROPE

After these discussions in the Midcast, I was pleased to have the opportunity to meet with a number of European leaders. In my view, a close acquaintance, and frequent and informal conversations with those responsible for economic and financial policy abroad are more than a useful tradition -- they are an essential part of our management of an increasingly complex world economy. There is no substitute for a face-to-face discussion of the current problems our nations face domestically as well as internationally. On this occasion, I particularly welcomed the chance to meet Minister Fourcade in France and Minister Colombo in Italy, since both had missed the Committee of Twenty Meeting in Washington in June because of the press of domestic matters.

This Subcommittee in the past has expressed specific interest in the problems of re-cycling oil money, and I will offer some comments on that situation in light of my talks in Europe. But I do at the outset want to make clear that this was not the only topic of concern -- specifically, the problem of inflation was very much of the minds of the leaders with whom I spoke.

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Inflation is the number one economic problem facing
the world today. All of Europe is experiencing inflation
rates unacceptable by past standards. And in a world
grown increasingly interdependent through rapid growth
of international commerce, it is increasingly recognized
that we all share a common interest in the success of
each other's anti-inflationary policies.

Inflation rates are too high everywhere. But they
differ widely from country to country. Our record has
not been good. But consumer prices have been rising even
faster in Italy, in the United Kingdom and in France.
And even those countries can feel some relief that they
are not experiencing the extraordinarily rapid increases
that Japan has been suffering.

It was the German experience which particularly drew
my attention. That country has within living memory
suffered most severely from uncontrolled inflation and
accordingly one finds there a low tolerance for inflation
and strong support for policies of restraint. The German
authorities have for an extended time followed firm
policies of demand management. I am convinced that these
policies explain why inflation in Germany is less virulent
than in other countries in a fundamentally similar situation.

- 23 -

Our discussions in Europe did focus on the problems of financing oil surpluses and deficits and the ability of private financial markets to handle the anticipated vast flows of funds. Let me make clear at the outset that there was general recognition that the private markets face a serious challenge. There will be strains in the face of this challenge. But no one was talking about impending failure of financial markets generally or of the monetary system. Nor was there worry that oil monies will be capriciously shifted from one market to another thereby disrupting the foreign exchange and financial markets. All of our experience confirms that the financial authorities of the Arab countries intend to manage their oil revenues in a conservative and responsible manner.

The problems of re-cycling oil revenues do not arise from this source. They derive rather from the very large magnitudes involved and the abrupt adjustments required to handle such magnitudes. OPEC oil revenues are presently running at an annual rate of some $100 billion. That is on the basis of present oil prices, and subject to a great many uncertainties. Some of these revenues are spent on imports and other current consumption, and the balance

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is available for investments and loans and so on. There
are uncertainties here, too, but again it is convenient
to think in terms of perhaps some 60 percent of total
OPEC oil revenues available for investment in one form
or another -- roughly $60 billion at the present annual
rate. By any standards, this represents a lot of money
to be re-cycled.

I should caution very strongly, however, against
extrapolating these figures into the future. You know
already my views about oil prices. In addition, there
are estimates which suggest that the OPEC countries may be
able to make rapid strides toward expanding their imports
and spending their oil revenues. Given these prospects,
there is in my view no basis for some of the extreme
projections of OPEC investments exceeding the trillion
dollar level within a decade or so.

But no one should ignore the potential difficulties
facing both the private financial markets and governments
in dealing with the large capital flows expected this year. This
is the matter which we discussed in Europe.

As far as the private markets were concerned, we were
careful to approach this question quite apart from the
difficulties of a few individual banks which have over-
extended themselves in trading primarily in the forward

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exchange markets. Forward trading is important to the proper functioning of the foreign exchange markets, but clearly some of these institutions simply got in over their heads.

Apart from these cases, we observed that the private financial system was doing a remarkable job of handling very large expanded operations. The financial intermediaries are, of course, adjusting their practices in the face of changed circumstances, in particular proving themselves unwilling to pay the same rates for short maturity deposits they cannot easily use as for longer-term deposits they can re-lend prudently. They are also becoming more active as brokers, arranging direct placements. And the lenders are exploring other channels for their funds, thus easing the pressures on the financial intermediaries. I refer here not only to the talks we have been having with Middle Eastern financial authorities about possible purchases of U.S. Special Securities but also about such developments as the recently announced Iranian advances to France and the U.K., and their investment in the Krupp concern in Germany.

It is true, of course, that world capital markets are very large even in comparison to prospective OPEC oil monies. To take the U.S. market alone: U.S. corporate

- 26 -

assets are estimated at well in excess of $2 trillion,
and equity and debt securities outstanding at the end
of last year amounted to some $1.8 trillion. Even the
relatively young "Euro Currency" market had at the end
of last year, before the new oil prices had much impact
on capital flows, grown to over $150 billion. Today,
that market probably approaches $200 billion.

As for the role of governments in facilitating the
flow of money through private markets and directly in
the re-cycling process, the first responsibility of
governments is to maintain those economic and financial
conditions that are conducive to sound economic activity.
In the present circumstances, this means firm policies
to deal with inflation and the avoidance of sharp turns
in policies. I can see nothing but trouble if we yield
to inflation.

A second area of governmental responsibility involves
the surveillance and supervision of banking practices.
Cases of faulty management in the foreign exchange dealings
of some banks, for example, suggest it is a time for careful
attention by supervisory authorities to the practices of
individual institutions. In my talks in Germany, I was
interested to have an explanation of the steps being taken
there to obtain better control of bank activities.

- 27 -

Yet another role of governments, or more commonly, of central banks, is that of assuring the smooth functioning of the financial system as a whole. The public authorities cannot be asked to provide compensation for the mistakes of management: They can properly be asked to see that the solvency problems of one institution do not snowball into severe liquidity problems for the entire system.

Beyond facilitating flows of funds through the private markets, there is also a proper role for governments directly in the re-cycling process.

Here I think first of the problems of the countries most seriously affected by the oil price increases. Not surprisingly these are the poorest countries of the world. I am encouraged that the oil exporting countries are beginning to recognize their responsibilities by expanding their assistance, both directly and indirectly, to some of these hardest hit countries. But there remains an urgent need to organize the necessary assistance for some countries where action by the oil exporters and reallocations within existing programs do not bring these problems to a manageable level. Progress toward that end was initiated at the June meeting of the Ministers of the Committee of 20 when it was agreed that a new Development Council would be established and that it would give priority attention to the problems of these most seriously affected countries.

- 28 -

That meeting also agreed on another important step involving governments in the re-cycling process, by establishing the special oil facility in the International Monetary Fund that I mentioned earlier.

Governments and central banks of the main countries have, in addition, an extensive network of swap arrangements developed first in the 1960's. Although not appropriate for long-term financing of oil deficits, they can serve usefully to assist in dealing with short-term pressures in the exchange markets.

The responsibility of governments does not end with these steps. In my conversations abroad, we were very keenly aware of the need to follow closely developments in the markets and, if necessary, develop new mechanisms to channel oil funds. We will be working on contingency plans which will allow us to act quickly and positively should need arise.

The breadth and diversity of U. S. capital markets suggest that we will attract a substantial share of OPEC funds. My European colleagues expressed some concern, in fact that these flows to the U. S. would exceed levels needed to finance our increased oil bills. Although they

- 29 -

recognized there was no evidence that such excessive
inflows to the U.S. were in fact occurring, they were
interested in what our reaction would be.

Our reaction to this potential problem is already
a matter of record. Earlier this year we removed our
capital controls and opened our markets to foreign
borrowers again on the basis prevailing before imposition
of restraints over a decade ago. Under these circumstances,
should there be substantial investments in U.S. Govern-
ment securities, this would reduce our official borrowing
from domestic sources and free resources for lending
abroad. We have offered OPEC nations an opportunity to
place a portion of their funds in special U.S. Government
securities, and there is deep interest on their part in
such placements. But this is a matter of convenience,
not an attempt to attract excessive investments here.

No special inducements are offered -- merely the opportunity
of government-to-government transactions which enable the
investor to transact very large sums without influencing
the market against himself. It is a facility we would
offer -- and have offered -- a number of foreign nations
holding very large dollar balances.

- '30 -

To a large extent, I returned from my meetings in the
Middle East and Europe reassured that a firm basis exists
for dealing with the critical problems of the day in a
cooperative framework. We have put the mechanisms in
place that will enhance economic development and at the same
time establish closer relationships with these countries.
Strengthening their economies is in the best interest of
the entire world. I believe we have taken the necessary
first steps in that effort and now we must work together
to implement these initiatives. I am confident that we
have the will and the resources to succeed in this critical
task.

- 000 -

Department of State

TELEGRAM

UNCLASSIFIED

PAGE 02 STATE 177004

AMEMBASSY ROME
USMISSION USUN NEW YORK
USMISSION NATO
AMEMBASSY SANAA
USINT BAGHDAD

UNCLAS STATE 177004

E.O. 11652: N/A
TAGS: PFOR
SUBJECT: DEPARTMENT PRESS BRIEFING

GENEVA FOR MEPC DEL

FOR YOUR INFORMATION AND GUIDANCE FOLLOWING ARE EXCERPTS
FROM DEPARTMENT SPOKESMAN'S PRESS BRIEFING AUGUST 13, 1974:

QUOTE:

Q. BOB, ON THE MIDDLE EAST, THERE WAS A REPORT TODAY, I THINK, FROM ISRAEL THAT THERE WERE HEAVY GUNS MOVED INTO THE GOLAN AREA IN VIOLATION OF THE STATED TERMS OF THE DISENGAGEMENT AGREEMENT.
IS THAT CORRECT?

A. AS WE UNDERSTAND IT, THE ISRAELIS HAVE DISCUSSED WITH THE UNITED NATIONS THE QUESTION OF WHETHER CERTAIN ITEMS OF EQUIPMENT SHOULD BE PERMITTED IN THE LIMITED FORCES AREAS.
THESE REPORTS APPARENTLY REFER TO THOSE DISCUSSIONS WHICH ARE CONTINUING, AND I HAVE NOTHING MORE FOR YOU TODAY ON THE SPECIFIC REPORTS --

Q. BOB, THE STRUCTURE OF YOUR SENTENCE -- I'M AFRAID, IT SEEMS TO BE A CAREFULLY DRAWN SENTENCE BUT IT DOES BOTHER ME.

Q. FIRST OF ALL, IS THE QUESTION OF WHETHER THE GUNS ARE THERE, OR THE ISRAELIS SAYING THE GUNS ARE COMING IN.

UNCLASSIFIED

Department of State

TELEGRAM

UNCLASSIFIED

PAGE 03 STATE 177004

A. WELL, AS I UNDERSTAND IT, THE ISRAELIS ARE DISCUSSING THIS QUESTION WITH THE UNITED NATIONS.

Q. I ASKED YOU WHETHER IT IS CORRECT THAT THESE GUNS HAVE BEEN MOVED IN PRESENTLY IN THERE.

A. WELL, WE UNDERSTAND THAT THE ISRAELIS ARE DISCUSSING THIS WITH THE U.N. I CANNOT CONFIRM ANYTHING ON THIS. WE HAVE SEEN SOME REPORTS, AND I AM GOING TO LOOK INTO IT. I JUST CAN'T GIVE YOU ANY CONFIRMATION ON THAT.

Q. DO YOU HAVE ANY COMMENT ON OTHER REPORTS OVER THE LAST COUPLE OF WEEKS ABOUT GREAT QUANTITIES OF SYRIAN -- OR OF SOVIET MILITARY EQUIPMENT GOING INTO SYRIA?

A. WELL, I HAVE SEEN THESE REPORTS. I CAN'T CONFIRM THEM OR DENY THEM.

Q. BOB, WILL YOU COMMENT ON THE REPORTS THAT THE SOVIET AMBASSADOR IN LEBANON IS APPARENTLY WARNING THE PALESTINIANS OF AN IMPENDING ISRAELI ATTACK?

A. I'M UNAWARE OF THAT REPORT, MARV, I'M SORRY.

Q. BOB, IN ANSWER TO THAT EARLIER QUESTION, ARE YOU SAYING THAT WE CAN'T CONFIRM THAT THE SOVIETS HAVE BEEN SUPPLYING MILITARY SUPPLIES TO SYRIA ON A LARGE SCALE?

A. I AM NOT CONFIRMING OR DENYING. I'M JUST LEAVING IT THERE.

Q. BOB, TO GO BACK TO THE MIDDLE EAST, THE UNITED STATES HAD MORE THAN A LITTLE TO DO WITH THE SETTLEMENT OF THE DISENGAGEMENT BETWEEN ISRAEL AND SYRIA. IF YOU CAN'T TELL US NOW, COULD YOU TAKE THE QUESTION WHETHER IT IS THE U.S. VIEW THAT THE SYRIANS HAVE GENERALLY BEEN OBSERVING THE TERMS OR VIOLATING THEM. THAT IS OF SOME, I THINK, CONSEQUENCE. THIRTY-THREE DAYS WERE SPENT TRYING TO GET THE TERMS, AND I SHOULD THINK YOU WOULD HAVE SOME IDEA

UNCLASSIFIED

Department of State

TELEGRAM

UNCLASSIFIED

PAGE 04 STATE 177004

WHETHER THEY ARE BEING OBSERVED.

A. I'LL BE GLAD TO TAKE IT. (LATER, THE FOLLOWING ANSWER WAS SUPPLIED FOR THE RECORDS IN GENERAL, WE ARE SATISFIED THAT THEY MAY HAVE DISENGAGEMENT AGREEMENT IS WORKING WELL. THERE HAVE BEEN FURTHER DISCUSSIONS ABOUT SOME ASPECTS OF ARMS LIMITATIONS NOT COVERED IN THE AGREEMENT. BUT, AS FAR AS WE ARE AWARE, THE PRINCIPAL ELEMENTS AGREED BY BOTH SIDES HAVE BEEN IMPLEMENTED.)

B. BOB, CAN YOU TELL US ANYTHING ABOUT THE DISCUSSIONS WITH THE EGYPTIANS TODAY. ANY DEVELOPMENTS REGARDING FINANCING OF THE AGRICULTURAL PRODUCTS THAT EGYPT WANTS?

