The President's News Conference

THE PRESIDENT. Please sit down.

I have one short announcement. As you know, this is the day for President Diem to arrive here, and it will be truly a very great personal pleasure to greet him and talk to him. He is a staunch patriot and has showed great courage and statesmanship in the development of his country and government, with a very great respect for free institutions, so we will welcome him with real interest and enthusiasm.

Q. Marvin L. Arrowsmith, Associated Press: Mr. President, I have been requested to ask you a two-part question dealing with the Army's curtailed role in the guided missiles field.

The newspaper which submitted it, puts it this way: Why should not the Army extend its ballistic program to ranges of 1500 miles, to meet the requirements for tactical missile support; and, secondly, since this is such an important defense issue, do you think Colonel John Nickerson acted properly in making public the Air Force-Army controversy over the IRBM?

THE PRESIDENT. Well, of course, Mr. Arrowsmith, you are asking me questions that properly belong to the Defense Secretary, who is a little bit more familiar with details.

Now, we have in the Defense Department one man who is put in charge of all guided missile development. The reason for that is because of terrific expense in this activity. We want to prevent duplication, so far as is possible. These machines, the research even to get the first principles of them fixed and determined, are extremely costly, so we don't want each of the three services going its own way. We get a man in who is knowledgeable, particularly in this form of science, and he is made sort of the representative of the President and Secretary of Defense, to avoid that duplication.

Now, just why or when or for what reasons they assign any particular missile, any particular type to one service, is not always readily apparent; but I would say this, just from a knowledge of the Army: why would the Army want a 1500-mile missile itself, because the first requisite of using that kind of weapon is that you have very good observation to find out whether it is doing the job you thought it was. The only way you can find that out would be with an Air Force that could penetrate at least 1500 miles into the enemy territory, and that puts you right square into the big Air Force business. So I should think that that kind of consideration would have something to do with your question.

Now, as far as Colonel Nickerson is concerned, I have, of course, not looked up the details of all the complaints, but the complaint made to me was that he exposed to public view very secret papers of the Defense Department, and not that he argued publicly with the Air Force.

Q. Merriman Smith, United Press: Mr. President, there have been and continue to be increasing reports on some departures from your Cabinet, to the immediate point, Secretary of the Treasury Humphrey and Secretary of Defense Wilson.

First, sir, do you expect these two men to leave the Cabinet this year? Secretary Humphrey has been mentioned as getting out fairly soon. Can you tell us anything about that?

THE PRESIDENT. Well, I can tell you this without exposing any secrets, I think: for a long time certain of the men in the Cabinet have given to me very cogent, urgent reasons why they should leave. Specifically, Secretary Humphrey has had situations involving things in which he has been concerned for years that have been difficult to handle while he is in Government service. So, for two years he and I have had this up. Because of my great dependence on him, my great confidence in him, he has stayed this long due to my very strong personal requests. Just exactly how much longer he can stay, I don't know. But in no case has anyone submitted a formal request that he be excused from Government duty as of such-and-such a date.

Q. William McGaffin, Chicago Daily News: Sir, could you tell us how you interpret the Russian threats against nations that agree to accept nuclear arms from the United States, and whether these threats will have any bearing on our policy?

THE PRESIDENT. Well, I would say this: no, I wouldn't attempt to interpret and to give motives and meaning. I will say, though, that we try to develop policies that, from our viewpoint, will preserve the security of the free world and deter any war, any outbreak of hostilities, so that the threats themselves do not come into consideration as we develop those theories and these plans. These threats have been a part of Soviet activity, procedure and practice, for a long, long time, and so I think you couldn't possibly make your own plans just on that basis.

Q. David P. Sentner, Hearst Newspapers: Mr. President, will our future foreign aid program be affected--

THE PRESIDENT. The what?

Q. Mr. Sentner: Our future foreign aid program--

THE PRESIDENT. Yes?

