Department of State bulletin

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THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN PO.

I

THE

DEPARTMENT

OF

STATE

Bulletin

Vol. LVIII, No. 1488

January 1, 1968

WORLD TRADE AND FINANCE AND U.S. PROSPERITY
Address l)y President Johnson 6

THE FUTURE WORK PROGRAM OF GATT

Statement hy William M. Roth, Special Representati/ve for Trade Negotiations 13

UNITED STATES URGES RENEWED DEDICATION
TO U.N. PEACE AND SECURITY ACTIVITIES

Statement hy Congressman L. H. Fountain
in the U.N. Special Political Committee 20

1967— A PROGRESS REPORT
Address hy Secretary Rusk 1

For index see inside hack cover

1

I

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII No. 1488
January 1, 1968

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The BULLETIN includes selected
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BOSTON PUBLIC LIWARY

1967— A Progrress Report

Address ty Secretary Bush ^

^r. yc\-, ifitf?

It is a privilege to address this great organi-
zation which rejH-esents the management of so
mucli of the tremendous productive capacity of
the United States. In Wasliington we are keenly
aware that both the living standards of our peo-
ple and our security as a nation depend crucial-
ly on American industry.

I think that the most useful thing I can do
on this occasion is to review some of the inter-
national developments of 1967. This has been
a year of considerable pam and violence. I don't
need to call the unhappy events to your atten-
tion— the news media have reported them hour
by hour.

But 1967 has also been another kind of year :
one of constructive developments, some of them
momentous, others highly promising.

These include :

—The successful conclusion of the Kennedy
Eound negotiations, the most far-reaching as-
sault ever made on barriers to international
trade.

—Adoption by tlie International Monetary
Fund of a plan for special drawing rights, an
important step toward assuring adequate mone-
tary reserves to support continuing expansion
of international trade.

—The IMF loan to Britain in connection
with the devaluation of sterlmg; and the gold
pool, through which leading Western Powers
helped to maintain orderly markets for gold
and foreig-n exchange following sterlino-
devaluation. "^

—Agreement by the Presidents of the Latin
American Republics to move toward economic
integration in the next decade, one of the most

'Made before the National Association of Manufac-
turers at New York, N.Y., on Dec. 6 (press release 281).

unportant collective decisions our friends to the
south have ever made.

—Modernization of the Charter of the Or-
ganization of American States.

—An agreement on the principles of tempo-
rary tariff advantages for developing countries,
reached by the 21 members of the Or-
ganization for Economic Cooperation and
Development.

—Agreement on the principles of an Interna-
tional Cocoa Agreement.

—The other 14 members of NATO dealt suc-
cessfully with the problems arising from the
French withdrawal :

a. We and our allies met the French request
to close all foreign military installations in
France by April 1. SHAPE and other key mili-
tary headquarters were efficiently transferred to
new sites in Belgium, the Netherlands, and
Germany.

b. The North Atlantic Council and the Mili-
tary Committee were located m Brussels in
October.

—NATO made significant advances in
planning :

a. The Fourteen agreed on a new strategic
concept which incorporates a flexible response
and thus better reflects a policy of credible de-
terrence, the current threat, and Allied
capabilities.

b. Two new bodies were established to ct or-
dinate nuclear planning within NATO.

c. The NATO Defense Planning Committee
completed work on an agreed force plan for
1968-72, a plan which we expect will be adopted
at the NATO ministerial meeting next week.

d. We and our allies examined some basic
questions about the North Atlantic alliance.

JAJiUART 1 1968

particularly future political tasks, including
relations with the Soviet Union and Eastern
Europe.

—The threat of war between Greece and
Turkey over Cyprus was relieved, with the
help of mediation by the Secretary General o±
NATO, a representative of the Secretary-Gen-
eral of the United Nations, and a personal repre-
sentative of our President. T. I n • A
—The war in the Near East was halted in 4
days without the intervention of great powers.
—An agreement on the Yemen was reached
between Saudi Arabia and the Umted Arab
Eepublic after 5 years of strife which threat-
ened to embroil them and other nations m war.
—Voices of moderation gained ascendancy
in the councils of the Organization for African

—The African Development Bank made its

first loan. . i • i

—There was further progress m subregional
cooperation in Africa— for example, by the cre-
ation of the new East African Commimity.

