Lyndon B. Johnson photo

The President's News Conference

July 31, 1968


THE PRESIDENT. [1.] The Bethlehem Steel Company this morning announced an across-the-board increase of almost 5 percent in steel mill products. If this action were followed by the rest of the steel industry, it would have dire economic consequences for our Nation:

--resulting in a price increase exceeding one-half billion dollars to the American consumer,

--setting back the efforts of all Americans to reverse the current inflationary trend and get back on the road to price stability,

--creating pressures for price increases across the whole range of products that are made out of steel,

--eroding our world competitive position and jeopardizing our balance of payments, and

--aggravating the steel industry's own problems in meeting competition from foreign producers and substitute materials.

Steel prices have been moving gradually upward on a selective basis. A general price increase has been wisely avoided. I stated last May, and I quote, "The relative stability of steel prices has been one of the key favorable factors in our recent price record, and it must be preserved."

The steel companies and the union reached a collective bargaining agreement yesterday. The terms of their settlement are high. That settlement will result in some increases in steel costs, but the announced Bethlehem price increase far exceeds any reasonable calculation of the cost of the wage settlement.

Steel is the Nation's basic industrial product and the industry's pricing decisions affect our entire economy. Inflation in steel is inflation for the Nation. American consumers are now threatened by a price increase that will take $600 million a year directly out of their pockets and pocketbooks and at the very time they are paying increased taxes as their contribution to the urgent task of restoring price stability.

According to the ticker this afternoon, Bethlehem Steel Company, with sales buoyed by second-quarter hedged buying against a strike that never came, today reported net profits of $93,400,000 for the first half of 1968, a 41 percent increase over last year's first half.

The Bethlehem price increase is unreason- able and just should not be permitted to stand. The public interest must be recognized by the entire steel industry in its price decisions at this critical time.

I spoke on this general subject to the Business Council, as some of you may remember, that met at Hot Springs back on May 11, 1968. I believe at the ranch on July 23, 1968, I had another statement to make on it for your reference.1

1 See Items 241 and 404.

The Cabinet Committee on Price Stability made reference to it in a release to you in July of 1968.

Those statements are available to you through the Press Office if you care to take them.


[2.] I have one additional statement that I would like to make and then I will be glad to have your questions on these or on any other subjects.

We are reserving the $91 million for impacted school aid that the Congress added to the second 1968 supplemental bill over and above our budget. These funds are in addition to those requested by the administration and they will add to 1969 budget expenditures.

Both the House and Senate have also added another $110 million to the fiscal 1969 request for impacted school aid.

Therefore, these two items will add $200 million to the 1969 budget over and above that requested. Faced with the requirement in the law to cut expenditures in the budget by $6 billion in fiscal 1969, I do not believe that it is good public policy to add another $200 million to that budget.

In other words, the Congress in one breath says you must cut $6 billion from your budget as you send it to Congress, and while doing that, we add another $200 million over and above that budget. That would make $6 billion 200 million we would have to cut out.

We knew that the anticipated relief expenditures for public welfare--public assistance expenditures--because of the action taken by the Ways and Means Committee by postponing for a year the legislation in that regard, will cost us probably $125 million more.

We know that the Supreme Court ruling, the "man-in-the-house" ruling, will probably cost another $75 million, making an additional $200 million there.

Because of the extra good weather and the bountiful harvest in wheat and other commodities, no human can guess, but we are anticipating the possibility that extra funds will be required for additional payments. It is not unlikely that we would have to cut $6 1/2 billion or close to $7 billion from the budget I proposed.

Therefore, I do not believe that we should add to that budget now in any way, where it can be avoided. There are 4,300 school districts involved in this matter, but there are 138 school districts which receive a substantial amount of their revenue from this source. These are school districts in which there are a large number of "A" students. An "A" student is the student whose parents work or live in a Government installation and, therefore, do not contribute to the local taxes.