A. YOU ARE REFERRING TO THE 10 O'CLOCK MEETING THIS MORNING -- I CANNOT. I WOULD HAVE TO CHECK TO SEE IF THE MEETING IS OVER. I ASSUME IT IS OVER BY NOW. BUT I WILL TRY AND GET A READ-OUT FOR YOU ON THAT. SECRETARY SIMON IS CHAIRING THE U.S. SIDE, AND I WILL

CHECK WITH TREASURY, AS WELL AS OUR OWN PEOPLE, AND TRY AND GIVE YOU SOMETHING THIS AFTERNOON ON THOSE MEETINGS. (LATER THE FOLLOWING ANSWER WAS SUPPLIED FOR THE RECORDS THIS MORNING AND AFTERNOON THE MEETINGS OF THE EGYPTIAN AND U.S. OFFICIALS WERE CONDUCTED IN SUBGROUPS DEALING WITH ECONOMIC, MEDICAL, CULTURAL AND SCIENTIFIC TOPICS OUTLINED IN THE ANNOUNCEMENT OF THE PRINCIPLES OF RELATIONS AND COOPERATION BETWEEN EGYPT AND THE UNITED STATES. THIS MORNING THE WORKING GROUP ON INVESTMENT AND ECONOMIC DEVELOPMENT, MEETING AT TREASURY, DISCUSSED WAYS FOR EGYPT TO ATTRACT FOREIGN INVESTMENT, EGYPTIAN FOODGRAIN REQUIREMENTS AND THE PRIORITY OF VARIOUS EGYPTIAN DEVELOPMENT PROPOSALS. OTHER GROUPS MET SEPARATELY IN THE U.S. DEPARTMENTS CONCERNED WITH CULTURAL EXCHANGES, SCIENTIFIC AFFAIRS, EVENTUAL RECONSTRUCTION OF THE SUEZ CANAL AREA AND COOPERATION IN THE FIELDS OF MEDICINE. A PRINCIPAL PURPOSE OF THESE MEETINGS IS TO GIVE ORGANIZATIONAL STRUCTURE TO THE COMMISSION'S COOPERATIVE UNDERTAKINGS.)

C. WAS FAHMI PRESENT AT THAT MEETING THIS MORNING?

UNCLASSIFIED

FOR IMMEDIATE RELEASE

AUGUST 16, 1974

OFFICE OF THE WHITE HOUSE PRESS SECRETARY

THE WHITE HOUSE

EXCHANGE OF TOASTS
BETWEEN THE PRESIDENT
AND
KING HUSSEIN BIN TALAL

STATE DINING ROOM

9:51 P.M. EDT

THE PRESIDENT: Your Majesties, Mr. Prime Minister and Mrs. Zaid Rifai, honorable guests:

May I, Your Majesty, on behalf of all of us here and on behalf of all of us in America, wish you a very, very warm welcome on this occasion.

And may I say on a very personal note that it is a great honor and privilege for me to have you as the first Chief of State to visit our country during the new Administration.

During the fine tenure of your being head of your country, we have had, as I recollect, some five national Administrations in the United States, some Democrat and some Republican, but during this period of time there have been some changes. Those changes I will make a comment or two about subsequently, but we, regardless of the Administration in the United States, have never changed our view concerning yourself and your country, and we are proud of our long friendship and association.

Those changes that have taken place -- and there are some changes in recent months -- have been encouraging because they seem to have opened the door to progress for peace. They seem to have given us all hope that there will be greater improvement as we move ahead. Those changes, I think, in many respects can be attributed to you because of your courage, the great risks that you have taken during your lifetime and your superb understanding of the problems of the Middle East and your desire to work for peace for all peoples.

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Page 2

There has been progress in this process of
change. More recently we can see it in the two
disengagements that have taken place in the last few
months, in the continuing consultation in the diplomatic
area; and speaking of the diplomatic, may I say that for
myself and our country, I pledge on behalf of the American
people, full support for the continuing diplomatic initiatives
which are so essential for the goals that we seek.

Those goals, those hopes, of course, are the
peace on a just, on a permanent basis that have for
so many years, many centuries, eluded all of those in that
area and the world at large, but it seems to me that as
we look ahead, with the foundation that has been built, that
with your continuing leadership, your continuing effort,
with your continuing courage and with the cooperation of
ourselves and many others, we can achieve what has been the
hope and aspirations of people throughout the world, as
well as in the Middle East.

And if I might, in closing, may I congratulate
you on your leadership, your dedication, your wisdom
and your cooperation. You have set an example for all
of us to follow and to use as a guidepost for people
not only in the Middle East but elsewhere.

So, may I ask that all join with me in a tribute
to His Majesty and to the Kingdom of Jordan.

To you and to your country.

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Page 3

KING HUSSEIN: Mr. President, Mrs. Ford, my
good friends:

It is a source of pride to me, sir, that over
the years, the many years that have passed, I have been a
firm believer in the great mutual benefits of relations
that have happily developed, not only between my country
and the United States, but recently in the period of
change that you so kindly refer to between many countries
in our part of the world and the United States of America.

To me, it has been an honor to have visited
this great Nation's capital many times, to have found
friendship, understanding, sympathy, not only for myself,
but for my country and for a common cause to which I am
proud to say we have always been dedicated, the cause of
an honorable, just peace.

On this visit, sir, I am most proud to convey to
you and to Mrs. Ford the feelings of not only my wife and
those who have accompanied me from Jordan, but my government
and the people of Jordan, the wishes to you, sir, for
every future success. I am sure these are the feelings of
all in the United States and the very many throughout the
world.

I am proud indeed, sir, to have had the
privilege of knowing you before this visit and most proud,
sir, that you consider me a friend. I am so touched by the
kind words, but more so the sincerity that I know you
possess, sir, which endears you to all your people, all the
people of the United States, and so many who have had
the privilege of knowing you and who will have this privilege.

It is really a source of pride to us to have had
this very close cooperation between our nations, to have
seen in the recent past some basic steps taken for the
establishment of a just and durable peace in our part of
the world, largely through the efforts of our friends in
the United States, the patience, the patient effort, the
perseverance, the determination that has resulted in the
first few steps materializing.

We know, sir, that you are dedicated to the
cause of peace with justice. We are not only comforted,
but confident, that the United States will contribute her
full share for the achievement of this worthy objective
under your wise leadership.

We will be ever proud to play our role, if
enabled, to the fullest possible extent that we some day
feel that will present the generations after us
with a better life, with a better future, with a better
world than possibly that in which we have had to live.

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PRESS
DEPARTMENT OF STATE

Public Statements [10]

August 19, 1974

No. 333

U.S.-JORDANIAN JOINT STATEMENT
WASHINGTON, D.C.

AUGUST 18, 1974

His Majesty King Hussein I of Jordan paid a visit to Washington August 15-18, at the invitation of the President. The President and His Majesty conferred at the White House and the President hosted a dinner in honor of His Majesty and Queen Alia. The President expressed his pleasure that His Majesty was the first Head of State to visit Washington in the new administration. His Majesty also conferred with the Secretaries of State and Defense and met with members of Congress. His Majesty was accompanied by the Prime Minister of Jordan, Mr. Zaid Rifai.

The talks were held in the atmosphere of friendship and understanding traditional in relations between the United States and Jordan. The President and His Majesty pledged that the two countries will continue to work closely together for the achievement of a just and lasting peace in the Middle East. The President stressed the continuity of United States policy in this regard as in all other aspects of American foreign policy and affirmed his commitment that the United States would continue its determined efforts to help bring a peace settlement in the Middle East. The discussions between His Majesty and the President and Secretary of State were a constructive contribution to the consultations now underway looking toward the next stage in negotiations for a just and durable peace in the Middle East. It was agreed that these consultations will continue with a view to addressing at an appropriately early date the issues of particular concern to Jordan, including a Jordanian-Israeli disengagement agreement.

The President and His Majesty reaffirmed the close ties of friendship between the United States and Jordan and pledged to continue their efforts to strengthen the bonds which join the two countries in mutually beneficial cooperation. Specifically, His Majesty and the President recalled that the joint U.S.-Jordanian statement issued June 18 at the end of President Nixon's visit to Amman announced that Jordan and the United States agreed to establish a Joint Commission to oversee and review at a high level the various areas of cooperation between the two countries. In fulfilling this agreement, the U.S. and Jordan have pledged to make every effort to expedite the development of an effective structure of cooperation and have agreed on the following concrete steps:

The United States and Jordan have established a general Jordan-United States Joint Commission under the chairmanship of the Jordanian Prime Minister and the U.S. Secretary of State. The first meetings of this Commission were held during the Prime Minister's visit to Washington August 5-8 and August 16-17 during which promising areas of mutual interest were identified.

PR #333

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The Commission will sponsor a meeting on economic development, trade and investment before the end of the year to review plans for Jordan's economic development and identify additional areas in which the United States can be of assistance. Work will begin immediately in Amman and Washington to prepare for this meeting. The Commission will also explore possibilities for increased American private participation in Jordan's economic development and ways of increasing trade between the two countries. Mr. Daniel Parker will head the American Delegation to the economic meeting, which will also include representation from various government agencies. The Jordanian Economic Delegation will be headed by Dr. Khalil Salem, President of the National Planning Council.

The Commission will arrange meetings on military assistance and supply problems at a mutually acceptable date to review implementation of continuing U.S. assistance to the Jordanian Armed Forces and to advance planning for future assistance. Jordan's Chief of Staff, Major General Zaid bin Shaker, and the Assistant Secretary of Defense for International Security Affairs, Ambassador Robert Ellsworth, will head the respective delegations.

It was further agreed that Jordan and the United States will give attention to the means by which educational, cultural and scientific cooperation between the two countries can be enhanced.

Finally, the President and His Majesty agreed that they would remain in close contact with each other with a view to giving their full support to the efforts being made to achieve peace in the Middle East and to the further strengthening of the ties between their two countries.

His Majesty expressed the hope that the President would be able to visit Jordan at some future date. The President said he would be happy to do so.

* * * * * * * * *

1044

PRESIDENTIAL DOCUMENTS: GERALD R. FORD, 1974

# Promotion of Navy and Marine Corps Officers

Executive Order 11799. August 17, 1974

AMENDING EXECUTIVE ORDER No. 11554 AS IT RELATES TO THE ESTABLISHMENT OF A MAXIMUM PERCENTAGE OF NAVY AND MARINE CORPS OFFICERS WHO MAY BE RECOMMENDED FOR PROMOTION FROM BELOW THE APPROPRIATE PROMOTION ZONE

By virtue of the authority vested in me by section 5711 (b) of title 10 of the United States Code, Executive Order No. 11554 of August 29, 1970, as amended, is amended to read as follows:

"The operation of so much of the provisions of section 5707(c) of title 10 of the United States Code as restrict, to a percentage of five percent of the total number of officers that a-board is authorized to recommend for promotion, the number of Navy and Marine Corps officers below the appropriate promotion zone who may be recommended as best fitted for promotion to the grade concerned, is hereby suspended until June 30, 1976."

GERALD R. FORD

The White House,
August 17, 1974.

[Filed with the Office of the Federal Register, 12:40 p.m., August 19, 1974]

# Visit of King Hussein of Jordan

U.S.-Jordanian Joint Statement Issued at the
Conclusion of His Majesty's Visit. August 18, 1974

The talks were held in the atmosphere of friendship and understanding traditional in relations between the United States and Jordan. The President and His Majesty pledged that the two countries will continue to work closely together for the achievement of a just and lasting peace in the Middle East. The President stressed the con-

tinuity of United States' policy in this regard as in all other aspects of American foreign policy and affirmed his commitment that the United States would continue its determined efforts to help bring a peace settlement in the Middle East. The discussions between His Majesty and the President and Secretary of State were a constructive contribution to the consultations now underway looking toward the next stage in negotiations for a just and durable peace in the Middle East. It was agreed that these consultations will continue with a view to addressing at an appropriately early date the issues of particular concern to Jordan, including a Jordanian-Israeli disengagement agreement.

Volume 10—Number 34

1045

It was further agreed that Jordan and the United States will give attention to the means by which educational, cultural, and scientific cooperation between the two countries can be enhanced.

## Death of the U.S. Ambassador to Cyprus

*Statement by the White House Press Secretary on the Slaying of Ambassador Rodger P. Davies in Nicosia During Anti-American Demonstrations.*
*August 19, 1974*

The President was shocked and deeply saddened by the death of Ambassador Davies in Nicosia today. This tragic incident emphasizes the urgent need for an end to the violence on Cyprus and an immediate return to negotiations for a peaceful settlement.

NOTE: The White House later announced that the President had sent messages of condolence to Ambassador Davies' son and daughter and to his mother.

The statement was made available by the White House Press Office. It was not issued in the form of a White House press release. For remarks at a ceremony honoring Ambassador Davies, see p. 1054 of this issue.

## Chicago, Illinois

*The President's Remarks Upon Arrival To Address the Veterans of Foreign Wars Convention.*
*August 19, 1974*

This is a wonderful, wonderful day in Chicago, and Betty and I are deeply grateful for all of you coming out to visit us on our first trip out of Washington since a week or 10 days ago. Thank you so, so very much.

Now, let me just add a word, if I might. I have said it several times, but all of you can contribute so much. We have got a lot of work to do, that includes me, as well as you, and our fellow Americans. We are going to do that work, and we are going to accomplish what has to be done, both at home and abroad.

There is, I think, a great opportunity for America, for what we can do at home and what we can do abroad. It will take a little belt tightening and sacrificing, but with the spirit that I know exists in America, and you exemplify it here this morning by your warm welcome, I am sure we can do the job, with God's help.

Thank you so very, very much.

NOTE: The President spoke at 9:30 a.m. at O'Hare Field, Chicago, Ill.

## VETERANS OF FOREIGN WARS

*The President's Address to the 75th Convention of the VFW in Chicago, Illinois.*
*August 19, 1974*

Commander Ray Soden, Governor Walker, my former members or former colleagues of the United States Congress, my fellow members of the Veterans of Foreign Wars:

Let me express my deepest gratitude for your extremely warm welcome, and may I say to Mayor Daley and to all the wonderful people of Chicago who have done an unbelievable job in welcoming Betty and myself to Chicago, we are most grateful.