Q. Mr. Sentner: --be affected by the European atomic pool plan just announced?

THE PRESIDENT. Well, I don't recall any specific way in which it would be affected. Of course, in that particular area we have supported EURATOM very earnestly, but there is not a very great deal of our aid now going to Europe except for the maintenance of military establishments; and EURATOM is not to develop weapons, so I would think that it would be only a slight result, if any.

Q. Edward P. Morgan, American Broadcasting Company: The subject of taxes, Mr. President. With the budget continuing to be punished hard, and the Administration continuing to look hard for revenue, I am wondering if you are considering tightening Administration policy on special tax privileges given to large companies.

For instance, do you endorse the position that Mr. Humphrey, Secretary Humphrey, took yesterday before Senator Byrd's committee approving the repeal of the law granting quick tax write-offs to companies except those engaged in direct military production; and, as a corollary, have you had time to speak to Mr. Humphrey regarding the question we brought up at your last press conference about the fact that some American companies doing business in the Middle East do not have to pay any American income tax?

THE PRESIDENT. Yes, I have talked about them both.

I thoroughly agree with the Secretary of the Treasury that, with certain specific exceptions, the authority for these rapid write-offs should be discontinued.

Now, I think that where the national security, our mobilization base, is affected, there is another story, and possibly in some very small businesses there might be another area, but in the general thing I believe that we have come to the point where we should curtail that very severely.

Now, with respect to companies doing business in other places and not paying taxes here, there is a provision in the law that states that the taxes paid by an American company doing business-and don't hold me to the exact specifications or wording of the law, but it is, in general, this: taxes paid by an American company in a foreign nation will be deducted from the taxes they pay here. When the tax equals that that they would have paid here for the actual business they do in that company, they pay no taxes because of that law.

This law--the first decisions were made in 1950 and the Bureau of Revenue has always held that this was a proper ruling in the case of the one you asked last week, which is Aramco, I believe--

Q. Mr. Morgan: Yes, sir.

THE PRESIDENT.--because the question there was, was the tax put by Arabia on Aramco merely an added royalty or was it an honest bona fide tax.

They have held, the Bureau of Revenue has held, that it is a bona fide tax, and therefore on that ruling those companies have paid no American tax on their operations in that region.

Q. John L. Steele, Time Magazine: The Russians at London have presented a new and limited version of the open sky plan involving an opening of the western half of the United States and at least an equal acreage of Communist controlled territory. Can you give us your thinking on that proposal?

THE PRESIDENT. Well, of course this, I think, is evidence that in this particular session of the Disarmament Committee, there is more honest and hard work being done than has been our experience in the past; but so far as the specific proposal itself is concerned, it will, of course, need very earnest study because it isn't merely acreage that is important when you are examining; it is what is within the particular areas delineated. So I think that I wouldn't want to talk about the proposal in its specific details until the studies have been completed which are now going on.

Q. Chalmers M. Roberts, Washington Post: Mr. President, on the disarmament question, Mr. Stassen proposed at London that future production of fissionable material be limited to peaceful uses. Would that proposal, if it were agreed upon and carried out, affect the American ability to make the so-called small nuclear weapons which seem to be becoming so important?

THE PRESIDENT. Well, if all new material went into non-weapon purposes, that is, peaceful purposes, we would expect to live very rigidly by the pledges we have made, and we would insist upon an inspectional system to make sure that everybody else did the same. So I would think that it would mean that there would be no more weapons produced at all.

Now, the only other possible outlet there could be where you might transform some of your older and bigger weapons into a number of small ones. I don't know whether that point has been covered or not.

Q. Sarah McClendon, El Paso Times: Mr. President, sir, (1) are you going to name Robert Anderson to be the next Secretary of the Treasury and (2) do you have an agreement with the new appointee to that job, whomever he may be, as to whether he will change monetary policy now and perhaps use his influence to bring about some lowering in interest rates?

THE PRESIDENT. Well, first of all, as you well know, my first announcement of any nominee is to the Senate of the United States, and not made public until that is done.