Of the $91 million, only $22 million would go for "A" student entitlements, that is, where the parents live and work in Government installations and do not contribute to local taxes. Out of the $201 million for fiscal '68 and '69, approximately 25 percent, I am informed, would go to "A" students.

I would agree to the payment for the full entitlement for "A" students in fiscal 1968 and 1969 if Congress had decided in its wisdom that that was essential. This would add less than $50 million, instead of the $200 million, to the budget. I would hope this would relieve the real hardship cases. It is always difficult to reserve any money that has been appropriated.

I believe that the decision of the Congress to reduce $6 billion, and the decision in the Congress and the "man-in-the-house" decisions of the Court adding a couple of hundred million more on public assistance, and then the problem of $200 million here on education, and then the problem of $300 million or $400 million, maybe, on extra agricultural payments, would get you up to $700 million or $800 million, plus the $6 billion.

We are going to have to make those reduction adjustments. I think we should make the announcements now and inform the interested parties.

I will be glad to take any questions that you may have.



[3.] Q. Mr. President, have you or administration officials been in direct contact with Bethlehem Steel officials concerning your concern over the price increase?

THE PRESIDENT. We met with the Cabinet Committee on Price Stability this morning. They met and reviewed this very carefully and thoroughly. They made their recommendations to me in the form of a statement, most of which is incorporated in my statement.

During the lunch hour, about 3:30 or 4 o'clock, I met with the Secretary of the Treasury, Mr. Fowler, and my staff assistant, Mr. Califano.2 We explored the matter rather fully for perhaps an hour.

2 Joseph A. Califano, Jr., Special Assistant to the President.

I asked that various members of the Cabinet notify interested parties. I assume that has been done, or is being done, or will be done during the day. I have not checked it since I came back from lunch.


[4.] Q. Mr. President, I would like to ask a question about the Vietnam situation.

At the time of the enunciation of the so-called San Antonio formula,3 as I understand it, I believe that you said that the United States, in order to get the talks started, was willing to assume that while the discussions take place, the Communists would not take advantage of a halt to the bombing.

3 Stated by the President in an address before the National Legislative Conference at San Antonio, Texas, September 29, 1967. See 1967 volume, this series, Book II, Item 409.

Since that time, specifically in the Honolulu conference, President Thieu and yesterday Secretary of State Rusk, seemed to have changed the administration's position to one of requiring some kind of formal commitment by the Communists before we would agree to a halt to the bombing. Is there a change, indeed, in our position?

THE PRESIDENT. Mr. Pierpoint,4 I would think the key word in your question is "seem." It does not seem that way to President Thieu. It does not seem that way to Secretary Rusk. As Mr. Christian5 informed you yesterday, it does not seem that way to the President.

4 Robert C. Pierpoint of CBS News.

5George E. Christian, Special Assistant to the President.

We have no information that it seems that way to North Vietnam. I don't know how else to get at it. You no doubt are aware that they have rejected the San Antonio formula. Since then we have had the March 31st speech6 which made additional proposals and which brought us to the conference table in Paris. Those negotiations are now going on there.

6 See Item 170.

There has been no change. Nothing Secretary Rusk said yesterday changes our position. The facts are very clear to those who have the information on them.

The number of North Vietnamese soldiers now entering South Vietnam at the end of the Ho Chi Minh trail is now greater than at any other time in this war. We estimated that 30,000 or more North Vietnamese soldiers entered South Vietnam in July. We estimate that even more, Mr. Pierpoint, will come in August.

I have an unclassified portion of a report today that gives some insight into what our men, fighting for our freedom there, are confronted with.

"North Vietnam's efforts to expand and diversify its military and logistic capabilities continue unabated."

These are not assuming things. These are facts.

"All indicators of traffic movement are at high levels with observed water traffic activity reaching record levels.

"Flight activity south of the 20th parallel has increased during recent weeks and days. More than 1,200 small watercraft were sighted south of the 19th parallel--four times the weekly average observed since April of 1968.