I have a sneaking suspicion that Mayor Daley and the people of Chicago knew that Betty was born in Chicago. Needless to say, I deeply appreciate your medal and the citation on my first trip out of Washington as your President. I hope that in the months ahead I can justify your faith in making the citation and the award available to me.

Volume 10—Number 34

PRESS
Public Statements
DEPARTMENT OF STATE

August 20, 1974

No. 335

As Prepared for Delivery

EMBARGOED FOR RELEASE UNTIL DELIVERY

SPEECH BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
BEFORE THE
AMERICAN LEGION NATIONAL CONVENTION
MIAMI, FLORIDA
AUGUST 20, 1974

National Commander Eaton, Ladies and Gentlemen, My Fellow Veterans:

I bring you the greetings of President Ford, who has asked that I tell you that he looks forward to being with you at your national convention next year.

I am proud to accept the honor you do me this evening. The basic objective of this organization, the maintenance of our national security, has been the central concern of my life for over two decades as a teacher and writer as well as a public servant. Your unswerving dedication to that goal for half a century, through good times and bad, reflects not only the striving of a single organization but also the purposes of an entire nation.

The greatness of a nation is measured not only by its courage in an hour of crisis, but by its response to a prolonged ordeal. After a decade of national tragedy and travail, America and the American people have now emerged strong and united.

For two decades after the Second World War we believed that we could do everything; more recently some spoke of over-involvement and began to believe that we could do nothing. But as we approach our 200th anniversary our faith in ourselves has returned. We are the better for our experience. By learning our limits, we have learned our possibilities as well. We have rejected the extremes of world policeman and isolation which have too long dominated our debate. This has enabled us to move toward the definition of a foreign policy that the American people can support and sustain over the decades to come.

Our constancy is the hope of the world. As President Ford stated in his first address to the Congress last week: "So long as the peoples of the world have confidence in our purposes and faith in our word, the age-old vision of peace on earth will continue to grow brighter."

## America's Strength

There is no goal which occupies more of the time and thought and prayer of any President than to bring peace to America and peace to the world.

PR #335

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Each age has striven for peace; yet wars inevitably came either by decision or miscalculation. No generation in this century has avoided it. This age must be different. For the first time in history, man has the capacity quite literally to destroy mankind. In our era miscalculation could end life itself.

No group of men understands better the meaning of peace than those who have experienced personally the agonies of war.

The greatest of America's military leaders have always been in the forefront of those who have sought to turn man's eternal history of conflict into a new international order of justice and cooperation and peace.

Thus, George Marshall's contribution to mankind after the Second World War may have surpassed even his historic contribution during the war. He helped forge the national conviction that America's security is inseparable from the world's security, and that the great issues of national defense transcend party and partisan purpose. This tradition has served us well through five Administrations.

Dwight Eisenhower added another dimension. He called attention to the necessity of a strong, standing defense. In his words "the weak have no assurance of peace. They can only accept the future without influence upon it." But he also understood that in the nuclear age strength cannot be an end in itself. He proclaimed what no President since has ever forgotten: "There is no longer any alternative to peace."

So our search for peace begins with America's strength. For other nations to have confidence in our purposes and faith in our word, America must remain a military power second to none. As I can attest from experience, in time of crisis and at the conference table, America's military might is the foundation of our diplomatic strength. We have made progress towards peace in recent years because we have been flexible; but also because we have been resolute. Let us never forget that conciliation is a virtue only in those who are thought to have a choice.

- A strong defense is the essential deterrent to aggression. By demonstrating that there is no alternative to negotiation, it is the precondition of our policy of relaxing tensions with our adversaries.

- A strong defense is the cement of our alliances, reinforcing our partners' will to join in the common defense. It is the basis of mutual confidence and thus of our co-operation across the whole spectrum of our common interests.

Since the Second World War, each Administration regardless of party has supported the maintenance of our military strength. And on every major question of national defense for the past quarter century Congress has supported the President. This is a proud record which we must and will sustain.

But we are living in an age when the issues of defense are of unprecedented complexity. In the nuclear age we must:

- allocate resources between strategic and tactical forces;

- relate military strength to foreign policy goals;

- maintain our security while ending and ultimately reversing the arms race.

PR #335

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In an era of rough strategic balance, the threat to launch an all-out nuclear war grows less and less credible; hence it is less and less likely to deter the full range of potential conflicts. Military challenges at the conventional level may become more difficult to prevent. Thus, the political and military importance of tactical forces grows correspondingly.

Our conventional forces must therefore be strong. They keep the nuclear threshold high by helping to contain, discourage or altogether prevent hostilities. They are the essential tool of our diplomacy in times of crisis. In no recent crisis did we come close to using our strategic forces; but on many occasions our tactical forces were alerted or deployed to deter aggressive actions or to defend the interests of America and its allies. About one-third of our conventional forces are deployed abroad. They are there to serve these purposes. They are not overseas as a favor to foreigners; they are abroad as part of our defense.

American forces in Europe are a vivid illustration of these principles. Reducing our forces there unilaterally would risk serious military and political instability in the center of Europe, enhance Soviet political influence by default, and, ironically, make reliance on nuclear weapons more necessary. It would undercut promising negotiations for the mutual reduction of forces. The defense of Western Europe remains — as it has been throughout the postwar period — the cornerstone of our own security.

Just as we must assure a balance of conventional forces, so we must also assure a nuclear balance. We are determined never to fall behind in nuclear arms. We will never accept the strategic preponderance of another power. We will maintain our strategic weapons program at whatever level is required to achieve this end.

The definition of adequacy, or sufficiency or equivalence is not simple, however. Throughout history the essential task of national security was to accumulate military power. It would have seemed inconceivable even a generation ago that such power once gained could not be translated directly into foreign policy advantage.

Today we as well as the Soviet Union must start from the premise that in the nuclear era an increase in certain categories of military power does not necessarily represent an increase of usable political strength. When two nations are already capable of destroying each other, an upper limit exists beyond which additional weapons lose their political significance. The overwhelming destructiveness of nuclear weapons makes it difficult to relate their use to specific political objectives and may indeed generate new political problems.

A continual expansion of strategic forces by both sides will not result in greater security. It will only lead to new balance at higher levels of complexity and risk, and at exorbitant cost. It will generate an atmosphere of hostility and suspicion that makes political conflict more likely and that will over time thwart aspirations for a more tranquil and secure world.

This is why President Ford, an ardent advocate of national defense, as one of his first acts as President has invited the Soviet leaders to join with us in an intensified effort to negotiate an effective and equitable limitation of strategic arms.

PR #335

-4-

We will be guided by two basic principles:

- First, until further arms limits are negotiated, we will maintain American strategic strength whatever the cost. Our power will not falter through lack of resolve or sacrifice.

- Second, we will pursue the strategic arms limitation talks with an energy and conviction equal to the challenge before us. We are determined to become the masters of our own technology, not its slave.

The President has asked me to emphasize that in his view the choice is clear. We will maintain the nuclear balance by unilateral actions if we must and by negotiations if at all possible. I can assure you that these negotiations will not fail for lack of good will and readiness to explore new solutions on our part.

## America's Agenda for the Future

Winston Churchill once said to the American people "The destiny of mankind is not decided by material computation. When great causes are on the move . . . we learn that something is going on in space and time, which whether we like it or not, spells duty."

America now has an opportunity — and hence a duty — which comes rarely to a nation to help shape a new peaceful international order. This challenge exists for us as a people, not as partisans of any cause. This is why this effort — even in periods of great domestic strain — has had bipartisan support. The leaders of both parties in Congress deserve the nation's gratitude for having insulated our foreign and security policies from our recent domestic travails.

President Nixon's legacy to President Ford is a world safer than the one he found. President Ford has dedicated himself to leaving to his successor a world at peace and living with a consciousness of peace.

Many of the conflicts that have haunted the past three decades have been overcome. We have muted the constant crises over Berlin; for the first time it is possible to conceive of a lasting settlement in the Middle East; our combat involvement in the Viet-Nam war has been ended honorably and the level of fighting reduced. The United States and the Soviet Union after decades of profound suspicion have perceived a common interest in avoiding nuclear holocaust and in establishing a broad web of constructive relationships. And two decades of estrangement between the United States and the People's Republic of China have given way to constructive dialogue and productive exchanges.

But if this world is better than our fears, it is still far short of our hopes. We have eased many crises; we have not yet eliminated their roots. Our achievements, solid as they are, have not yet resolved the dangers and divisions of the postwar era. We have begun but not completed the journey from confrontation to cooperation, from coexistence to community. We are determined to complete that journey.

In pursuing our course we shall encounter many obstacles. There will be turmoil in many parts of the world such as the current situation in Cyprus. Our attitude will be that we cannot be the world's policeman but that we will always use our influence for peace and conciliation. We will not yield to pressure groups but we will always listen to reason.

PR #335

-5-

We will act in foreign policy as trustee of the future, conscious that we will be judged on how well we built an enduring peace and not how often we bowed to the emotional demands of the moment.

America is still the hope of the world, not only because of our physical resources and military might but because of the creativity of our people, the vitality of our institutions and the ideals of our nation.

At a time when some in this country doubted our ability to cope with the challenges of our future, most of the world perceived that America was emerging stronger than at any period in the past decade. Our alliances are strong. A nation once preoccupied with Viet-Nam is now addressing its broader purposes. A nation once isolated from one major communist power and in a posture of confrontation with the other has opened a constructive dialogue with both. And a nation facing the crises of a world grown economically interdependent has, unsatisfactory as it is, one of the lowest rates of inflation in the world and is less dependent on foreign sources of energy than any other industrialized nation.

Thus we have a firm base on which to build.

- We must ensure that the heart of American foreign policy, our alliances with the Atlantic Community and Japan, can meet the challenges of the next generation. America's principal alliances have overcome a period of strain brought about by the inevitable adjustment to new conditions. We now have an opportunity for a new period of creativity in join efforts to deal with the problems and opportunities of an increasingly interdependent world. Maintaining the vitality of our alliances and giving even greater impetus to their joing efforts will be one of the principal goals of President Ford's foreign policy.

- We must ensure that a history in which brief moments of improved Soviet-American relations gave way to prolonged periods of confrontation is replaced by an irreversible commitment to the maintenance of peace. We will spare no effort to reconcile the reality of competition with the imperative of cooperation. In the nuclear era there is no rational alternative.

- We must sustain the process of growing understanding and respect which we have launched with the People's Republic of China. Deep differences in ideology and policy remain. But we believe the new relationship serves fundamental national purposes of both countries; it can be strengthened with dedication and care and it will endure.

- We must create in the Middle East a lasting peace, not just another cease-fire. My trips throughout that tragically torn area have convinced me of one essential fact above all others: the peoples of the Middle East, be they Arab or Jew, have had enough of bloodshed; they cry out for peace. And peace can be theirs if they and we have the will and patience to achieve it. For the Arabs there can be no peace without a recovery of territory and the redress of grievances of a displaced people. For Israel, peace requires both

APR #335

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security and recognition by its neighbors of its legitimacy
as a nation. Our Arab and Israeli friends have, with our
help over the past six months, taken the first difficult
steps down the road toward fulfillment of these aspirations.
We have a long distance yet to travel, but with patience and
hard work we will complete the journey. The people of the
Middle East deserve it; the peace of the world demands it.

- We must work with our friends in Africa and the nonaligned world in support of their national independence, economic growth and social progress.

- We must build in the Western Hemisphere a new relationship of equality and partnership. We shall be guided by the conviction that a shared history creates an opportunity and common aspirations provide the basis for fresh approaches. The relationship between industrialized and developing nations cannot be solved creatively anywhere if not in this Hemisphere.

- We must strengthen the ability of the peoples of Indochina to determine their own destiny. After the Second World War we spent hundreds of billions to help former ally and enemy alike to recover from the devastation of six years of war. After the Korean War we spent billions to assist in the rebuilding of South Korea. Yet today, after a decade of war and the loss of 50,000 American lives, some hesitate to give South Viet-Nam — for whom the war has not yet ended — the help it so desperately needs to maintain itself as an independent nation. It would be tragic; it would break faith with all those Americans who have fought and died there if we now fail to make the relatively modest effort that the Administration has proposed to the Congress to enable South Viet-Nam to survive.

There is an item of unfinished business in Indochina that I know
is of special concern to this audience — the accounting for our men
who are missing in action, including the dead whose bodies were never
recovered. I have met periodically with the families of our missing
men continually over the past five years; I know how difficult it is
for them to live without knowing the fate of their loved ones. More
than 18 months have passed since the signing of the Paris Agreement,
which specified that there should be cooperation on this humanitarian
problem. Surely there should be no political or military advantage
in a proper accounting for the missing and the return of the remains
of the dead. Our efforts will continue until we have obtained the
fullest possible accounting as required by solemn agreements.

Peace however is something more than the absence of armed conflict. It is something deeper than the establishment of stability. To enlist the support of humanity it must reflect man's eternal hopes for a humane and prosperous world.

The excitement of creation, of crossing new frontiers, has
characterized every major period of American history. Now we face an
unprecedented new challenge.

The products of man's technical genius — weapons of incalculable
power, a global economic system, a technology that consumes finite
resources at an ever-expanding rate — have compressed this planet and

PR #335

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multiplied our mutual dependence. In an age of instantaneous communication the quest for justice and dignity has become universal. The national interest can no longer be pursued in isolation from the global interest — as the problems of energy, food and inflation have recently made clear.

Man has made his world interdependent. Now the challenge is to make it whole.

An enlightened national self-interest requires major American initiatives for an open and cooperative world. Without global solutions our own economy will stagnate. Without an American contribution there can be no global solution. Industrially we are the most advanced nation in the world. We are still a pioneering nation, on the frontiers of the most important revolutions of the last third of the 20th century in technology, communications, agriculture and health.

With your support and the support of the American people we will contribute to:

- cooperative efforts to ensure an expanding supply of energy and other essential materials at an equitable price;

- overcoming rampant global inflation by cooperating in building a trade, monetary and investment system that stimulates global economic growth;

- fashioning a long-term policy for dealing with chronic global food shortages and striking a balance between food production and population growth;

- helping the third of mankind threatened with starvation and permanent underdevelopment create a better future.