—Castro's efforts to promote guerrilla war-
fare and subversion in the Western Hemi-
sphere suffered sharp reverses m Bolivia, Vene-
zuela, and elsewhere.

—The space treaty was ratified and went mto
effect— bringing under a regime of law the
marvelous enterprises of man m reaching out
from his eartHy home, attempting to assure
that these activities will be peaceful and not
become a deadly threat to the human race.

—The Soviet Union and the United States
made substantial progress toward an agreed
draft of a nonproliferation treaty.

—In our bilateral relations with the Soviet
Union :

a. We ratified the Consular Convention; the
Soviet Union has not yet done so. _

b Prooress was made in arranging tor tlie
inauguration of commercial air service be-
tween Moscow and New York.

c. Agreement was reached on new embassy
sites in Moscow and Wasliington.

- -We made some progress in improving re-
lations with a few of the smaller East Euro-
pean nations. ,
—A major Water for Peace Conference, held
in Washington, gave new impetus to impor-
tant cooperative imdertakings which cut across
ideological and national frontiers to serve
fundamental needs of man as man.

—The war on hunger gained momentum as
various developing nations became more
sharply aware that they must greatly intensity
their efforts to increase food production and
must also come to grips with the population
side of the equation. .

—The Chamizal agreement between Mexico
and the United States approved changes m
boundaries, thus ending a century-old dispute.
—Our economic aid program to Iran
was terminated because, after 15 years, it had
achieved its goal: to help Iran to attain seit-
sustaining growth. Indeed, the econoinic and
social progress of Iran under the Shah's "white
revolution" is one of the great success stories o±
our time.

Building a Structure of Peace

I have cited more than 25 important con-
structive developments in 1967. And I have not
yet mentioned any in East Asia and the Pacifac.
I'll come to those in a moment.

But first I would emphasize that these prom-
ising developments were only a part of what
was accomplished during 1967 to further the
interests and security of the United States, to
facilitate the affairs of mankind which require
international arrangements, and to build a
prosperous, stable, and peaceful world.

We participate in more than 50 international
institutions and programs. We belong to sev-
eral reo-ional associations and institutions. We
have more than 40 allies. During 1967 we took
part in some 600 multilateral international con-
ferences concerned with promotmg economic,
social, and cultural cooperation. Durmg the
year we signed new international agreements
dealing with such diverse subjects as atomic
eneroy, telecommunications, aviation, avoid-
ance^of double taxation, investment guarantees,
claims, fisheries, defense, cultural exchanges,
and the Peace Corps. During the year the
Senate has given its advice and consent to 25
treaties, including amendments to the Satety
of Life at Sea Convention, which provide tor
better fire protection of ships, and a conven-
tion consolidating and strengthening nine
existing treaties regarding narcotic drugs.

Constructive tasks— most of them li^le no-
ticed in the general news— comprise the bulk ot
the work of ^the Department of State. They ac-
count for the great majority of the 1,000 tele-
grams we receive daily and the equal number
we send out and for most of the much larger

DEPARTMENT OF STATE BULLETIN

volume of official communications that go by
mail.

Bit by bit, we are building a structure of
peace. That is our goal : a lasthig peace that is
safe for ourselves and all others who believe
in freedom.

Indeed, the consequences of another great
war would be so catastrophic that the first ques-
tion that we must ask about everything that
we do or consider in the intei'national ai'ena is :
Will it contribute to, or diminish, the prospects
of achieving a lasting peace ?

The Pacific and East Asia

I turn now to major developments of 1967 in
the Pacific and East Asia.

Naturally, our attention has been centered on
Viet-Nam. But there were important develop-
ments elsewhere in East Asia and the Pacific.
These included :

— Political, economic, and social progress in
most of the non-Communist countries — in some,
with dramatic speed.

— Further easmg of some longstanding inter-
national tensions: for example, between Indo-
nesia and its neighbors and between Japan and
the Kepublic of Korea.

— Further advances m regional and subre-
gional cooperation.

— Further strengthening of our relations
with all but one of the non-Communist nations
of the area.

— Contmuing difficulties within Conununist
China.

- — Rising confidence m the future in the non-
Communist nations.

That the new Japan has made remarkable
economic progress is well known. But I doubt
that its full dimensions are widely realized.