"Truck sightings were 25 percent above the weekly average since April 1. Pilot reports of trucks destroyed--40 percent above the average; although rear service traffic has decreased somewhat, the total traffic for the month of July will probably be three times greater than that detected during the month of March."

To give you an illustration, the week of 15-21 July, we sighted 947 trucks as compared to the weekly average of 717 in April. That gives you some insight into what we can assume and what we know.

In March, the short-term tons per day traffic was 107 tons. In April it was 215. In May it was 238. In June it was 274. In the first 19 days of July it was 320.

In North Vietnam itself, the movement of troops and war south appears to he down from the all-time high of recent months but is more than twice as high as the 1967 average.

Now our bombing activity in the very restricted area that we placed upon it on March 31st results in our damaging many of these trucks that are headed south on the infiltration routes.

That means to all of you that many of the enemy soldiers who are being sent south never have a chance to shoot an American soldier. They don't get there. It means a great deal of ammunition that is carried in those trucks is not available to them to unload on your boys there. It means that many of the bullets and the rockets and the shells being sent south are destroyed and never get fired.

We have every reason to believe in a cable this morning from our commanders which indicates that the enemy is preparing a massive attack on our forces and those of our allies.

That is the lesson that we draw from infiltration that is taking place. That is what the captured prisoners tell us that their plans are and their orders are and their instructions are.

That is what we learned from the documents that we take from those prisoners when they give dates, times, and places. That is the apparent purpose of the huge arms caches that we have discovered and that we are daily destroying. That is what we are told from other forms of various secret intelligence that we have.

That is the unanimous judgment of your best military leaders in that area. That is the assessment of our allies with whom we have just conferred.

I met with Secretary Bundy 7 last night at some length after he had paid visits to some of our allies.

7 William P. Bundy, Assistant Secretary of State for East Asian and Pacific Affairs.

There is, therefore, evidence that a massive enemy effort is underway to reequip--the President has this evidence where he can see it--and to retrain for massive attacks upon South Vietnam and particularly on certain specified major cities.

We were hopeful on March 31st, and we are still hopeful, that the substantial act of restraint against the enemy that we took would be matched by some similar acts of restraint on their part. But the regroupings and rebuilding of thousands of men and deployment grounds a few miles from Saigon, the launching of 100-odd rockets on Danang the other day, just last week, the activity that we encounter and that we observe, makes us discouraged, and we would hope that the enemy offensive which seems imminent could be aborted.

I cannot ignore this evidence. I cannot order the cessation of further unilateral acts of bombing of the infiltration routes--that are headed toward our men--which are crowded today with men and war materials that the enemy needs. I cannot just step aside and leave our men in the lurch.

Everyone, I think, is dear on one thing: We are prepared to halt the bombing when we feel confident that the halt in the bombing will not lead to the loss of heavy American and allied casualties. More than that I cannot do, and more than that you should not have me do.


[5.] Q. Mr. President, I wonder if I could go back to the steel statement for just a moment.


Q. You seem to be asking for a voluntary rollback on the part of Bethlehem Steel in their price increase. Are there any instruments you have that could compel them, because of the nature of this, to roll back the prices?

THE PRESIDENT. We are, of course, very hopeful that the other steel companies will not join this parade. We urge them and reason with them, and counsel with them and plead with them not to do so.

If they do not do so, we hope the competitive factors would, as they have in the past, bring about a readjustment on the action that the Bethlehem Company has taken.

Q. Mr. President, in your opening statement, sir, you mentioned only Bethlehem Steel. I believe that U.S.. Steel has also taken an increase which is higher in percentage, although more limited in scope. Do you mean to include them in your comments about Bethlehem Steel also, sir?

THE PRESIDENT. We were not talking about the selective increases that individual companies have made gradually upward. We were talking about the general price increase across the board of almost 5 percent in the steel mill products.

We naturally hope that all prices can be carefully studied and any unnecessary and absolutely unessential increases can be avoided, because it is of just as much interest to the companies involved in maintaining their world competitive position and trying to reverse the inflationary trend as it is yours and mine.