We in the United States cannot alone assure that the overriding need of cooperation will overcome the historic selfishness of the nation state. But it is equally clear that mankind cannot fulfill its needs without the faith, the dynamism and the creativity of our country.

## Conclusion

We have a long tradition in this country of arming with great haste when war comes upon us, and disarming with even greater haste when the war is over; we have tended to view our relations with nations in terms of absolutes — friend or foe, ally or adversary, unlimited war or permanent peace. We have acted in cycles of overcommitment and withdrawal, enthusiasm and cynicism.

This we can no longer afford. We must commit ourselves for the long haul. The search for peace is not a part-time job.

We must learn to deal with nuance, to strive for what is good while never forgetting what is best. Fate has offered us an unprecedented opportunity for creativity in the search for peace.

Let us not rest on the achievements of recent years, but let us summon new hope and new faith in ourselves to go beyond.

If we are true to ourselves, America can be both strong and purposeful, principled and realistic, equally devoted to deterring war and to achieving man's greatest hopes. Over three decades ago President Roosevelt said of his generation that it had a rendezvous with destiny. Let it be said of our generation that it had — and met — a rendezvous with peace.

* * * * * * * * * *

PRESS
DEPARTMENT OF STATE

August 19, 1974

No. 334A

SIGNING CEREMONY
UNITED STATES-EGYPTIAN COMMUNIQUE
WASHINGTON, D.C.

AUGUST 19, 1974

Secretary Kissinger: Mr. Foreign Minister, I would like to express the gratification of my colleagues, myself, above all, the President for the very fruitful meetings we have had here.

The discussions were in two parts. One concerned the direction of future peace efforts in the Middle East. We found these talks extremely constructive and they will be exceedingly helpful as we jointly plan the next phases of movement towards a just and lasting peace in the Middle East.

Egypt has played a crucial role in the first phase and we know it will play an equally crucial role in the future phases.

At the same time, we have had very detailed discussions about the bilateral relations that have developed between Egypt and the United States.

We should always keep in mind that it is only ten months since my friend Ismail came here for the first time. I won't say what he is expecting me to say -- (Laughter).

No one could imagine then that such a dramatic turn in our bilateral relations would be possible.

The Administration is strongly supporting the requests we have made to Congress. In addition, we will give the highest priority to Egypt's needs that we can meet under the P.L. 480.

But beyond all the specifics, we consider the growing friendship between Egypt and the United States a cardinal point of our foreign policy which will come to expression in the general area of the Middle East, as well as in our joint effort to strengthen our mutual alliance.

I would like to say, on behalf of the President and all of my colleagues, that the Foreign Minister's visit here has made a very major contribution in all of these respects.

PR #334A

[LC]

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Foreign Minister Ismail Fahmy: Mr. Secretary, on behalf of my colleagues of the Egyptian Delegation and in my name, I would like to thank you personally and thank your colleagues for the very constructive and useful discussions which took place between both of us, separately and between our two delegations, on the Joint American-Egyptian Commission.

I can't leave this historical moment without thanking your President for the honor he gave me in receiving me and having a working lunch with him, with your presence. It was a very constructive meeting which I consider is very indicative in the sense that it will build on the friendship between our two countries, and I can assure you from our part we will do our best to cement this friendship.

I am grateful, too, Mr. Secretary, for the reception which was given to me by the members of the House Foreign Affairs Committee and the members of the Senate Foreign Relations Committee.

I am grateful to every individual who participated in one way or another in my mission.

I am grateful to the information media for the coverage they have made to our talks, and I can assure you and assure the American people that we in Egypt have the best of intentions towards the American people. I think I would be very faithful in conveying through this opportunity to the American people the friendship of President Sadat and the Egyptian people, and that we are looking forward for the visit of my President to your country upon the invitation of President Ford, and we are sure that we will work together for a better future from every point of view.

Thank you, very much.

* * * * * * * *

PRESS
DEPARTMENT OF STATE

Public Statements [LC]

August 19, 1974

NO. 331

PRESS CONFERENCE
BY
THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE

AUGUST 19, 1974

#32

SECRETARY KISSINGER: I would like to begin
with a few observations about the tragic death of Ambassador
Davies.

Ambassador Davies has been a close associate
for all the years that I have been in Washington. He
worked closely with me on Middle East problems when he
was Deputy Assistant Secretary. His performance after
he was appointed Ambassador in Cyprus has been outstanding.
I think I can do no better than to read to you two cables
which I sent to him, one on July 22, the other on
August 10.

On July 22 I sent him the following cable.

"I would like to express my thanks for your
performance and that of your staff during the last week.
I relied heavily on your good judgment and on the
excellent reporting from Nicosia. The steadiness and
courage displayed by you and your staff under dangerous

2

conditions were exemplary. The Embassy's overall performance
deserves the highest commendation. Please convey my
congratulations and profound thanks to all members of
your staff. Hopefully, and in great measure due to your
efforts, the situation will calm in Cyprus."

Then on August 10, I sent him another cable.

"Art Hartman has just reported to me in
some detail on the magnificent performance of all of you
under the most dangerous and trying circumstances. Your
courage under fire, your accurate, perceptive and calm
reporting, and your continued efforts to further our policy
and protect American citizens with a reduced and over-worked
staff are a credit to you and are in the finest tradition
of the Service."

My associates will tell you that the highest
praise they usually get from me is the absence of
criticism. And I want to call your attention to these
two cables which express the extraordinary performance
of Ambassador Davies. Those of us who have known him
will miss him for his outstanding human qualities.

The Foreign Service, which is often criticized,
has produced no better representative. And his work

is in the best traditions of a service to which dedication
and the performance of a national duty are the principal
objectives.

I have sent the following message to Ambassador
Davies' children.

"You both have my deepest sympathy in this
tragic time. While there is little that anyone can say
at a moment such as this to lessen the sorrow, I want
you to know that we share your deep sense of loss. Your
father was loved, respected and admired by all of his
colleagues in the Foreign Service and the State Department.
You should be very proud of him; we are. Mrs. Kissinger
and I stand ready to do anything we can to help in the
difficult months ahead."

You know that the White House has already
announced that the President has ordered that a plane
be sent for the children. I have asked our Deputy
Under Secretary of State Brown, whose distinguished
service includes service as Ambassador in Jordan in
very difficult circumstances, to go out with this plane
to represent the United States in Cyprus until we can
appoint an Ambassador and get him in place. The

4

designation of an officer of the distinction of Ambassador
Brown leaves no doubt of the importance we attach to a speedy
and peaceful resolution of the Cyprus issue.

This morning also President Clerides called me
to express his personal sorrow at the loss of Ambassador
Davies, whom he described as a close personal and very
trusted friend. I assured President Clerides that the
United States fully understood the lack of responsibility
of the Cyprus Government for this tragic event. I assured
him that the United States would continue a major effort
to bring about peace, and he urged us to make such an
effort. I emphasized to him, however, that these efforts
would not be helped by anti-American demonstrations that
were unjustified by the record, and that could only
create conditions to hamper these efforts.

I also have had an opportunity this morning to
speak with President Ford about the situation in
the eastern Mediterranean. We were in close touch by
telephone yesterday and we have met personally several
times in the preceding days. President Ford has asked
me to make the following statement on behalf of the
United States :

5

First -- the United States shall insist
on the strict maintenance of the cease-fire on Cyprus.

Second -- the imperative and urgent need is to
begin negotiations.

Third -- we will continue to support efforts to
bring the parties to the negotiating table.

Fourth -- the United States will play any role
requested by the parties. We are also prepared to support
the able efforts of the British Foreign Secretary Callaghan
in this regard.

Fifth -- in these negotiations, we believe
it will be necessary for Turkey, as the stronger power
on the ground, to display flexibility and a concern for Greek
sensitivities, both in terms of territory and the size
of military forces on the island. I have made this
point directly this morning to the Prime Minister of
Turkey. I have been assured that the Turkish Government
considers the demarcation line negotiable, and that
it will carry out the provisions of the Geneva Agreement
calling for phased reductions of troops on Cyprus.

Sixth -- the United States greatly values
the traditional friendship of Greece. It has the highest

[L.C.]

6

regard for Prime Minister Karamanlis, and wishes every
success to his democratic government. We will use
our influence in any negotiation to take into full account
Greek honor and national dignity. At the same time,
we assume that all of our allies, including Greece,
join in collective defense in their own interests. We
are willing to strengthen these common alliance ties
and to help the Greek Government in any way possible.
We will not be pressured by threat of withdrawal from
the Alliance, or anti-American demonstrations which in
any event are totally unjustified by our record.

I repeat that this statement has been
gone over by President Ford.

Q Will we get a copy?

A You will have a copy -- I suppose we will
have a copy available.

Q May I ask, has the President been in touch
with Prime Minister Ecvit?

A I have been in touch with him, and I affirm
that the answer is, "Yes."

Q Will you take questions?

A Reluctantly.

Q Last week, one of your associates described
as plain "baloney" suggestions that the United States has
tilted toward Turkey. Do you share in that view?

And, can you tell us specifically, the consideration
that was given to cutting off arms to Turkey and why arms
were not cut off during the building crisis.?

A With the speaker sitting here and looking
balefully at me, my options as they say, are severely limited.

I completely support the statement of Mr.
McCloskey.

The situation on Cyprus tilted toward Turkey,
not as a result of American policy, but as a result of
the actions of the previous Greek Government which destroyed

[c]

8

the balance of forces as it had existed on the island.

The United States did not threaten the cut-off of military aid to Turkey for these reasons:

First, it was considered that such an action would be ineffective, and would not prevent the threatening eventuality.

Secondly, as was pointed out in this statement, we are giving economic and military aid as a reflection of our common interest in the defense of the eastern Mediterranean. Once such a decision is taken, it will have the most drastic consequences and not just over a period of time covering a few days, but over an extended period of time.

For all these reasons, it was judged that the United States would be both ineffective and counter-productive to threaten the cutoff of aid.

Short of this, however, we made the most repeated and urgent representations to Turkey in order to prevent the military action that happened. We have criticized the action and we believe also that the inflexibility of all of the parties in Geneva contributed to it.

Q Mr. Secretary, I don't know the exact wording

9

but back earlier, you said, "the United

States will play -- " this is in the President's statement,

"The United States will play any role requested by the
parties." Is that correct?

You will await some request from them, or do
you have any initiatives to take on your own?

A First of all, I think the exact status of
the statement I read, is that it is not a statement "by"
the President. It is a statement approved and directed
by the President -- and I don't know what the distinction
is, but generally, Presidential Statements are made at the
White House.

But the practical consequences are the same
because it has been gone over with the President, and he
has asked me to make it in his name.

Now on, "Have practical steps been proposed?"

It is my understanding that the British Government
is considering an initiative, which we shall support.
We have also made clear to the parties that we are prepared
to use any alternative method that promises results.

As you know, during the last week, we offered

10

to all of the parties a more active American role, and it
is up to them to avail themselves of it.

We have not yet made any specific proposal as to
a particular solution, but you will see in the statement
that I have just read, our view as to the direction in which
the negotiations should go.

Q Can I follow that up, Mr. Secretary?

Has there been any request by the parties to
get you more personally involved by either going there
personally and what would be the reaction if you were asked?

A There has not been any formal request, and
our first effort now, is to get the parties to the conference
table.

We would be prepared to entertain any request that
offered a prospect of success.

Q Mr. Secretary, there has been widespread
criticism around the world from diplomats as well as from
public demonstrators, that the United States used "quiet
diplomacy" which was so quiet during the past four weeks
that it was ineffective.

Can you address yourself to whether the United

11

States at an earlier point might have done what it has
done today if it had issued a firm, specific statement?

Also, you have been burned in effigy on Lafayette
Square, I believe, for the first time.

A Well I am honored -- is it really only the
first time? [Laughter.]

Q In Lafayette Square, I believe.

A I hope you all realize that half of the
demonstrators were State Department employees. [Laughter.]

Let us understand the context within which the
negotiations have taken place:

Until early August, until in fact August 8th,
it was the general judgment of all those dealing with the
negotiations, including specifically that of the United
Kingdom, that the conference in Geneva would lead to a
settlement and that in fact it would, after an initial
phase which would be conducted by Foreign Ministers, break
up into working groups that would settle the issue.

Under those circumstances, it would have been
highly inappropriate for the United States to make a public
statement of the solution that it advocated.

After it became apparent that the negotiations in

12

Geneva were heading for a stalemate, the United States,
first, responded to every request by the principal mediator,
the British Foreign Secretary, for specific assistance and
specific proposals.

In addition, the United States made many
demarches to Turkey to prevent the threatened military
action.

And it [United States] would have preferred if, perhaps,
some more flexibility could have been shown by all of
the parties in Geneva.

Our judgment was that a public statement would
freeze the positions and that it would not achieve the
objective of thwarting a military attack.

After the event, it is never possible to prove
whether some other course might not have been successful.
Our judgment was that under the circumstances, that
quiet diplomacy would lead to these results. But there
is a limit to what diplomacy can achieve. It cannot
substitute for an existing relationship of forces.

We understand the frustrations of the Greek
community. We understand also the frustrations and
disappointments of the Greek Government -- but it is

important to remember that the original dislocations were
not of our own making and that the United States while
it will try to be helpful, cannot solve all problems
around the world.

With respect to the demonstrations, it is worth
while to remember that a few years ago the demonstrations
were complaining about excessive American involvement.

Now the complaint seems to be the opposite.

Q Mr. Secretary, has the perception of the
United States as "tilting towards Turkey" regardless of
whether it's correct or incorrect in any way hampered
your efforts to serve as an effective mediator between the
two sides?

A I think that it is understandable that
Greek emotions run very deep at this moment.

I believe that upon calmer reflection, the re-
sponsible Greek leaders will recognize that the United
States has shown deep sympathy for the Greek Government
-- that we welcome the present democratic government in
Greece, and that within the limits of what was possible,

14

we have attempted to play a constructive role.

I think the Greek Government will also realize
that the United States' roles can be very important in
bringing about a result consistent with the dignity and
honor of all of the parties -- and we hope it will realize
that anti-American demonstrations and anti-American
gestures, do not contribute to our effectiveness.