In 17 years Japan's gross national product
has grown from $11 billion to more than $100
billion — which is more than that of Communist
China, with more than seven times Japan's
population. At present relative rates of growth,
Japan will soon be third in the world in GNP,
trailing only the United States and the Soviet
Union.

In 1950 per capita income in Japan was $113.
In 1960 it was $360. This year it is tentatively
estimated at $818.

The economic growth of Japan has had a
major impact on our trade. In 1960 our trade
with Japan amounted to $2.5 billion; in 1966

it was nearly $5.5 billion. Japan has become our
largest customer for agricultural products. Its
economic growth has also enabled it to enlarge
its assistance to developing nations. Last year
this assistance amounted to about $550 million ;
and increasingly we find Japan matching our
contributions to major aid programs in Asia.

It is especially gratifying that Japan's rise to
new heights of productivity has been achieved
by peaceful means under democratic institu-
tions and a system of free enterprise. The rise
of this thriving democracy from the ashes of
the Second World War is a triumph for the in-
telligence and industriousness of the Japanese
people and for their "wise choice of leaders. It
also reflects some fundamental decisions by the
United States — first of all, the decision to seek
a peace of reconciliation, made by President
Truman in 1950 and canied out in its initial
stages by two of my distinguished predecessors.
Dean Acheson and John Foster Dulles.

The policy of reconciliation and cooperation
has been carried forward imder Presidents
Eisenhower, Kennedy, and Johnson. Our work-
ing relations with Japan have been steadily
strengthened and broadened. This year the
Joint Cabinet Committee of our two nations
held its sixth meeting. And the distmguished
Prime Minister of Japan, Eisaku Sato, has just
paid us another visit. We are proud to have the
great Japanese democracy as a friend and a
partner on a basis of equality and mutual
respect.

Economic Progress

Looking at some of the other non-Com-
munist countries in East Asia and the Pacific,
we see :

The Republic of Korea — another success
.story. After growing at about 5 percent an-
nually over most of the decade, its GNP rose
by over 8 percent annually for 2 years and by
12 percent last year. Since 1963 a rise in indus-
trial production of 43 percent, and in exports
from $87 million to $250 million.

The Eepublic of Korea has not forgotten
that when it was the victim of a Communist
aggression, the United States and other free-
world countries sent militaiy forces to assist it.
It is now a major contributor to the security of
free Asia. Its troops stand shoulder to shoulder
with ours on the north Asian rampart of the
free world. And it has sent to South Viet-Nam
two Army divisions and a Marine brigade

JANUARY 1, 1968

49,000 superb troops. As President Park has
said Korea "knows how to requite an obliga-
tion'" And, as he has said also, it is fightmg in
Viet-Nam "because m our belief any aggression
a-ainst the Eepublic of Viet-Nam represented
a'direct and grave menace against the security
and peace of Free Asia and, therefore, directly
jeopardized the very security and freedom ot
our own people."

The Re'fmblic of China: Since 1956 its agri-
cultural sector, although already highly de-
veloped, has increased by about 4.5 percent
annually ; while its industrial production has in-
creased by an average of 12 percent a year and
its exports by an average of 17 percent In 1965,
on the judgment that the economy of laiwan
had attained self-sustaining growth, we ter-
minated our 15-year-old economic aid program.
More and more observers from other countries
are going to Taiwan to learn how its remark-
able advances have been achieved. And it is
now providing technical assistance to 23 devel-
oping countries in Asia, Africa, and Latm
America. Its own progress contrasts sharply
with mainland China, where the standard ot
living has declined over the past decade.

The Revublic of the Philippi'ms: 1 he
arowth rate eased off in the early 1960's, but the
Marcos administration is making noteworthy
progress with a program concentrating on rice
production and roadbuildmg.

New rice strains are coming into use. ihey
were developed at the International ^ice E«-
search Institute at Los Banos, organized m 1960
bv the Ford and Rockefeller Foundations m
cooperation with the Government of the Philip-
pines. These new strains, combined with new
teclmiques, including proper use of fertilizers
and pesticides, are increasing production

dramatically. i j . +1, „„

The Philippines has responded to tne re-
quest for help from the Republic of Viet-Nam
by sending a 2,000-man military engmeermg
unit and other assistance.