The ones that are particularly disturbing are the general price increases such as Bethlehem made. Our people--the Secretary of Commerce, Mr. Smith; the Secretary of Defense; the Secretary of the Treasury; and the Secretary of Labor--are all very concerned about this particular action.


[6.] Q. Mr. President, in your judgment, do you think the National Liberation Front could ever be taken in as a group, into the political process of life in South Vietnam?

THE PRESIDENT. We have covered this time and time again. I have asked Mr. Christian to give you all my statements on that question.

We have said that the National Liberation Front, in our judgment is a pure Communist front for Hanoi. The evidence indicates that, although there is great effort in the Front to conceal their real purpose and identity.

We have said that Hanoi would find no difficulty in getting their views, as they do all the time, and have them reflected in any discussions or any exchanges. They would have no difficulty in making their position known in conference.


[7.] Q. Mr. President, in 1962, during the steel crisis of that year, there was some talk or discussion of the possibility of cutting off defense orders to the steel companies that had raised prices. Do you envisage any necessity for that at this time in the case of Bethlehem?

THE PRESIDENT. I haven't studied the 1962 action. I wasn't heavily involved in that. We have gone no further than what we thought would be the wise and prudent course that is envisaged in this statement today.

We will be talking to the companies and hoping that they will see the national interest involved here and the problem that confronts the Nation in this critical period. We will try to do the best and hope that that appeal will be considered and that, to the extent that they can, they will comply with it.


[8.] Q. Mr. President, there have been reports that the Paris peace talks are in danger of breaking down. Do you feel that that is a possibility; and if this attack that you expect does materialize in South Vietnam, would that have any bearing on the peace talks?

THE PRESIDENT. We continue to hope for the best in the peace talks. So many of our people have encouraged me to believe that if we would take some act of deescalation, we might meet with a response from the other side. I have taken that action. I want to give them all the time necessary to consider it and talk to their allies about it.

There is always the chance that we will have to act promptly on additional military measures if the enemy puts our men in danger. We are not invading North Vietnam. We have exercised great restraint by removing from the limits of attack 90 percent of their population and almost 80 percent of their area.

We are hoping that that will be recognized and, in fact, acted upon by them. I cannot anticipate the full extent of all of their actions-military and diplomatic--but if a major offensive does occur, our commanders believe that we are in a position to deal with it and they will be prepared to do so.8

8On August 1 the President met at the White House with William J. Jordan, a member of the United States delegation at the Paris peace negotiations. After the meeting the White House Press Office released the following statement:

The President met for a half hour this morning with William J. Jorden, member of the U.S.. delegation at the peace negotiations in Paris.

Mr. Jorden reviewed for the President the current state of the Paris talks, including the various constructive proposals that have been made by the U.S.. delegation to move the conversations in the direction of a resolution of the Vietnam war. He also described the consistent refusal of the North Vietnamese delegation to enter into serious discussion of any proposals, except their demand that all bombing of the North be ended.

The President expressed his earnest desire for an early and honorable end to the fighting. He told Mr. Jorden that the world had called upon the United States to exercise restraint in Vietnam. In response, he had taken a major and unilateral step toward peace on March 31 by ending the bombing of military targets in nearly 80 percent of North Vietnam, an area where about 90 percent of the people of the North live. The President now hoped that the world would call on North Vietnam to show similar restraint. He regretted that such restraint had not yet been undertaken.

The President expressed his sincere hope that the North Vietnamese representatives in Paris would soon join with the American delegation in serious consideration of meaningful measures to bring the fighting in Vietnam to an end.


[9.] Q. Mr. President, can you give us any assessment of the missile disarmament talks, how dose they seem to be? Are you encouraged at this point?

THE PRESIDENT. We have exchanged views a number of times over recent years about the importance of those talks. The first month of the first year that I was in the Presidency, I expressed myself rather fully concerning such matters as nonproliferation and offensive and defensive weapons, disarmament, and so forth.