Q Mr. Secretary, yesterday, Secretary Schlesinger talked about the arms embargo and the continued Turkish advances and it sounded like it was still an active possibility if the Turks continued their military operations on Cyprus.

Is it? And to what point do we invoke some form
of embargo?

A I do not wish to speak of circumstances
that have not arisen. We have been given assurances by
the Turkish Government that it would strictly abide by
the cease-fire -- and these assurances were reiterated
in my conversations with Prime Minister Ecevit this
morning.

I do not want to consider what our point of view
would be if it turned out that these assurances weren't correct.

[Continued on page C -1 ]

15

Q Mr. Secretary, on the question about military
assistance, please, the Foreign Assistance Act stated --

A Where is the question?

Q I am asking the question from back here. The
Foreign Assistance Act states --

A I thought I was looking at Bernie Gwertzman.

Q -- that defense services to any country shall
be furnished solely for internal security and for legitimate
self-defense. It also states that any country which uses
articles which we have given them in substantial violation
of the Act, shall be immediately ineligible for further
assistance.

The question that I am asking is whether or not,
what your understanding of the legal terms of the Act are,
whether or not we are not required under the terms of the
Act to cut military assistance to Turkey ?

A Well, I will have to get a legal opinion on
that subject, which I have not done. The considerations
from a policy point of view that were at the mind of the
President and myself have been stated here.

16

Q In your conversation with the Prime Minister of Turkey today, just to broaden one of your points, do you have the understanding that the one-third of Cyprus which is now under Turkish control can be significantly reduced in size?

A I have the understanding that it can be reduced in size.

Q But not significantly.

A I did not go into that much detail.

Q Mr. Secretary, in view of the crisis in Cyprus, can you assess, or could you reassess the capability of the United States to stop or limit local wars between smaller states?

A Well, the United States has never claimed, and could not accept the proposition, that it must stop every local war between smaller states wherever they occur.

Secondly, it is also clear that the United States cannot be asked to redress any upset in any balance regardless of how it has occurred, and where it has occurred, by its own military forces.

We are disappointed by the outcome, by the actions of various of the parties at various times on Cyprus.

We chose--in order not to internationalize the issues too much--to support Britain, which had a legal position as a guaranteeing power in its mediating effort.

17

We are prepared to continue to do this, and we
are prepared also to make other efforts.

I do not think it is fair to generalize from this
one event, which had a long and complicated history, on a
global basis.

Q Mr. Secretary, earlier you spoke about a new
British initiative. Could you give us an idea as to what
it would be, what would be the direction of it?

A
I saw a ticker before I came
here in which this had allegedly been announced by the
British Foreign Office, and I do not want to go into the
details of it because it has been the subject of confidential
discussions over the weekend. I simply wanted to indicate
the United States' support for it.

Q Mr. Secretary, on the one hand, just a couple
minutes ago, you did not rule out totally the cutting off,
or the possible cutting off, of military aid. You merely
said you didn't want to discuss circumstances which have
not yet arisen. But, on the other hand, you gave us two
very good reasons why the cut-off of military aid would not
be effective anyway. Why can you not rule it out?

A The cut-off of military aid was judged not to

be effective in the circumstances existing last week. It
is a step we would take only in very extreme circumstances
which, I repeat, have not arisen, and which I do not fore-
see. We cannot rule it out for all time, but we do not fore-
see it, and we are not threatening with it now.

Q Mr. Secretary, what is happening on the nego-
tiations on the Jackson Amendment? Where does that stand?
When do you expect that that will come to a fulfillment?

A As the three Senators said after the meeting
with President Ford the other day, we made good progress
in the negotiations. We hope that we can make further
progress during this week.

19

Q Mr. Secretary, in your conversations
with the parties involved in the Cyprus situation, would
you care to characterize the situation now as a winding
down, or do you expect it to go on indefinitely?

A No, my impression is that the military
operations have substantially wound down. It is, of
course, a serious problem for Greece whether and under
what circumstances it will enter negotiations. We favor
early negotiations because we do not believe that the
situation will improve. Indeed, the status quo will tend
to be confirmed the longer the negotiations are delayed.

I have stated the American position with respect
to the negotiations and with respect to the role we would play in
a negotiation, and we expect to have clearer responses about
that in the next few days.

Q Mr. Secretary, could you explain the American
position on the next step in the diplomatic dialogue in the
Middle East? Yesterday's U.S.-Jordanian communique said that
at an appropriately early date there should be a Jordanian-
Israeli disengagement agreement. Does this now mean that
the United States sees the next step being between Israel
and Jordan?

20

A First of all, let me say that there are many versions of disengagement schemes between Jordan and Israel, and the United States did not imply by this statement that it backed any particular scheme between Jordan and Israel.

As to which negotiation should be next, I think we cannot decide until the round of discussions is completed, which involves the Foreign Minister of Syria, who is arriving this week; the Foreign Minister of Saudi Arabia, who is arriving next week; and we have also invited the Prime Minister of Israel to come here in the first half of September for discussions with the President. It is only after all of these discussions are completed that we can make a judgment as to what the next move should be.

Q Following up on that, do you expect on your scheduled trip to India to stop off in the Middle East to possibly begin some shuttle diplomacy between Amman and Jerusalem?

A I think that as a general practice a foreign government must not expect that every time there is a crisis, the Secretary of State will come rushing into the area and spend all of his time settling that particular crisis. On that basis we could never conduct a consistent

21

American foreign policy. And it cannot become the rule
that every issue is settled by the personal shuttle
diplomacy of the Secretary of State.

I'm prepared to go to the Middle East for a
specific trip. And I may, if there is an especially
critical point, engage in a brief shuttle diplomacy.
But I do not think it is in the U.S. interests nor in
the interests of other countries to expect me personally
to settle every issue no matter where it arises.

So we will support further diplomatic moves,
but one must not expect that the same degree of extended
absences from Washington which characterized the last
negotiations.

Q Thank you very much, Mr. Secretary.

(The news conference was terminated at 1:35 p.m.)

COMMUNIQUE

Aug. 19

His Excellency Ismail Fahmy, Minister of Foreign Affairs of the Arab Republic of Egypt, made an official visit to Washington, August 12-19, at the invitation of Secretary of State Henry Kissinger. The Foreign Minister met with President Ford and Secretary Kissinger for a wide-ranging and productive exchange of views. He also led a high-level delegation to meetings of the United States-Egyptian Joint Cooperation Commission.

Foreign Minister Fahmy was the guest of honor at a small working luncheon with President Ford on August 14. The Foreign Minister also attended the Joint Session of Congress August 12 and heard in person President Ford's commitment to the continuity of United States foreign policy, and specifically his commitment that the United States Government would continue determined efforts to help bring about a peace settlement in the Middle East.

The discussions the Foreign Minister held with President Ford and Secretary Kissinger were a constructive contribution to the consultations now underway looking toward the next stage in negotiations for a just and durable peace in the Middle East -- a peace which they agree should take into account the legitimate interest of all the peoples in the Middle East, including the Palestinian people, and the right to existence of all states in the area. They agreed that the Geneva Peace Conference on the Middle East should resume its work as soon as possible, building on the progress achieved, with the question of other participants from the Middle East area to be discussed at the Conference.

Bennett, Under Secretary of Commerce Tabor, AID Administrator

Tabor, and high officials from the Departments of State, Treasury,
Commerce, Agriculture, and Health, Education and Welfare, as well as
the National Science Foundation.

[10]

The two delegations joined in lengthy and detailed discussions of mutually beneficial programs in the economic, scientific, and cultural fields that would be undertaken under the auspices of the Commission. Both sides expressed their satisfaction with the progress made thus far in designing measures for deepening cooperation between Egypt and the United States, and reaffirmed their intention to continue building on the foundation of the June 14 Statement of Principles and Cooperation.

There was mutual agreement that the membership, procedural rules and meeting schedules for the working groups under the Commission should remain flexible.

At the conclusion of the Commission session, the Foreign Minister and the Secretary of State as co-chairmen announced a number of results and conclusions:

## Economic and Financial Cooperation

- The first meeting of the Commission's Joint Working Group on Economic and Financial Cooperation took place at the Treasury Department on August 13. It was decided there that certain Egyptian representatives would remain in Washington for further discussions on matters of mutual interest.

- It was agreed that, in order to reduce obstacles to trade and investment between the United States and the Arab Republic of Egypt, it would be useful to enter into a convention for the avoidance of double taxation and for mutual cooperation between the tax authorities of the two countries. A revised draft of such a convention was reviewed this past week by the working group and agreement in principle was reached on basic objectives and subjects to be covered. Both parties are hopeful that final agreement can be reached during discussions at meetings of the working group and sub-committees scheduled to commence in the United States on October 7.

[lc]

## Private Investment

- Ways of stimulating a greater flow of private investment capital to promising industrial and infrastructure projects in Egypt were discussed. The United States delegation expressed its intention to send experts as soon as possible to consult with the Egyptian National Institute of Management Development on the means of giving this organization added capability for preparing feasibility studies which would attract foreign investors. The United States side noted with interest the Egyptian hope that this organization might ultimately serve as a nucleus for wider regional endeavors.

- The Egyptian delegation presented detailed studies on a number of projects susceptible to joint venture arrangements with American business firms, and the United States delegation undertook to explore means of bringing these opportunities to the attention of interested American companies.

## Suez Projects

- Useful discussions were held on specific areas in which, subject to Congressional authorization and approval, United States' assistance might contribute to the satisfaction of urgent needs concerning the reopening of the Suez Canal and the rehabilitation of the principal cities along the canal: Suez City, Ismailia, and Port Said. The two sides examined Egyptian priorities in this respect, and a tentative understanding was reached as regards the desirability of dealing primarily with telecommunications, electric power distribution, equipment for canal operations, road-building equipment, building material and infrastructure requirements. It was agreed that a number of projects will require further studies in working group meetings scheduled for October.

Egyptian plans for the further development of the Suez Canal were discussed. The Egyptian delegation would welcome the participation of American firms in this field.

## Commodity Imports

Detailed discussions were held and agreement in principle was reached on a list of commodities the United States might provide under a projected commodity import program, as well as on the machinery for dealing with Egyptian needs promptly once Congress has authorized and appropriated funds under this AID program.

## Agriculture

Particularly rewarding discussions between Egyptian and United States officials took place with regard to Egypt's vitally important agricultural sector in order to establish and improve communication between the two countries on agricultural development. Ideas for introducing new technologies and promoting agro-business opportunities were examined at length. The discussions emphasized the importance of technical cooperation between the two countries for the modernization of Egyptian agriculture.

- It was agreed that the re-initiation of the grain silos project should receive high priority attention.

- The United States extended an invitation to the Egyptian Minister of Agriculture, Mohamed Moheb Zaki, to visit the United States in the fall for further discussions on these matters.

- Another important topic, examined in depth by the working group and the Commission as a whole, concerned Egypt's requirements for certain agricultural commodities. These needs were examined in light of current American crop projections and worldwide requirements for American foodstuffs. These requirements are now under active

- 8 -

[10]

(a) Review of the 1962 Agreement between Egypt and the United States with a view to strengthening the cultural and educational relations between the two countries.

(b) The expansion of exchange visits by prominent Egyptians, and Americans in fields of mutual interest, and general augmentation of cultural and educational exchanges.

(c) Arrangements for exhibitions of art treasures and visits by performing arts groups.

(d) Planning for the reconstruction of the Cairo Opera House.

(e) Discussion of the possibilities of United States technical assistance and support for Egyptian cultural and educational institutions.

(f) Discussion of additional ways in which exchanges can contribute to deepening mutual understanding and promoting cooperation between the peoples of the two countries.

The Egyptian Delegation conveyed with great pleasure the decision of the Egyptian Government to place the "treasures of Tutankhamen" on exhibit in the United States on the historic occasion of the Bicentennial Festivities as a further expression of the friendship of the people of Egypt for the people of the United States.

## Medical Cooperation

United States and Egyptian delegates examined specific proposals for medical cooperation, and reached general agreement on the broad priority objectives in areas in which initial cooperative efforts will be concentrated. These areas are health, manpower development, joint research, and the production of pharmaceuticals and health-related supplies and equipment. They also examined ways of developing a long-term program of cooperation in these areas, through such mechanisms as strengthening cooperation with the Nasser Institute for Research and Medical Care, Dr. Edwards, Assistant Secretary of Health of the

Department of Health, Education and Welfare, will lead a delegation to meetings of the Working Group on Medical Cooperation in Cairo, September 23-26.

## Future Activities of the Joint Commission

Throughout the Commission meetings, United States delegation members paid especially close attention to Egyptian explanations of their economic and social development priorities and objectives over the coming several years and declared that they would make special efforts to ensure that United States cooperative programs were in harmony with Egyptian aspirations for a stronger and more diversified economy. With this end in mind, it was agreed by the two delegations that specific plans should be drawn up by November for establishing a joint business chamber composed of business representatives from both countries. Such an organization could be a practical instrument for expanding the flow of trade between the two countries and joining businessmen in mutually advantageous ventures.

Secretary of State Kissinger and Foreign Minister Fahmy, on behalf of their respective delegations, reached a common judgment that the discussions this week, which ranged over a broad landscape of cooperation, had lent substance to the spirit of friendship and respect that has been developing between the two countries. The meetings were characterized by growing momentum and a sense of anticipation among those concerned with the Commission's activities. The two chairmen concluded that, the necessary preliminaries and organizational preparations now having been completed, the work of the Commission can proceed in earnest.

PRESS
DEPARTMENT OF STATE

Public Relations
X Egypt [lc]

AUGUST 19, 1974

No. 334

AUGUST 19, 1974

His Excellency Ismail Fahmy, Minister of Foreign Affairs of the Arab Republic of Egypt, made an official visit to Washington, August 12-19, at the invitation of Secretary of State Henry Kissinger. The Foreign Minister met with President Ford and Secretary Kissinger for a wide-ranging and productive exchange of views. He also led a high-level delegation to meetings of the United States - Egyptian Joint Cooperation Commission.