Thailand— ?in annual economic growth rate
of more than 8 percent; exports up from ^477
million in 1961 to $688 million m 1966.

Politically, Thailand is moving toward adop-
tion of a new constitution to be followed by
elections. Its diplomatic leadership has made
Bangkok a major center of regional mterna-
tional activity.

Thailand is a major contributor also to the
military security of Southeast Asia. Several
American air units engaged in the war m Viet-

Nam are based in Thailand. Thai mihtary and
police forces are dealing energetically with an
organized campaign of subversion and ter-
rorism directed from Hanoi and Peking, both
of which have operated schools for trammg
Communist Thai since 1962 or earlier. Thai-
land has also sent combat forces to Viet-Nam:
a regiment, 2,600 men, in addition to some air
and naval personnel. And it has announced that
it will send 10,000 more combat troops.

Malaysia^ivom 1961 to 1966, a gam of 39
percent in GNP. It has the third highest per
capita income in East Asia (approximately

^^^Singapore-^ rise in GNP from $707 million
in 1960 to $949 million in 1965 (latest available
figures), an increase of 34 percent. Its per ca-
pita income, $520, is second only to Japan m

East Asia.

Both Malaysia and Singapore are tunction-
ing democracies. And both have been makmg
large investments in education, public housmg,
rural and industrial development, and social
services, with noteworthy rises m literacy and
health standards. , . -i.

Laos— the non-Communist part has kept its
economy going and made progress despite ob-
structions and military harassments by the
Communists. Construction of the first major
Mekong Valley project-the Nam Ngiun Dam
is now^beginning through combined efforts o±
several organizations and nations, mcludmg
the United States.

l7idonesia— long strides since thwarting the
Commimist coup in October 1965. The slide into
economic chaos of the late Sukarno years has
been arrested, the budget rationalized, the infla-
tion rate reduced, debts rescheduled. Incentives
have been given for exports, various foreign
properties returned to owners, foreign invest-
ment invited. Thus, with courage and tenacity,
the present government of Indonesia has laid
the groundwork for sound development m the
world's fifth or sixth most populous nation—
and potentially a very prosperous nation

Aiistralia and Neio Zealand^^dv&nced coun-
tries by any test. Australia is enjoying rapid
economic growth. Both Australia and New Zea-
land are assuming growing roles m the East
Asian and Pacific community. Both have mili-
tary contingents in Viet-Nam. And we look to
them to take on greater responsibilities when
the British withdraw from Malaysia and Singa-
pore sometime in the 1970's.
RepuUic of Yiet-Nain-m2i]ov progress smce

DEPAKTMENT OF STATE BTJLLETIN

the summer of 1965 — dramatic on the military
side, and politically in adopting a Constitu-
tion and holding free elections. Also significant
gains for much of the civilian population in edu-
cation, health, roads, agriculture, and curbs on
inflation.

Confidence in the Future

This remarkable economic and social progress
of most of the non-Communist nations of East
Asia and the "Western Pacific reflects political
stability and confidence in the future. That sta-
bility and that confidence stem from the convic-
tion in these countries that they are going to
have the chance to develop in their own way
under governments of their own choice. And
that conviction is rooted in two developments :
the internal failures of Communist China and
the firm stand against aggression which we and
our allies have taken in Viet-Nam. The non-
Communist governments of East Asia know that
commiuiism is not the wave of the future. Most
of them know that, economically and socially,
they can far outstrip the Asian Communist
states. And they know that the militant leaders
of Peking and their disciples will not be per-
mitted to destroy and take over their non-Com-
munist neighbors in that part of the world.

During 1967, the free nations of East Asia
and the Pacific also continued to make notable
progress in regional cooperation :

— -Tlie Asian Development Bank began op-
erating and announced its willingness to admm-
ister a special fund for agricultural
development.

—Indonesia joined four of its neighbors in
the _ new Association of Southeast Asian
Nations.

—The Asian and Pacific Council (ASPAC),
consisting of nine members and one observer,
held its second annual ministerial conference.

—Older regional organizations continued to
function constructively.

If anyone doubts that our stand in Viet-Nam
has been a major contribution to these highly

favorable developments over a vast area, let
him go there and talk with responsible govern-
ment officials.