We have been quite hopeful--at least I have been--that we could bring a satisfactory conclusion to the nonproliferation treaty,9 certainly, during this term, this administration.

9 See Item 349.

We also wanted very much to have talks at some level to start on offensive and defensive weapons. We went into that in considerable detail at Glassboro10 --periodically and often since--as often as very recently.

10For items related to the meetings of the President and Aleksei N. Kosygin, Chairman of the Council of Ministers of the U.S.S.R., at Glassboro, N.J., see 1967 volume, this series, Book I, Items 279, 280, 282, and 283.

We believe, on the basis of the information we have, barring any unforeseen emergency or development, that in a matter of a reasonably short time we should be able to have an agreement on the place and the dates to start and plan for those talks.

I know of nothing that I have dealt with in my almost 5 years as President that I believe to be as important as--there is nothing I am determined to succeed on as much as this, if it is at all possible. I cannot speak for the other side. But our side is ready, willing, and waiting.


[10.] Q. Mr. President, here in the District, the Black United Front is demanding community control of the police precincts and the Democratic chairman,11 has called for the resignation of Police Chief [John B.] Layton and appointment of a Negro in his place. What is your attitude toward such demands?

THE PRESIDENT. I am not informed on the demands. I regard Chief Layton very highly. I think that we deal a great deal of unnecessary abuse upon the people who protect our homes and our lives. That frequently happens in the case of the criticism--some of it unjustified--that we apply to our public officials, particularly our police officials.

11 Bruce Terris, chairman of the Democratic Central Committee in the District of Columbia.

We all make mistakes. We all err at times. In retrospect, we can improve on what we have done. But I think our police should be supported when they are right.

I know of no justification for the removal of Chief Layton. It is not up to the President to select him or to remove him. When he was selected, I had hoped that the Commissioners could review all of the men available to the Nation and select the most outstanding chief for the assignment in the District. I indicated that to the Commissioners.

The Commissioners acted, though, before they notified me. Chief Layton was selected without my knowledge or without any evaluation here. That was proper that that be done, although I had hoped that we could concentrate on a thorough search of the Nation and get the best. I think they felt they did. I am not in possession of any facts that would indicate that the demands that you have referred to--which I have not studied--are justified.


[11.] Q. Mr. President, I wonder if I could ask you to comment on the situation regarding your appointments to the Supreme Court, Abe Fortas and Homer Thornberry.12

12The nominations of Associate Justice Abe Fortas as Chief Justice and of Judge Homer Thornberry as an Associate Justice of the U.S.. Supreme Court were announced by the President in his news conference of June 26, 1968 (see Item 339). For later statements by the President concerning the nominations, see Items 509, 527.

Are you discouraged with the proceedings in the Senate and the treatment that has been accorded Mr. Fortas so far by the Senate Judiciary Committee?

THE PRESIDENT. I don't know that I can improve the situation by any comments that I would make. I certainly don't want to inflame it any.

The first knowledge that I had that the Chief Justice, who was appointed when he was Republican Governor of California by President Eisenhower, desired to retire was when he asked for an appointment and came in and told me he desired to retire. I asked him to reconsider.

I tried to prevail upon him as earnestly as I could and as persuasively as I could to continue, because I thought he was in good health and he said he was.

I did not have in mind any person to appoint as his successor in the last days of the Senate which I thought then would be going home early. We discussed it at some length, but he was very firm.

I expressed the hope that he would think it over and he told me no, that he would be sending me a letter later that day; that there would be two letters, a letter of resignation at my pleasure, and the other, the detailed reasons for his resignation.

Those letters came in,13 and I still hoped that he would give some thought to it and reconsider it. I respectfully submitted the letters to the legal authorities in the Department of Justice who handle appointment matters and check those things.

13The two letters from Chief Justice Earl Warren, and his own letter in reply, were read by the President at his news conference of June 26, 1968 (see Item 339).

I asked for a list of possible successors. We had many, many conferences for days, even after it had leaked out and some of you were asking questions about when the resignation would be announced and accepted.