The discussions the Foreign Minister held with President Ford and Secretary Kissinger were a constructive contribution to the consultations now underway looking toward the next stage in negotiations for a just and durable peace in the Middle East -- a peace which they agree should take into due account the legitimate interest of all the peoples in the Middle East, including the Palestinian people, and the right to existence of all states in the area. They agreed that the Geneva Peace Conference on the Middle East should resume its work as soon as possible, building on the progress achieved, with the question of other participants from the Middle East area to be discussed at the Conference.

The President declared that he was dedicated to strengthening in all ways the relationship of growing friendship and trust between Egypt and the United States. In this connection, the President reaffirmed to the Foreign Minister that he was looking forward with pleasure to the visit of President Anwar al-Sadat later this year.

During the week, the Foreign Minister consulted with members of the Foreign Affairs Committee of the House of Representatives led by Chairman Morgan, and with members of the Senate Foreign Relations Committee led by Senator Fulbright. While noting that further legislative action is required, the Foreign Minister expressed his gratification that during this past week the Senate Foreign Relations Committee had included in its report to the Senate an authorization for $250 million aid for Egypt. He discussed evolving United States-Egyptian relations with journalists and businessmen.

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## The Joint Cooperation Commission

A centerpiece of the activites in Washington this past week was the second session of the Joint Cooperation Commission, the first having been held in Cairo on June 12. The Commission meetings were attended by Ismail Sabri Abdallah, Egyptian Minister of Planning, Ashraf Ghorbal, Ambassador of Egypt, Dr. Ahmed Effat, Coordinator of Egyptian-American Economic Cooperation, and other high officials of the Egyptian Ministries of Foreign Affairs, Industry and Mining, Agriculture, Finance, Reconstruction and Housing, Electricity, Supply, Higher Education and Scientific Research, and Public Health, as well as from the Federation of Egyptian Industries, the Agency for International and Arab Economic Cooperation, and the Suez Canal Authority.

The United States delegation included Secretary of the Treasury Simon, Deputy Secretary of State Ingersoll, Under Secretary of the Treasury Bennett, Under Secretary of Commerce Tabor, AID Administrator Parker, and high officials from the Departments of State, Treasury, Commerce, Agriculture, and Health, Education and Welfare, as well as the National Science Foundation.

There was mutual agreement that the membership, procedural rules and meeting schedules for the working groups under the Commission should remain flexibile.

### Economic and Financial Cooperation

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## Private Investment

## Suez Projects

- Useful discussions were held on specific areas in which, subject to Congressional authorization and approval, United States assistance might contribute to the satisfaction of urgent needs concerning the reopening of the Suez Canal and the rehabilitation of the principal cities along the canal: Suez City, Ismailia, and Port Said. The two sides examined Egyptian priorities in this respect, and a tentative understanding was reached as regards the desirability of dealing primarily with telecommunications, electric power distribution, equipment for canal operations, road-building equipment, building material and infrastructure requirements. It was agreed that a number of projects will require further studies in working group meetings scheduled for October. Egyptian plans for the further development of the Suez Canal were discussed. The Egyptian delegation would welcome the participation of American firms in this field.

## Commodity Imports

- Detailed discussions were held and agreement in principle was reached on a list of commodities the United States might provide under a projected commodity import program, as well as on the machinery for dealing with Egyptian needs promptly once Congress has authorized and appropriated funds under this AID program.

## Agriculture

- Particularly rewarding discussions between Egyptian and United States officials took place with regard to Egypt's vitally important agricultural sector in order to establish and improve communication between the two countries on agricultural development. Ideas for introducing new technologies and promoting agro-business opportunities were examined at length. The discussions emphasized the importance of technical cooperation between the two countries for the modernization of Egyptian agriculture.

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- The United States extended an invitation to the Egyptian Minister for Agriculture, Mohamed Moheb Zaki, to visit the United States in the fall for further discussions on these matters.

- Another important topic, examined in depth by the working group and the Commission as a whole, concerned Egypt's requirements for certain agricultural commodities. These needs were examined in light of current American crop projections and worldwide requirements for American food-stuffs. These requirements are now under active consideration by the United States Government. A decision will be communicated to the Egyptian Government as soon as possible.

In the meantime, meetings of United States and Egyptian representatives on other areas of cooperation proceeded. Specifically:

## Technology, Research and Development

Representatives of the two governments carried on mutually beneficial discussions on cooperation in science and technology. Promising cooperative activities that were discussed included support to research and development facilities in Egyptian universities and research centers, as well as possible joint research and development projects in the fields of water economy, agricultural and industrial development, and certain important environmental problems.

Agreement was reached that there would be a meeting of the Working Group on Technology, Research and Development in Cairo during the week of October 7, 1974, to cover the following principal items:

(a) Completion of the text of an intergovernmental agreement to promote and facilitate science and technology cooperation between governmental agencies, universities and research centers of the two countries.

(b) Consideration of initial specific projects proposed for cooperation.

(c) Review of ongoing cooperative science and technology programs and activities.

## Culture and Education

Agreement was reached that there would be a meeting of the Working Group in Cairo October 24-25-26, 1974, at which the principal items to be considered would be:

(b) The expansion of exchange visits by prominent Egyptians and Americans in fields of mutual interest, and general augmentation of cultural and educational exchanges.

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(e) Discussion of the possibilities of United States technical assistance and support for Egyptian cultural and education institutions.

## Medical Cooperation

United States and Egyptian delegates examined specific proposals for medical cooperation, and reached general agreement on the broad priority objectives in areas in which initial cooperative efforts will be concentrated. These areas are health, manpower development, joint research, and the production of pharmaceuticals and health-related supplies and equipment. They also examined ways of developing a long-term program of cooperation in these areas, through such mechanisms as strengthening cooperation with the Nasser Institute for Research and Medical Care. Dr. Edwards, Assistant Secretary of Health of the Department of Health, Education and Welfare, will lead a delegation to meetings of the Working Group on Medical Cooperation in Cairo, September 23-26.

Throughout the Commission meetings, United States delegation members paid especially close attention to Egyptian explanations of their economic and social development priorities and objectives over the coming several years and declared that they would make special efforts to ensure that United States cooperative programs were in harmony with Egyptian aspirations for a stronger and more diversified economy. With this end in mind, it was agreed by the two delegations that specific plans should be drawn up by November for establishing a joint business chamber composed of business representatives from both countries. Such an organization could be a practical instrument for expanding the flow of trade between the two countries and joining business in mutually advantageous ventures.

Secretary of State Kissinger and Foreign Minister Fahmy, on behalf of their respective delegations, reached a common judgment that the discussions this week, which ranged over a broad landscape of cooperation, had lent substance to the spirit of friendship and respect that has been developing between the two countries. The meetings were characterized by growing momentum and a sense of anticipation among those concerned with the Commission's activities. The two chairmen concluded that, the necessary preliminaries and organizational preparations now having been com-

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The Secretary of State and the Foreign Minister intend to hold a
third session of the Joint Cooperation Commission before the end of this
year during the visit to the United States of President al-Sadat. It is
anticipated by that time that additional concrete programs of cooperation
in a variety of fields will be reviewed and put into operation.

* * * * * * * * *

FOR IMMEDIATE RELEASE

AUGUST 21, 1974

THE WHITE HOUSE

REMARKS OF THE PRESIDENT
AND
HENRY A. KISSINGER
SECRETARY OF STATE
TO THE FAMILY OF
AMBASSADOR RODGER P. DAVIES

ANDREWS AIR FORCE BASE

11:36 A.M. EDT

SECRETARY KISSINGER: Mr. President, Excellencies, ladies and gentlemen:

A professional Foreign Service Officer has come home, returned not to joy, but to sadness, not to parade, but to solemn ceremony.

Rodger Davies embodied the qualities and spirit which mark an American. He chose an unusual profession, a profession which required that to serve his country, he leave his home, but never forget it. Wherever he went, the heritage of America was in his heart. He remembered the dignity of the individual where individuals had lost their dignity.

He remembered the rights to liberty and justice where these rights were under attack. He remembered peace where there was war. In that sense, Rodger Davies never left home.

In the diplomatic entrance at the Department of State, the American Foreign Service Association maintains plaques which list the names of those members of the Foreign Service who gave their lives under heroic or tragic circumstances in the service of their country. It is not a short list, and now tragically another name will be added.

I am today awarding to Ambassador Davies the highest award of the Department of State, the Secretary's Award. The citation reads as follows:

"For inspiring leadership, outstanding courage and dedication to duty for which he gave his life, Nicosia, August 19, 1974."

Awards and names on plaques are little comfort to those who loved and admired Rodger Davies. To his children, Dana and John, I would only repeat my remarks of Monday that Ambassador Davies was beloved, admired and respected by his colleagues. He was a professional in the fullest and best sense of the word.

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THE PRESIDENT: Secretary Kissinger, Dana and
John, and members of the family, distinguished guests:

This is a very sad occasion for all Americans
as we gather here to pay tribute to a great patriot, one
of our most admired and one of our most respected diplomats.
Rodger Davies leaves behind many friends and many, many
accomplishments in the career that he selected.

He possessed the full measure of many of those
attributes which are so invaluable as a person and in the
career that he sought. He had judgment, he had dignity, he
had wisdom, and he had humor, and all of these are necessary
ingredients for the job that he chose for his full life.

As the Secretary has mentioned, Rodger Davies was
a professional in the fullest sense. His services to our
country embodied the best of time, of effort and competence.
He loved and worked for peace and he lost his life in the
search for peace for all America and all the world.

On Monday of this past week I had the opportunity
to make some remarks to a group who had served their country
in uniform and I had the sad occasion to announce to that
group the loss of life by Rodger Davies. And I said to them
and I repeat here today, some serve in uniform, some serve
in other capacities. The loss of life in either case means
as much to America.

And therefore it is appropriate on this occasion
that we pay a very special tribute to a great Ambassador,
highly respected by his friends; a person who gave his full
life to the career that he sought. So I say it is an honor for
me on this occasion to present on behalf of all Americans, the
flag to Dana, the Ambassador's flag, to which your father, as
my personal representative in the service of his country,
brought such great distinction.

END (AT 11:45 A.M. EDT)

This Copy For

NEWS CONFERENCE

#11

AT THE WHITE HOUSE
WITH JERRY TER HORST

AT 12:43 P.M. EDT

AUGUST 21, 1974

WEDNESDAY

MR. TER HORST: The President has a very full schedule today, as you have already noted.

This morning, he met with staff members, including Jack Marsh, Brent Scowcroft, Al Haig, Bill Timmons, Bob Hartmann, me, and several others. The President then met for about 40 minutes with the Congressional Black Caucus. You have a list, I believe, of those who have attended. It has been posted.

I think you have had a report while the President was out at Andrews from Congressman Rangel.

The President, among other things, at the Black Caucus, assured the Members of Congress that he did not view the defense budget as sacrosanct against cuts, but, of course, that reductions in the defense budget would have to be geared to priority matters of national security and that he was not suggesting that there could be a slash across the boards at the Pentagon.

As you are also aware, the President then went out to Andrews Air Force Base to greet the family of Rodger Davies, the Ambassador to Cyprus, who was killed Monday. Ambassador Davies' body was returned to the United States on the same plane and will be interred in California tomorrow.

Also on the plane were the Ambassador's children, daughter Dana, who is 20, and son John, 16, and some other members of the family. Mrs. Davies, the Ambassador's wife, died last year. You are going to get a transcript of the remarks at Andrews, if you haven't received them.

At Andrews, Secretary Kissinger presented Ambassador Davies posthumously the Secretary's Award, the highest State Department award for those in the Foreign Service who have sacrificed their lives in the service of the country.

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#11

The President has also signed an Executive Order, which you have, that directs the flags at the Federal buildings, vessels, grounds at the embassies abroad be flown at half-staff on the day of interment, which is tomorrow.

The President today is nominating Mr. Davies' successor as Ambassador to Cyprus. William R. Crawford, a Career Foreign Service Officer, will be nominated to fill that post, and Ambassador Crawford is now serving as Ambassador to the Yemen Arab Republic. Before that, he was Deputy Chief of Mission in Nicosia.

As you know, Deputy Under Secretary of State for Management, L. Dean Brown, is our representative in Nicosia at the present time. Under Secretary Brown will remain there until Mr. Crawford's nomination is confirmed by the Senate.

Q Do we have a biography on that?

MR. TER HORST: I believe we have one coming up on that.

Q Where is Mr. Brown now?

MR. TER HORST: He is now Deputy Under Secretary of State for Management.

Q Do you know where the funeral services in California will be?

MR. TER HORST: I don't know that, but we can find that out. I believe it is Placerville. I believe that was his hometown, but we will check that.

At 12:30, the President met with Ambassador Khan of Pakistan; at 12:35 with Ambassador Zahedi of Iran; and at 12:40 with Ambassador Kaul of India. These are brief meetings to give the President an opportunity to reaffirm to these Ambassadors the continuity of American foreign policy with regard to South Asia and to assure them of his desire for continued good relations with the three nations.

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#11

PRESS
DEPARTMENT OF STATE

August 24, 1974

No. 340

EXCHANGE OF TOASTS BY
SYRIAN DEPUTY PRIME MINISTER AND FOREIGN MINISTER
ABDUL HALIM KHADDAM
AND THE HONORABLE HENRY A. KISSINGER
SECRETARY OF STATE
DEPARTMENT OF STATE, WASHINGTON, D.C.