I cannot tell you how much longer it may
take to achieve peace in Viet-Nam. Wlienever
anyone can produce anybody willing and able
to discuss peace on behalf of Hanoi, I shall be
there within hours. Meanwhile, the situation in
South Viet-Nam is not a stalemate. And what
has been done by the splendid Americans who
are there has already yielded dividends of his-
toric significance. Behind the shield which we
have helped to provide, a new Asia is arising.

U.S. Extends Sympathy on Death
of President Gestido of Uruguay

Statement l>y President Johnson

White House press release dated December 6

In the death of President Oscar Gestido,
Uruguay has lost its great leader, and the hem-
isphere a distinguished statesman.

His long record of public service to his coim-
try earned him a special place in the hearts of
his fellow citizens. In the hours of fundamental
change in the structure of the Uruguayan Gov-
ermnent, they turned to him to direct their
destinies.

Those of us who had the privilege to work
with liim at the Meeting of Presidents at Punta
del Este last April appreciated the way he con-
ducted that historic conference. His leadership
helped to assure its success as a milestone in
inter- American relations.

On behalf of the United States Government
and people I extend deepest sympathy to the
family of the late President and the Uruguayan
nation.

At the same time I express my best wishes to
President Jorge Pacheco Areco for success in
carrying forward the objectives which he and
President Gestido shared.

JANUARY 1, 1968

World Trade and Finance and U.S. Prosperity

Address hy President Johnson ^

If we wanted to celebrate the triumphs of our
economy tonight, we would have cause enough.
We are now in the 82d month of the American
economic miracle. This sustained prosperity is
unparalleled in our history.

But it is not celebration which summons us.
We are here, rather, to look at the other side of
the ledger— to assess some of the challenges that
now threaten our prosperity.

America's role in world trade and finance is
crucial to our prosperity and that of ail fi"ee
nations.

World trade has quadrupled since World War
II. We have helped to create that trade — and
we have shared fully in its benefits.

In the world network of trade, Ainerica's role
is doubly important. Our dollar stands at its
center — the medium of exchange for most inter-
national transactions.

The recent devaluation of the British pound —
with the tremors of uncertainty it stirred —
makes it even more imperative that we maintain
confidence in the dollar. In the wake of devalua-
tion, we witnessed a I'emarkable display of inter-
national financial cooperation. A speculative
attack on the system was decisively repelled.

It was repelled because we stood firmly behind
our pledge — which I reaffirm today — to convert
the dollar to gold at $35 an ounce.

It was repelled because the leading govern-
ments of the Western World joined with us in
that successful defense, at a relatively small cost
in reserves.

But we cannot rest on this victory. We must

look ahead. As world trade expands, so must the
liquidity required to finance it. That liquidity
need not rest on the uncertainties of gold
production, consumption, and speculation. Nor
can its supply be the responsibility of any one
country.

So, even as we reaffirm our pledge to keep our
dollar strong — and every ounce of our gold
stock stands behind that pledge — we must look
beyond gold.

We will press the case for other reserves
wliich can strengthen the international
monetary system of tomorrow. We are joined
with other nations in this venture. Already we
have laid out a blueprint. The agreement
reached at the International Monetary Fund
meeting in Eio = is a first important step. It
pomts the way to the creation of supjilementary
reserves backed by the full faith and credit of
the participating nations.

Balance of Payments

A healthy balance of payments is essential to
a sound dollar.

After a decade of deficits, our balance-of-pay-
ments problem still challenges the best efforts
of government and business.

In recent years we have made some very real
progress. But we find some of that progress off-
set by the cost of our defense efforts in South-
east Asia and by events surrounding the
devaluation of the pound.

This calls for special effort — by both govem-

" Made before the Business Council at Washington,
D.C., on Dec. 6 (White House press release).

' For background, see Bttlxetin of Oct. 23, 1967, p.
523.

DEPARTMENT OF STATE BULLETIN

ment and business — to press even harder for
progress.

Our investments in defense and foreign aid
are vital to tlie security of every American. But,
for our part in government, we are reducing to
the barest mininuim the drain of these essential
activities on our balance of payments.

Business, too, has responded to the challenge.
In the voluntary balance-of -payments program,
we have seen one of the finest examples of co-
operative effort with government. Many firms
have helped to reduce tlie deficit. They have bor-
rowed funds overseas to finance foreign invest-
ments rather than borrow here and exjDort our
dollars abroad. Others have chosen to defer or
scale down their investments.