Extended discussion took place between the President and his advisers in the Department of Justice and some of the other members of the Cabinet. I believe that we all hoped that the Chief Justice would stay, but since he would not stay, it was discussed whether the President should put a new man on the Court or promote a man from the Court to that position.

After I heard the various viewpoints, I concluded that we should promote someone from within the Court. We looked over the various members of the Court. A list was made up. The first name on that list submitted to me was the man I nominated as Chief Justice. His name was submitted to the Bar Association and they were asked to examine it and comment on it and give us their reaction.

They arranged for some kind of a consultation with, I am told, some 10 or 12 outstanding lawyers from the American Bar Association from different regions covering the entire United States.

We waited for that consultation. Following that, the Attorney General informed me that the man who was at the head of the list submitted to me had been found by all the American Bar Association members in all regions of the country to be, I believe he said, "highly qualified." You can read the language.

We then looked at the California Circuit and Texas Circuit because of the vacancy left by Justice [Tom C.] Clark and because of the vacancy left by Justice Warren.

We looked at the experience. The Fifth Circuit (Texas) was a busy circuit. The California Circuit was also a busy circuit. I do not know a great many lawyers personally in either circuit. I considered several, though, on both circuits, as did the Attorney General.

I talked to several Members of the Senate about these men, including the leaders of various groups--Democratic groups, Republican groups, and other groups, young groups and older groups--and I submitted several names to them that I had under consideration for the Court posts.

After talking to them, I concluded that, in the words of Mr. Christopher,14 "It is a very rare thing to find a man with the unusual qualifications of our Associate Justice, Justice Thornberry."

14 Warren Christopher, Deputy Attorney General.

He had been a law enforcement officer for several years. He had been a mayor pro tem of a city for several years. He had been a member of a State legislature for several years. He had been a prosecuting attorney trying cases every day in the courtroom for some time. He had been a Member of Congress for 15 years. He is the only man now on the Court, if he is confirmed, to have ever served both on the trial court and the appellate court.

The members of the American Bar Association and the Senate had repeatedly recommended, I believe, that we promote judges to the Supreme Court from the appellate courts or the district trial courts. In this case, Judge Thornberry had served at both the city hall level, the State level, and the congressional level. There is only one other man now on the Court who has had legislative experience, and that is Justice [Hugo L.] Black.

After talking to the leaders of Congress, I submitted Judge Thornberry's name to the American Bar Association committee for the United States Supreme Court appointments. They had consultation on Justice Thornberry and representatives of the 12 regions all over the country found him "highly qualified."

I did not anticipate that there would be any opposition because both of these men had been confirmed twice previously by the Senate--Justice Fortas as Under Secretary of the Interior Department, and as Associate Justice just 2 or 3 years before, and Judge Thornberry as a district trial court judge and as a circuit court judge.

But while we were getting these clearances, there was a statement made by a group of Republican Senators who said that no appointment should be made because of this being an election year.

I analyzed that and asked for comment on that statement. I don't believe that many Senators felt that the President should refuse to send two names to the Senate for action on two Supreme Court appointments for 6 or 7 months, or that I should play that I was not President for that period.

As a matter of fact, just a few days before, some of the Senators who have since objected were recommending that I appoint their own judges and some are recommending that I appoint them now, and we will be sending some of their judges up as soon as the American Bar Association gives clearance.

So it is a matter for the Senate. I have no doubt that these two men, both of whom have been promoted from the bench, are qualified. I have no doubt but what a very substantial majority in the Senate believes them to be qualified.

Some men who said they will vote against them believe they are qualified and said they would vote for them next January if another President named them.

What the Senate decides is a matter for them. I have made my decision and promoted two good men.

Robert C. Pierpoint, CBS News: Thank you, Mr. President.

Note: President Johnson's one hundred and twentyninth news conference was held in the Cabinet Room at the White House at 4:43 p.m. on Wednesday, July 31, 1968.

Lyndon B. Johnson, The President's News Conference Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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