Secondly, I haven't gone far enough, in the selection of a possible successor, to talk about the questions you raise; and, thirdly, the monetary policy of this Government is mine, and no one underneath me is going to change my policy.

Q. Frank van der Linden, Nashville Banner: Mr. President, I have two questions about TVA. The first is: as you know, in ten days a vacancy arises on the Board of Directors, and there are reports on the Hill that you are considering Congressman Howard Baker of Tennessee; and the second is: the U. S. Chamber of Commerce yesterday came out against the proposal for the TVA to issue bonds and called instead for the sale of the TVA.

I wondered if you were considering Mr. Baker, and if you were favoring that bill.

THE PRESIDENT. I told you before, just a minute ago, that my nominee for that place will be sent to the Senate first. As far as this last statement by the Chamber of Commerce, that has often been made by very many people, and I suppose that, theoretically, you can make a very great case for it. I do not believe that, practically, it is feasible whatsoever, and I don't anticipate any action along that line whatsoever.

Q. Robert E. Clark, International News Service: Can you tell us when you plan to go on radio-TV to discuss your budget, and what you think of the continuing efforts on Capitol Hill to make deep budget cuts?

THE PRESIDENT. I can't tell you the exact date. I have been working on a talk for a very considerable time, and at one time I thought that everything I wanted to cover could be put into one talk, and I am getting very much afraid I shall have to go twice on the television.

Now, I have explained this budget time and again. We have been perfectly honest about it. Every item in a budget is, after all, in a sense, a prediction of what will be needed to carry out the necessities of Government and of the Nation and of the programs that have been included in the law. It is a prediction that has to extend, when you make the first estimates, more than a year and a half in the future, and these sums are stupendous.

Now, it would be odd, I should think, if the first guesses, or the first estimates, no matter how carefully we arranged them, we send to the Congress, would prove to be exactly accurate for the next eighteen months.

Moreover, you must remember that we have on the Hill people who, in some of these subcommittees, have been there literally for years. They have become quite expert in the functions for which they are responsible, the studies for which they are responsible to their whole legislative body.

Now, in their prying into all of the business of these various activities, I should think it would be strange if occasionally they didn't find some savings. But I have told you also that you cannot reduce this budget markedly except by cutting programs, either programs of services that the United States people, operating through the Congress, have stated that they wanted the Federal Government to perform, or you must go into the great programs that are designed for the protection of this country and for the waging of peace in the world.

Now, I want to make just one more observation about this budget. If you are going to cut the budget the way we want eventually to cut it, not by a small amount, 2 percent or something of that kind, just by eliminating a program here or there of minor importance, what we consider the least important, we have got to tackle this great thing of national defense.

You are not going to cut national defense markedly until you have eased tensions in the world, and the money we put into all of the foreign things we do the State Department, mutual security, technical aid, information service--that whole sum which is, after all, only a small portion of the budget, is put there to wage the peace so you can finally tackle the defense item and make cuts in the budget that this country really is looking forward to with great longing.

Now, that is not going to be done in a hurry, but we have got to aim at real cuts in this budget, and they are not going to be brought about--reasonable ones can be brought about if you will abandon domestic programs, but the big ones have got to make certain that the foreign situation has been eased very, very greatly before they can be made.

Q. John Herling, Editors Syndicate: Mr. President, this has to do with your program on unemployment compensation. In the last, your last four economic messages--

THE PRESIDENT. Yes.

Q. Mr. Herling: --you strongly urged that the States should improve their provisions for unemployment compensation as to amount and duration.

THE PRESIDENT. Yes.

Q. Mr. Herling: The Governor of Michigan, I understand, has wired you that he is trying to carry out your suggestion, but that he is being blocked by the Republican leadership in the State, and wants your help to overcome it.

Do you plan to get the Republicans in Michigan to come to the aid of your modern Republican position?