We ask for even greater voluntary coopera-
tion in 1968.

Before j'our dollars flow abroad to another
industrial nation, ask yourself: Is this for an
essential project ? If it is, why can't you finance
it overeeas?

I know that borrowing overseas may cost an
extra point or so in interest. But it is a necessary
investment. It will strengthen the economy in
which we all have a share.

Expanding Our Exports

The best way to strengthen our balance of
payments is to expand our exports.

"We used to talk of the world market in terms
of billions of dollars— and more recently
hundreds of billions. Now the economists tell
us those measures no longer suffice. The size of
the economy outside the United States today
exceeds $1 trillion.

American business has only begun to fight for
this market. I hope you will take this message
back to the board rooms of America : Get going
on exports.

We in government have helped you to
promote and finance your sales to other markets
abroad. We hope to do even more in the future.

But I ask business to remember this : Trade
must be a two-way street. Trade must be a fair
and competitive race.

You cannot win tliis race confined by the
quotas or high tariff walls the protectionists
demand. Those walls have always been barriers
to profits. You will win the race with time-
tested American business methods: efficiency,
better products, lower costs and prices.

Even though we know that a key to balance
of payments is to export more, we also know
this : If our prices rise faster than those of our
overseas competitors, our exports will suffer and
our imports will grow.

A growing export surplus demands that we
maintain a higher degree of price stability than
our competitors. We have done that over the
past 7 years.

Responsibility of Business and Labor

The challenge to business and labor is no less
compelling than the challenge to government.

We know that wage and price changes are
inevitable — and desirable — in a free enterprise
system. But those changes must be restrained
by a recognition of the fundamental national
interest in maintaining a stable level of overall
prices.

If strong labor unions insist on a wage rise
twice the nationwide increase in output per
man-hour — even where there is no real labor
shortage — we are bound to have rising prices.

If members of an industry attempt to raise
prices and profit margins — even when they
clearly have excess capacity — we are bound to
have rising prices.

Nobody benefits from a wage-i^rice spiral.
Labor knows that it does not. You know that
business does not. And surely the American
people do not.

Yet business says it is labor's responsibility
to break the spiral, and labor says it is yours.
I say it is everyone's responsibility. It is the
responsibility of govermnent, of labor, and of
business.

I intend to urge labor to restrain its demands
for excessive wage increases.

I am urging business tonight to refrain from
avoidable price increases and to intensify its
competitive efforts.

To both I say : It is your economy — your jobs
and profits we need to protect. It is your dollar
whose strength we must maintain.

For the first time, America is fighting for
freedom abroad without resorting to wage and
price controls at home.

"Voluntary restraint has made involuntary
curbs unnecessary.

This is the way it should be done. This is the
way it can be done — if business and labor meet
their responsibilities.

JANU.\KY 1, 1968

The Contours of Change
in the Home Hemisphere

l>y Covey T. Oliver'^

In 1961, with the signing of the Charter of
Punta del Este, the member nations of the Alli-
ance for Progress formally dedicated them-
selves to replace fear with hope. We promised
to work together to reform old habits of societal
neglect. The Latin American countries would
reform the structures of societies that had hand-
somely benefited the few without giving oppor-
tunities for a decent life to the great majority.
All peoples of this hemisphere would be enlisted
in this common task to achieve development. We
would help, not only with tecluiical assistance
but also with ideas and money.

The promise of Punta del Este has touched all
our lives in some way. I am sure many of you
have taken active roles, either through your
business or your church or in "people-to-people
programs," to help in some part of this develop-
ment eifort. Some of you may have sons or
daughters working in the Peace Corps or as
AID or foundation men in the remote high
Andes or rain forest hinterlands. And all of
us, subject to the will of our elected representa-
tives while in office, help a little with our taxes,
the taxes that are the price — not too dear — -that
we pay for civilization.