AUGUST 23, 1974

Secretary Kissinger:

Foreign Minister, Distinguished Guests:

It is for all of us a very moving and very important occasion to welcome to the United States for the first time in fifteen years the Foreign Minister of Syria. My own acquaintance with Syrians is less than-- goes back less than ten months. At the end of October last year I invited a member of the UN delegation to visit Washington, a colleague of Mr. Khaddam's, the Vice Minister of Foreign Affairs. And when he sat down I said: "Good afternoon" and he in effect replied, before I can give you an answer to this I have to get instructions from Damascus. (Laughter) At the end of that meeting I did not say it was a constructive conversation. (Laughter) Two months later I was invited to visit Damascus, and I had heard that the Syrians were not the easiest people in the Middle East to deal with. And I might say I have not found in the Middle East easy people to deal with. (Laughter) I had a conversation with President Assad which was scheduled for two hours and was still going strong after eight, in which we were negotiating at great length the invitation to the Geneva Conference. And everything was very pleasant and easy and I didn't know why the Syrians had acquired the reputation of being difficult. When at the end of the seventh hour I made the mistake of asking President Assad whether there was anything in the letter he objected to. And he said yes there was one sentence to which he took particular exception. And it was the sentence that said the parties have agreed to go to the conference. (Laughter) And that is the first time I heard that Syria was not coming to the Geneva Conference (Laughter). Now since then I have got to know my friends from Syria very well indeed. We spent 32 days negotiating the disengagement on the Golan Heights and it was a difficult negotiation. But it also was a very moving experience, because it was clear that one reason that Syrians have a reputation for being difficult is because they are also very principled. And as we were engaged in this negotiation, we were really doing two things. We were discussing the lines and all the various military aspects; but beyond that we were making a move from war to peace. And towards a consciousness that the people in the Middle East have suffered enough, and have proved their courage sufficiently often, and that they must learn to coexist in justice and on the basis of a

PR #340

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permanent peace that takes into account all their concerns. And given
the hatred and suffering that appeared for a generation, it was natural
that this would be a very difficult and very prolonged process. I came
away with two determinations, one that President Ford overruled this
morning which was never to have to negotiate with Syrians again.
(Laughter) The second that the process that has started must be
continued. And we must continue to work together for the just and
lasting peace that all the peoples in the Middle East deserve. As you
all know this was confirmed by President Ford in his first speech and it
was confirmed by him again in all of his conversations with the Foreign
Ministers from Middle East countries that have taken place, including
with Foreign Minister Khaddam. At the same time, all of the parties in
the Middle East have to understand that this is a process that requires
patience and understanding, and I think we have achieved a great
measure of it. Speaking for myself and for the American Administration,
we believe that the visit of Foreign Minister Khaddam has made a major
contribution to this process, and we believe that the understanding of
each sides' position that is essential has been greatly strengthened. It
is also noteworthy that ten months ago when Vice Minister Ismail silently
visited me in my office, there were no relations between Syria and the
United States. In the interval we have not only formally established
diplomatic relations, but I think that the process of exchanges of
communications has grown to a remarkable degree, so that our two countries
should not be isolated from each other again. That process too was
greatly strengthened by the visit of the Foreign Minister and the talks
we started will be continued when he returns for the session of the
General Assembly. So I would like to take this opportunity to welcome my
friend Foreign Minister Khaddam to propose a toast to President Assad, to
the friendship of Syria and the United States, and to our guest Foreign
Minister Khaddam.

Foreign Minister Khaddam:

Secretary Kissinger, Dear Friends:

Permit me to express my gratitude for the creation of this warm
atmosphere which has prevailed during my visit to Washington. Since my
arrival in Washington and during the talks which I conducted with
Secretary Kissinger and the meeting I had with the President, I have felt
that there is a great deal of concern on the part of the American officials
and Administration on the establishment of good relations between our two
countries. Certainly credit should be given to Dr. Kissinger for the key
role he played in bringing about the situation, in improving relations,
and bringing them to what they are today. Dr. Kissinger believes that the
Syrians are somewhat difficult to negotiate with and he has attributed this
to a number of factors. But Dr. Kissinger realizes very well that those
Arabs who made great contributions to world civilization, who provided a
great deal to the world, and who have left an impact throughout the
world -- throughout the ages, throughout history -- are people who cannot
easily accept injustice which is the result of aggression. We have spread
peace throughout hundreds of years because of our belief that peace
cannot be established and preserved unless it is based on right and
justice. Therefore, it was necessary for the Arabs to struggle for
peace. Their struggle on behalf of the Palestinians, whose rights have

PR #340

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been violated, is only a part of the Arab struggle for the restoration of
peace based on justice. The Arabs want peace and because of their desire
for peace, they were eager to start a dialogue with the United States of
America. It was a result of their realization that the United States of
America was sincerely eager to make serious efforts for the achievement of
peace based on justice in the area. In concluding my remarks, I would like
to reiterate my appreciation and my thanks to Dr. Kissinger for affording
me this opportunity to meet so many outstanding American citizens and a
goodly number of representatives of the press. Please permit me to
convey to you the greetings of the Arab people of Syria; because we
believe in the need to establish good relations and relations that will
grow better as time goes by between our people and the people of the
United States of America. Relations can be good only if they are based on
mutual respect and if such is the case then they will serve not only our
mutual cause but the cause of peace throughout the world. I would like
to invite you to join me in a toast to President Ford, a toast to the good
relations between our two countries and a toast to Dr. Kissinger, who
indeed played a great role in bringing about the good relations that we
enjoy today between our two countries, and who made possible for me this
very pleasant occasion tonight. And I would like to add to this a toast
to Dr. Kissinger who no longer believes that the Syrians are a difficult
people to negotiate with. (Laughter)

* * * * * * * * *

PRESS CONFERENCE NO. 1

of the

PRESIDENT OF THE UNITED STATES

2:30 P.M. EDT

August 28, 1974

Wednesday

In the East Room
At the White House
Washington, D.C.

THE PRESIDENT: Please sit down. Good afternoon.

At the outset, I have a very important and a
very serious announcement. There was a little confusion
about the date of this press conference. My wife, Betty, had
scheduled her first press conference for the same day.
Obviously, I had scheduled my first press conference for
this occasion. So, Betty's was postponed.

We worked this out between us in a calm and
orderly way. She will postpone her press conference
until next week, and until then, I will be making my own
breakfast, my own lunch and my own dinner. (Laughter)

Helen?

QUESTION: Mr. President, aside from the Special
Prosecutor's role, do you agree with the Bar Association
that the laws apply equally to all men, or do you
agree with Governor Rockefeller that former President Nixon
should have immunity from prosecution, and specifically,
would you use your pardon authority, if necessary?

THE PRESIDENT: Well, let me say at the outset
that I made a statement in this room in the few moments
after the swearing-in, and on that occasion I said
the following: That I had hoped that our former President,
who brought peace to millions, would find it for himself.

Now, the expression made by Governor Rockefeller,
I think, coincides with the general view and the point of
view of the American people. I subscribe to that point of
view, but let me add in the last ten days or two weeks I
have asked for prayers for guidance on this very important
point.

In this situation, I am the final authority.
There have been no charges made, there has been no action
by the courts, there has been no action by any jury, and
until any legal process has been undertaken, I think it is
unwise and untimely for me to make any commitment.

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Page 2

Q Mr. President, you have been in office 19 days now, and already some of your naturally conservative allies are grumbling that you are moving too far to the left. Does this trouble you?

THE PRESIDENT: I don't think I have deviated from my basic philosophy nor have I deviated from what I think is the right action. I have selected an outstanding person to be the Vice President. I have made a decision concerning amnesty, which I think is right and proper -- no amnesty, no revenge -- and that individuals who have violated either the draft laws or have evaded Selective Service or deserted can earn their way, or work their way, back. I don't think these are views that fall in the political spectrum right or left.

I intend to make the same kind of judgments in other matters because I think they are right and I think they are for the good of the country.

Q Mr. President, may I follow that with one more example, possibly, that is there is a report the Administration is considering a $4 billion public works program in case the inflation rate gets higher than it is, say six percent. Is that under consideration?

THE PRESIDENT: I think most of you do know that we have a public service employment program on the statute books which is funded right today, not for any major program, but to take care of those areas in our country where there are limited areas of unemployment caused by the energy crisis or any other reason.

There is a redommendation from some of my advisers saying that if the economy gets any more serious, that this ought to be a program, a broader, more expensive public service program. We will approach this problem with compassion and action where there is a need for it.

Q Mr. President, there are two political questions: Do you definitely plan to run for President in 1976, and if so, would you choose Governor Rockefeller as your running mate, or would you leave that choice up to the Convention's free choice?

THE PRESIDENT: I will repeat what has been said on my behalf, that I will probably be a candidate in 1976. I think Governor Rockefeller and myself are a good team, but of course, the final judgment in this matter will be that of the delegates to the national Convention.

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QUESTION: May I just follow up on Helen's question: You are saying, sir, that the option of a pardon for former President Nixon is still an option that you will consider, depending on what the courts will do.

THE PRESIDENT: Of course, I make the final decision. Until it gets to me, I make no commitment one way or the other. But I do have the right as President of the United States to make that decision.

QUESTION: And you are not ruling it out?

THE PRESIDENT: I am not ruling it out. It is an option and a proper option for any President.

QUESTION: Do you feel the Special Prosecutor can in good conscience pursue cases against former top Nixon aides as long as there is the possibility that the former President may not also be pursued in the courts?

THE PRESIDENT: I think the Special Prosecutor, Mr. Jaworski, has an obligation to take whatever action he sees fit in conformity with his oath of office, and that should include any and all individuals.

QUESTION: What do you plan to do as President to see to it that we have no further Watergates?

THE PRESIDENT: Well, I indicated that, one, we would have an open Administration. I will be as candid and as forthright as I possibly can. I will expect any individuals in my Administration to be exactly the same. There will be no tightly controlled operation of the White House staff. I have a policy of seeking advice from a number of top members of my staff. There will be no one person, nor any limited number of individuals, who make decisions. I will make the decisions and take the blame for them or whatever benefit might be the case.

I said in one of my speeches after the swearing in, there would be no illegal wiretaps or there would be none of the other things that to a degree helped to precipitate the Watergate crisis.

QUESTION: Do you plan to have a code of ethics for the Executive Branch?

THE PRESIDENT: The code of ethics that will be followed will be the example that I set.

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QUESTION: Mr. President, do you have any plans now for immediate steps to control and curtail inflation, even before your summit conference on the economy?

THE PRESIDENT: We have announced that as far as fiscal control is concerned, we will spend less in the Federal Government in the current fiscal year than $300 billion. That is a reduction of $5 billion 500 million at a minimum.

This, I think, will have two effects: Number one, it will be substantively beneficial, it will make our borrowing from the money market less, freeing more money for housing, for the utilities to borrow, and in addition, I think it will convince people who might have some doubts that we mean business.

But in the meantime, we are collecting other ideas from labor, from management, from agriculture, from a wide variety of the segments of our population to see if they have any better ideas for us to win the battle against inflation.

QUESTION: Mr. President, as you know, a number of people have questioned your opposition to a return to wage and price controls. Gardiner Ackley, a University of Michigan economist that you have listened to in the past, recently testified before Congress that if we are really frightened about inflation, we ought to think about returning to wage and price controls.

Can you foresee any circumstances under which you would be willing to do that and make them work?

THE PRESIDENT: I foresee no circumstances under which I can see the reimposition of wage and price controls. The situation is precisely this: This past week I had a meeting with the Democratic and Republican leadership, plus my own advisers in the field of our national economy.

There was an agreement, number one, that I would not ask for any wage and price control legislation. There was agreement by the leadership on both sides of the aisle that there was no possibility whatsoever that this Congress in 1974 would approve any such legislation. Number three, labor and management almost unanimously agree that wage and price controls at the present time or under any foreseeable circumstances were unwise.

Under all those circumstances, it means that wage and price controls are out, period.

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Q Can you give us your present thinking on how best you might use Mr. Rockefeller as Vice President once he is confirmed?

THE PRESIDENT: I have a lot of ideas. Until Congress confirms Mr. Rockefeller, we are sort of in a honeymoon period. I really shouldn't make any commitments until we actually get married.

But to be serious, if I might, I think Governor Rockefeller can be extremely important in the new Administration as my teammate in doing effective work in the area of the Domestic Council. We have to prepare legislative proposals that will go to the Congress when the new Congress comes back in January.

I believe that Governor Rockefeller will take over my responsibilities heading the subcommittee of the Domestic Council on privacy. Governor Rockefeller, with his vast experience in foreign policy, can make a significant contribution to some of our decision-making in the area of foreign policy. Obviously, in addition, he can be helpful, I think, in the political arena under certain guidelines and some restrictions.

Q Mr. President, you just ruled out wage and price controls, but I just would like to ask you why Mr. Nixon, when he was President, felt he was compelled to go back to them because the situation was getting out of hand? Can you just reinforce what you told Mr. Brokaw, why you think the situation is that much out of hand yet?

THE PRESIDENT: I can only refer you to the circumstances and the decision of President Nixon in August of 1971. That was a decision he made under quite different circumstances. We are in totally different circumstances today. We have gone through a 3-year period, more or less. I think we have learned a few economic lessons that wage and price controls in the current circumstances didn't work, probably created more dislocations and inequities. I see no justification today, regardless of the rightness or wrongness of the decision in 1971, to reimpose wage and price controls today.

Q Mr. President, you are still working with the same team of economic advisers who advised your predecessor. As a matter of putting your own stamp on your own Administration, and inspiring confidence, do you plan to change the cast of characters?

THE PRESIDENT: There is one significant change. Just within the last 48 hours, Herb Stein, who did a superb job for President Nixon, is going back to the University of Virginia, and Alan Greenspan is taking over and he has been on board, I think two days.

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QUESTION: Some oil governments and some commercial cartels, notably Aramco in Saudi Arabia are restricting oil production in order to keep oil prices artificially high. Now the U.S. can't do anything about Venezuela, but it can conceivably vis a vis cartels like Aramco. What steps and actions do you plan to take in this regard?

THE PRESIDENT: I think this points up very vividly the need for us to accelerate every aspect of Project Independence, I think it highlights the need and necessity for us to proceed with more oil and gas drilling a greater supply domestically. I believe it points up the requirements that we expedite the licensing processes for new nuclear reactors. I think it points up very dramatically the need that we expand our geothermal, our solar research and development in the field: of energy.

In the meantime, it seems to me that the efforts that were made several months ago to put together a group of consumer-industrial nations requires that this group meet frequently and about as much as possible in concert, because if we have any economic repercussions because of high oil prices and poor investment policies, it could create serious economic problems throughout the industrial world. So it does require, I believe, the short-term action by consumer nations and the long-term actions under Project Independence.

QUESTION: Mr. President, to pursue Helen's inquiry, has there been any communication between the Special Prosecutor's office and anyone on your staff regarding President Nixon?

THE PRESIDENT: Not to my knowledge.

QUESTION: Mr. President, the beneficial effects of the present accounting on inflation will take some time to dribble down to the wage earner. What advice would you give the wage earner today that is having trouble stretching his dollar over his plate?