THE PRESIDENT. I haven't seen this wire yet, but the way you describe it, there is some suspicion that the meaning is not wholly within the words that are written.

Q. James B. Reston, New York Times: Going back to Mr. Steele's question, sir, when you were in Geneva, Sir Anthony Eden raised the question of the neutralized zone in East Germany and in West Germany with mutual inspection on both sides. Now, the Russians have just put out a large paper on that subject indicating new interest in it.

Would you give us your estimate of that, of the possibilities of using that to relieve tensions?

THE PRESIDENT. Well, at the time--and I am trusting here strictly to memory--this was brought up as sort of a test tube operation. There was going to be a certain area selected to see, through inspection, that everybody was carrying out his pledges and whether it could be extended to a greater area.

Now, each one of these, of course, when proposed has to be examined, as I mentioned a moment ago, with respect to the areas, the vital character or the critical character of the areas affected, and consequently even a small one is very difficult to get initiated.

But I personally believe that these things that we believe are absolutely necessary, that is, mutual inspection, are going to come about through some such evolutionary development that is envisioned in that kind of a proposal; and I believe that any time that we can get one that seems fair to both sides, we would entertain the idea very sympathetically and study it very earnestly.

Q. Richard L. Wilson, Cowles Publications: The impending resignation of Secretary Humphrey tends to coincide with a difference in emphasis between you and him on the matters of Government spending. Now, there are some people who think this represents a turning point in your Administration, that you are getting a little "New Dealish" and Secretary Humphrey, as a conservative, is leaving.

Would you care to discuss that point?

THE PRESIDENT. First of all, I told you there was no resignation impending. I said he has been trying to go for a long time, but there was no official resignation, letter of resignation before me from any member of the Cabinet.

Now, I do know that sooner or later Secretary Humphrey has to go. As far as the differences between him and me are concerned, that you have seen alleged or have heard alleged, why don't you ask him, because I am the one that has to make the decisions, and so far as I know, there is no difference whatsoever. In fact, the letter that he used as a base of his talk last January, at which he finally made the statement, under questioning, that under certain conditions you could have a depression, that letter he and I jointly prepared, and it was exactly what we meant.

Q. Rowland Evans, Jr., New York Herald Tribune: Mr. President, sir, all, or virtually all, your Republican leaders in the Senate and House have advocated cutting the budget far in excess of the maximum figure you sent in that letter to Speaker Rayburn.

I wondered, sir, with that as a premise, whether you feel the Republican leadership in Congress is giving your program and your budget the support you think it should have from them.

THE PRESIDENT. Well, what bill are you talking about? When you say "a program," it is a very large thing.

Q. Mr. Evans: I mean the total budget taken. They have put out, asked for a cut in the total budget in excess of $3 billion, as opposed to your $1.8 billion maximum.

THE PRESIDENT. I will put it this way. No one has come to me and recommended that, and I tell you again exactly what I told you before: if you are going to talk about that kind of a sum, you have got to pick programs or services that are going to be curtailed. You are not going to find that kind of money just in squeezing up on some administrative detail and thing of that kind. You have got to find the programs.

Q. Merriman Smith, United Press: Mr. President, can I get back for a moment to your saying your TV report to the people encompasses so many subjects that you might have to make two. Do you envision two nationwide appearances very dose together?

THE PRESIDENT. Oh, not very close together, no.

Q. Mr. Smith: How long, sir, would you say?

THE PRESIDENT. Oh, I wouldn't know; you are trying to pin me down here, and I don't know.

Q. Peter J. Kumpa, Baltimore Sun: Mr. President, an old defeated foe of yours, Mr. Adlai Stevenson, has expressed his willingness to serve in the Government if he is called upon, on a mission of peace. Have you ever considered calling on Mr. Stevenson, or do you foresee the possibility of a position for him in the Government, sir?

THE PRESIDENT. Two years ago we urged Mr. Stevenson--I guess it was three years ago--we urged Mr. Stevenson to take a post in the United States delegation to the United Nations.