But, as is natural, the impact of the Alliance
is felt much more strongly in Latin America.
There both wise men and humble people sense it
may be the last best hope against chaos, violence,
the herd state. There ordinary villagers come
alive with ideas and energy when they begin
to see that they can, often with very little help
other than from the concept of self-help itself,
do things themselves to improve their village
lives, such as building a schoolroom or piping
good water down from the mountain. There
brilliant, dedicated — but still too few — young
administrators go at the challenges of modern-
izing government agencies and business enter-
prises. There the promise of better gains from
greater consumer purchasmg power spurs en-
trepreneurs, many of these rising in status to

broaden the middle class. There men of innate
scholarly bent begin to hope that they may
sometime expect to be paid enough to be full-
time teachers in vivid contact with students
and to add by research to the world's body of
knowledge.

There is in our home hemisphere a new pride
and a new hope for a better future. New leaders
have come forward, dedicated to development
and with vision and political courage second to
none. They were among the Presidents at Punta
del Este last April who pledged themselves and
their nations to even greater efforts and greater
sacrifices to hasten and intensify the develop-
ment process. These leadei-s have promised their
peoples that change would be achieved by due
process of law and without recourse to tyranny.
Your Government supports such leadership.
As President Jolinson once said : ^

... we are on the side of those who want constitu-
tional governments. We are not on the side of those
who say that dictatorships are necessary for eflScient
economic development or as a bulwark against com-
munism.

But in human affairs change is never without
its tramuas for some. Wise and humane govern-
ments recognize that it is not always easy for
men to adapt, that frequently politics must in-
clude doses of social therapy. We call this lead-
ership. There is only one kind of government
that treats change in these ways and provides
for adjustments when mistakes are made. It is
a democratic government. Think about this
point: How many totalitarian governments
have permitted any significant variations from
the dictator's original premises? And of the
very few authoritarian regimes that have, at
what cost?

But I have no time here to deal with the old-
fashioned, highly privileged few who have
narrowly and selfishly set themselves against
the whole idea of the Alliance because to them
it is "radical" or "communistic." Like the
dinosaurs, they have gone — or at least are going,
fast. They vanish because they are not intel-
ligent enough socially to survive in modernizing
societies.

A far more important challenge of change is
to those literate, privileged, intelligent people
in Latin America who consider themselves in-
dividually to be modern, who generally support

^ Excerpt from an address made at New Orleans, La.,
on Dec. 7 upon accepting the Thomas F. Cunningham
award (for full test, .see press relea.=e 285), Mr. Oliver
is Assistant Secretary for Inter-American Affairs,

- For an address by President Johnson made at
Denver, Colo., on Aug, 26, 1966, see Bulletin of Sept.
19, 1966, p. 406.

DEPARTMENT OF STATE BTJLLETIN

the goals of the Alliance, either from idealism
or from fear of the alternative, but who are
afraid that they will be required to carry a
greater share of the development burden or that
their societies simply cannot achieve effective
change. Tliis type of person should be no
stranger to those of us who have lived politics
in this comitry over the last 40 years. But just
as we of that age are not always well understood
by our affluent youth of today, the Latin Ameri-
cans I am talking about here do not find much
toleration from the impatient, poor young in
Latin America. Demographically, Latin Ameri-
cans are very young. This observation presents
a related second challenge : that of the urgency
of change.

Now, we in this country have gone through
many periods of massive change : the depression,
the war years, and various technological revo-
lutions. We not only have grown to accept the
temporary disequilibrium brought by change,
we ahuost seem to regard it as the very stuff of
survival. We are inclined to forget that in coun-
tries that have not changed enough for centuries,
change is psychologically difficult.

It is in this area that we in government need
your help.

We who work in the Alliance every day have
tried to foresee the dislocations and temporary
inequalities — the personal sacrifices — that are
and will be required if our hemisphere is to
succeed in its grand design for progress. We
have made plans, whenever possible, to soften
the individual blows that some sectors must
suffer. But you and I know that there can be
no panacea for all traumas of change.

The people of New Orleans and Louisiana
have always played a imique role in the history
of this country's relations with Latin America.
Thousands of Latin Americans come here every
year to trade their goods, to enjoy your city, to
use your fine medical centers, or to study in
your schools and universities. The beauty of
this city has done much to counter the wide-
spread belief in the countries to the south that
we are a materialistic and uncouth people. You
are one of our great cultural bridges.

With your traditional ties of friendship and
understanding, you can do much to imbue j-our
Latin American friends and acquaintances with
your own belief in the Alliance and to offer them
the benefit of your own experiences m meeting
the demands of a rapidly changing world.