THE PRESIDENT: I think every wage earner has to realize we are going through a serious economic problem with inflation in double digits, not as bad as people in many Western European countries, but it will require him or her to follow the example of their Federal Government which is going to tighten its belt and likewise for an interim period of time watch every penny.

QUESTION: Mr. President, you said last March in an interview, I think in Seapower magazine, that you came down quite strongly in favor of establishing a U.S.-Indian Ocean fleet with the necessary bases to support it. Do you still favor that and do you favor the development of Diego Garcia?

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QUESTION: I want to ask about this new veterans benefits bill which Congress passed in the last hours. I understand this is a bill that you favored and maybe spurred the Congress to pass. It saves $200 million.

My question is: Is that a real savings when it gives the disabled man less money than an able man and disrupts completely the veterans going to college in September?

THE PRESIDENT: I had no part in just how that House action was taken. I did discuss, coming back from the VFW meeting in Chicago, with a number of Members of the House and Senate, the problem that I faced with the bill that came out of conference, which would have added $780-some million over and above the budget for this year and a substantial increase for a number of succeeding years.

But that particular compromise was put together and brought to the Floor of the House without any participation by me. I think there are some good provisions in that particular House action. It does tend to equalize the benefits for Vietnam veterans with the benefits that were given to World War II and to Korean veterans.

There are some, I think, inequities, and you probably pointed out one. I hope when the Congress reconvenes within a week or so that they will go back to conference, take a good look and hopefully eliminate any inequities and keep the price down because it is inflationary the way it was and it may be the way it was proposed by the House.

QUESTION: Mr. President, concerning the Federal budget, will domestic social programs have to bear the whole brunt of the anti-inflationary fight or can some money come out of the defense budget, and if so, how much?

THE PRESIDENT: No budget for any department is sacrosanct, and that includes the defense budget. I insist, however, that such money be made available to the Army, the Navy and the Air Force so that we are strong militarily for the purpose of deterring war or meeting any challenge by any adversary. But if there is any fat in the defense budget, it ought to be cut out by Congress or eliminated by the Secretary of Defense.

In the meantime, all other departments must be scrutinized carefully so that they don't have any fat and marginal programs are eliminated.

Mrs. Tufty?

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QUESTION: Mr. President, you had given top priority to inflation. Do you have a list of priorities and if so, what is number two?

THE PRESIDENT: Well, of course, public enemy number one, and that is the one who have to lick, is inflation. If we take care of inflation and get our economy back on the road to a healthy future, I think most of our other domestic programs or problems will be solved.

We won't have high unemployment. We will have ample job opportunities. We will, I believe, give greater opportunities to minorities to have jobs. If we can lick inflation, and we are going to try, and I think we are going to have a good program, most of our other domestic programs will be solved:

QUESTION: Do you have any plans to revive the Office of Economic Opportunity, and if so, in what areas?

THE PRESIDENT: As I am sure you know, the old poverty program has been significantly changed over the last several years. The Headstart program has been taken out of OEC and turned over to the Department of HEW. The health aspect of the old poverty programs are also over in HEW.

The Congress just approved, and Mr. Nixon approved, a Legal Services Corporation, which was another part of the old poverty program. So, we ended up really with just CAP, the Community Action Program.

I think most people who have objectively looked at the Community Action Program and the model cities program and maybe some of the other similar programs, there is duplication, there is overlapping.

And under the new housing and urban development bill, local communities are given substantial sums to take a look at the model cities programs and related programs, and they may be able to take up the slack of the ending of the Community Action Programs.

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NEWS CONFERENCE

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AT THE WHITE HOUSE

WITH JACK HUSHEN

AT 11:40 A.M. EDT

SEPTEMBER 10, 1974

TUESDAY

MR. HUSHEN: Before I begin today's announcements and take your questions, I would like to make a few observations about the events that brought me to this podium.

Jerry terHorst is gone, and we will all miss him, especially those of you out there who saw him as one of your own who was working day and night to put into effect President Ford's policies and openness in this Administration.

In the short time that Jerry was here, he had gone a long way in swinging open the shutters which had closed off the communications between the White House and the press corps.

But those of us who worked so closely with him in the Press Office during the past month will also miss him. He is a professional in every sense of the word, and a man of great ability, an individual of the utmost integrity.

As you know, I came to the White House at the invitation of Jerry terHorst and by the appointment of President Ford. Jerry and I worked together for eight years at the Detroit News and then continued to be associated as I served as spokesman for Senator Griffin, and then at the Justice Department.

And, of course, it goes without saying that I have the greatest respect and admiration for him, and I think all of us are grateful for what he did to establish President Ford's press policies on such a firm foundation in such a short time.

There have been a couple of problems which I think can be cured as individuals who are new to the White House become more accustomed to their role and the role that must be played by the Press Secretary or by the Deputy Press Secretary.

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Q That was yesterday?

MR. HUSHEN: Yes, last night.

Q Why couldn't we have that yesterday? We asked you 50 times what they were doing.

Q What time did it end?

MR. HUSHEN: It ended about -- I think that meeting was from 5:00 to 7:00. The President met this morning at 11:00 with Mr. Edward Heath, former Prime Minister of Great Britain, and presently leader of the opposition party in the House of Commons there.

Secretary Kissinger also attended this meeting. Mr. Heath is in the United States on a brief private visit and the President wished to take the occasion to invite him to the White House and to renew their acquaintance and for an informal exchange of views.

Q Will you answer Ted Knap's question about who attended this meeting last night?

MR. HUSHEN: I said I didn't have the names. I would try to get them.

Q How long was that meeting?

MR. HUSHEN: Two hours, approximately.

Q The meeting with Heath?

MR. HUSHEN: I believe it is still going on.

Q It began at 11:00?

MR. HUSHEN: Shortly after 11:00, correct.

As you have seen from the schedule for today, there will be an arrival ceremony for Prime Minister Rabin from Israel on the South Lawn.

Following the arrival ceremony, the President and the Prime Minister will meet in the Oval Office where the President will have a second meeting with the Prime Minister on Thursday morning and there will be a formal White House dinner that evening.

While he is in Washington, the Prime Minister will also meet with Secretaries Kissinger, Schlesinger, and Simon.

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As we announced on Friday, just for your information, this visit will provide the President and the Prime Minister the opportunity to review the Middle East situation, following discussions here this summer with Israeli and Arab representatives, and to discuss further progress towards a Middle East peace settlement.

They will also have the opportunity to discuss bilateral issues in the spirit of a long-standing, close relationship between the United States and Israel, and following the elements of cooperation announced in the joint statement issued in Jerusalem on June 17.

At noon, the President will meet with his economic advisers to look at issues raised in the September 5 conference of economists and determine if any consensus was developed.

They will also be discussing Secretary Simon's recent trip to Paris for the Finance Ministers' Meeting. Attending that meeting will be Counselor Rush, Secretary Simon, Director Ash, Chairman Greenspan, Chairman Burns, and Bill Seidman.

We have one addition to today's schedule. At 1:00 the President will see Congressman Rhodes to discuss legislative matters.

Q When is that?

MR. HUSHEN: 1:00.

At 8:00 tomorrow morning, the President will meet with the Republican Congressional leadership to discuss what can be accomplished in the remaining weeks of this session of Congress. I would anticipate that the President will send a message to Congress on this subject. That should come sometime this week, but the time will depend on the discussion with the leaders tomorrow.

Following that, the President will participate in the labor conference on inflation in the East Room.

Q What time will that start?

MR. HUSHEN: It starts at 9:45.

The President will be in the East Room for the morning session and then will host a lunch for the participants in the State dining room. The conference will run until 3:45.

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As in the case of the economist's meeting, the media seating is limited, and there will only be one seat per organization allocated.

Those of you who will not be going to Pinehurst tomorrow and wish to attend the conference, we ask that you make your desire known so we can assess our space needs.

Print media requesting space should call Morrie Feibusch at 456-2976. Electronic media should call Bill Roberts at 456-2100. By the way, that conference will be carried live on Channel 26 from beginning to end.

About 12:30 tomorrow, the President will depart the South Lawn en route to Andrews Air Force Base, Pope Air Force Base, and Pinehurst, North Carolina.

In Pinehurst, the President will participate in dedication ceremonies for the World Golf Hall of Fame. Then he will play golf with some of those who are being inducted, and then attend an evening dinner at which he will have brief remarks.

Q. Who is he playing with?

Q. What time does he arrive at Pope?

MR. HUSHEN: I don't have the names yet.

Well, we will have a detailed schedule for you later today. It is a long day, and it has taken some time to get it together, but let me just give you this for your own guidance.

The press bus departs from the southwest gate for Andrews at 10:45 A.M. Press check-in is 11:15. The press plane will depart at 11:45. It is a one-hour flight.

I expect the President to return to Washington about midnight tomorrow, and the press plane will be in as soon thereafter as possible.

Q. If he leaves at 12:30, what time does he have lunch?

MR. HUSHEN: The lunch with the labor conference is at 11:45.

Q. Have you tried to find out who he will be paired with in the golf tournament?

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QUESTION: Mr. President, my question applies to a 1972 statement in which you said that an impediment to a regional peace settlement is an impediment to preserve the fiction that Jerusalem is not the capital of Israel. My question, sir, is would you, now that you set foreign policy, request that the Embassy be shifted from Tel Aviv to Jerusalem along with other national Embassies?

THE PRESIDENT: Under the current circumstance and the importance of getting a just and lasting peace in the Middle East, I think that particular proposal ought to stand aside. We must come up with some answers between Israel and the Arab nations in order to achieve a peace that is both fair and durable.

QUESTION: Mr. President, do you contemplate any changes in our policy with Cuba?

THE PRESIDENT: The policy that we have toward Cuba today is determined by the sanctions voted by the Organization of American States and we abide by those actions that were taken by the members of that organization.

Now if Cuba changes its policy toward us and toward its Latin neighbors, we, of course, would exercise the option depending on what the changes were to change our policy. But before we made any change, we would certainly act in concert with the other members of the Organization of American States.

QUESTION: Mr. President, you have emphasized here your option of granting a pardon to the former President.

THE PRESIDENT: I intend to.

QUESTION: You intend to have that option. If an indictment is brought, would you grant a pardon before any trial took place?

THE PRESIDENT: I said at the outset that until the matter reaches me, I am not going to make any comment during the process of whatever charges are made.

QUESTION: Mr. President, two questions related, how long will the transition last, in your opinion, and, secondly, how soon would it be proper and fair for Democrats on the campaign trial this fall to hold you accountable for the economic policy and the economic problems this country faces?

THE PRESIDENT: I can't judge what the Democrats are going to say about my policies. They have been very friendly so far and very cooperative. I think it is a fair statement that our problems domestically, our economic problems, are the joint responsibility of Government. As a matter of fact, I think the last poll indicated that most Americans felt that our difficulties were caused by Government action and that, of course, includes the President and the Democratic Congress. So we are all in this boat together with labor and management and everybody else. I don't think making partisan politics out of a serious domestic problem is good politics.

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QUESTION: Mr. President, in your fight against inflation, what, if anything, do you intend to do about the next Federal pay raise?

THE PRESIDENT: I have made no judgment on that yet, the recommendation has not come to my desk.

QUESTION: Mr. President, when do you expect the SALT talks to resume? Is there disagreement over our position in the Pentagon and the State Department and other agencies?

THE PRESIDENT: At the present time, there is an effort being made to bridge the Department of Defense, the State Department and any others together for a resolution of our, the United States position regarding SALT 2. This decision will be made in the relatively near future. I don't think there is any basic difficulty that cannot be resolved internally within our Government. I believe that Secretary Kissinger is going to be meeting with representatives from the Soviet Union in the near future, I think in October, if my memory is correct, and we, of course, will then proceed on a timetable to try and negotiate SALT 2. I think a properly negotiated effective strategic arms limitation agreement is in the best interests of ourselves, the Soviet Union and a stable international situation.

THE PRESS: Thank you, Mr. President.

END (AT 2:59 P.M. EDT)

And finally, we are announcing within the Press Office the appointment of Philip Warden, late of the Chicago Tribune, to be editor of the President's daily news summary. I am certain most of you probably knew Phil or know him well. He has been a part of the Washington scene for a long time.

He has covered Washington for seven Presidents, during the terms of seven Presidents. We have some biographical information which I think has been given to you.

Q Who does he replace, and how much money does he make?

MR. TER HORST: Can I get back to that in a minute? I don't want to miss some of the announcements, Helen.

Looking to the President's schedule next week, we have already announced that Israeli Prime Minister Rabin will be making an official visit to Washington. This is his first as Prime Minister. He will arrive in Washington on Tuesday, September 10, and will leave Washington on Friday, September 13.

He will be greeted by the President in an arrival ceremony on the South Lawn on Tuesday afternoon, followed by his first meeting with the President immediately thereafter.

The Prime Minister will have a second meeting with the President on Thursday morning, the 12th, and that evening the President and Mrs. Ford will host a formal dinner at the White House for Prime Minister Rabin. Mrs. Rabin will be accompanying the Prime Minister.

Q That is the night of the 12th?

MR. TER HORST: That is the night of the 12th for the State dinner, yes.

While in Washington, Prime Minister Rabin will also meet with Secretaries Kissinger, Schlesinger, and Simon.

This visit gives the President and the Prime Minister an opportunity again to review the Middle East situation following the discussions held here this summer with both Israeli and Arab representatives, and to discuss future progress toward a Middle East settlement.

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They will also have the chance to discuss bilateral matters between Israel and the United States in line with our long-standing and close relations between the two countries.

And, obviously, this is all within the framework of the elements of cooperation that were announced in Jerusalem in the joint statement that was issued on June 17.

Also this afternoon, regarding attendance at future inflation conferences, all agencies involved in these inflation conferences will make available for you, as of today, the names of those delegates who plan to attend the various respective conferences still to come before the major and overall conference on inflation.

As you know, we have posted the dates and locations for those so-called mini-summit meetings. We will have those lists here at the White House -- well, I hope within a matter of hours, or certainly by tomorrow. But in case it slips until Monday before we have all of them, they will be available here if you don't need them until then.

I think that is all the announcements I have. I am ready for questions.

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