Q. Mrs. May Craig, Portland (Maine) Press Herald: Mr. President, with all the distinguished visitors coming now, have you considered inviting President Rhee of the Republic of Korea, or President Chiang Kai-shek of the Republic of China to visit?

THE PRESIDENT. Of course, President Rhee has been here since I have been in office. President Chiang Kai-shek has not, his name hasn't come up recently, at least, and I don't recall that it has before.

Q. Robert G. Spivack, New York Post: Mr. President, returning to Mr. Morgan's question earlier about the special tax privileges to oil companies, do I understand your answer to mean that you favor changing the law in regard to these privileges and, two, Senator Byrd said the other day that he regarded the rapid tax write-off to the Idaho Power Company as sort of a raid of sorts on the Treasury. Do you agree with that?

THE PRESIDENT. Well, I don't know whether I agree with his statement. I do stand, though, on the statement I made awhile ago, that I believe that the time is past when it is to the advantage of the United States to grant these fast write-offs to these great corporations, except when the national security, the national welfare, is definitely involved, and whatever decision was made in this case by the responsible authority, the one in whom the law placed the authority, it was done, certainly, according to his understanding of the present law. And, as Secretary Humphrey has mentioned to me, some change in the law is necessary before his ideas and mine could be made.

Now, with respect to the foreign countries and taxes in foreign countries, there I would be more careful about giving an opinion, for the simple reason we do want private capital to invest abroad. Now, if it is taxed already as much as it would be here, I don't know whether I would want to levy another tax on them, except on their operations within the United States. They bring that product within the United States, and now get a profit on it here. Of course, they have, sir.

Q. Andrew F. Tully, Jr., Scripps-Howard: Sir, after your recent stay in Augusta, Dr. Snyder told us, or reported through Mr. Hagerty that it seemed to do you a world of good. Could you tell us how you are feeling these days?

THE PRESIDENT. Well, I think it did. I personally think for the kind of difficulty I had, that sun is the only answer, and I spent a good many hours just sitting out behind my house just absorbing sun. And I think it helped a lot, because I feel fine.

Q. Charles S. von Fremd, CBS News: You have been asked this question many times before, but the Russians again seem desirous of having another Summit meeting, and I wonder if you are even thinking of considering such a meeting, say, some time this year.

THE PRESIDENT. They haven't suggested it to us, but of course you would have to know what it is they propose to talk about, all of the other things, because, after all, let's not forget that Summit meetings do not comprise merely a nice little social gathering that you can disperse and nothing happens because it was just a nice, friendly meeting.

The world expects something, and you people by the hundreds go along and you demand news, and if you don't have any news, why, it looks not only futile but almost unwise to have such a meeting; so that I would say all of these meetings have to be carefully studied in advance before you have them.

Q. Charles S. Bartlett, Chattanooga Times: Mr. President, in going on television on these one or two broadcasts, will your primary purpose be to press your legislative program or to avert a split in the party? Do you see the possibility of such a split?

THE PRESIDENT. I have no thought about that at all. I am concerned that the American people know exactly what the budget is, how it was made, what it means, and what it means to cut it.

Now, I saw the other day where they staged a party in Boston protesting high taxes, but the Mayor of Boston joined a group of mayors who came down here only about ten days or two weeks ago, you recall, protesting bitterly because we cut the urban redevelopment item from $250 million to one hundred seventy five. You see, everybody is for cutting the budget for everybody else, but when he is affected, it is a little different story.

Q. Peter Lisagor, Chicago Daily News: Mr. President, discussing the question of American reporters going to China, Secretary Dulles said that he thought that freedom of press guarantee extended only to the publication of news and not to the gathering of news. I wonder if you can tell us whether you share that view.

THE PRESIDENT. Listen, if I am going to make a philosophical discussion on that point, I am going to take a little more time to study it.

Merriman Smith, United Press: Thank you, Mr. President.