Many of you have had to face and resolve the

problems inherent in our changing society. Wliat
was your experience? How did you do it? What
were some of the bad effects you could have
avoided and which might be avoided by those
in Latin America who, for the first time, may
face sunilar problems ?

Some of you have had invaluable experience
as to world trade and the European Economic
Community. How much of what you learned
there can be applied in Latin America as that
common market comes into being ?

Others of you have gone through the throes
of modernization required by the changing
markets and changing tastes in our own coun-
try. How did you meet tliis challenge?

Improving relations between the Latin
American private sector and Latin American
education is just one of the areas in which you
have much to offer. It is axiomatic in this coun-
try that private citizens such as Thomas F.
Cunningham take an active and leading role to
insure that our schools produce the trained
manpower needed by our society. Our relatively
new schools of business, economics, and public
administration are examples of how our educa-
tional systems change to meet our changing
needs. In law, so vital to democratic society, our
great law schools, including those of Tulane and
LSU, have been in the forefront of change. And
I wish to recall that the Tulane Law School has
long led in our legal associations with Latin
America. American business has contributed
much to the founding of such schools. Some of
you have donated scholarships in fields partic-
ularly important to your work.

And this is only one example of the work
private citizens such as you can do so much
better than we in government. We can help
identify the needs. You can do much to generate
the imaginative answers to them. You all have
experience and knowledge which neither we nor
the governments of Latin America can buy. We
depend on your good will and dynamism to
make this experience available. I ask all of you
to make the extra effort — to go to your counter-
part in the hemisphere not as teacher to pupil
iDut rather as fellow businessman, fellow
teacher, or fellow church leader to identify the
problem and, fi'om your experience, suggest a
solution or open a dialog.

We are all in this together — not because the
Alliance Charter or the Presidents' Declaration
say we should be, but because we have recog-
nized that our well-being depends on the well-

JANUART 1. 1968

being of our neighbors; that if they suffer, so,
sooner or later, shall we. Or in Secretary [of De-
fense Eobert S.] McNamara's words : "Security
is development. Without development, there
can be no security." ^

Twenty-six years ago today, we suffered the
bitter consequences of isolationism. Isolationism
was blind tradition, fear, even selfishness and
cynicism. In our home hemisphere, especially
in the past 6 years, we have done much to make
certain that another kind of Pearl Harbor does
not take place in our doorstep. We have already
given the lie to those whose loyalties are to dic-
tatorial political systems alien to this hemi-
sphere and our common tradition of liberty. We
have shown here that great changes can be
achieved without recourse to violence and ty-
ramiy. We have begun a true revolution in peace.
We must jealously guard what we have gained
as we work together for even more rapid
progress.

And, with your help, ladies and gentlemen,
we and other like-minded peoples in the home
hemisphere will prevail — prevail for peace, for
justice, for social virtue.

Mexican-U.S. Trade Committee
Holds Third Meeting

Joint Commmriiqibe

Press release 290 dated December 9

The Joint Mexican-United States Trade
Committee held its third annual meeting from
December 6 to 8, 1967, in Washington to discuss
matters related to U.S.-Mexican trade. The
Delegation of Mexico was headed by His Ex-
cellency Hugo Margain, the Mexican Ambas-
sador to the United States, and the United
States Delegation by Mr. Joseph A. Greenwald,
Deputy Assistant Secretary of State for Inter-
national Trade Policy. Previous meetings of
the Committee have been held alternately in
Mexico City and Washmgton.^

This Committee provides a fonun for the
regular exchange of views between the two gov-

' For an address by Secretary McNamara made at
Montreal, Canada, on May IS, 1966, see xbiA., June 6,
1966.

^ For texts of communiques issued at the close of
the meetings, see Bulletin of Nov. 8, 1965, p. 738,
and Jan. 9, 1967, p. 70.

ernments on trade issues and other matters
closely related to trade between Mexico and
the United States.

This year's meeting, as in previous years, was
held in an atmosphere characterized by cor-
diality and frankness. The United States Dele-
gation informed the Mexican Delegation of the
benefits which would accrue to Mexico from
U.S. trade concessions in the Kemiedy Round
of tariff negotiations. The Mexican Delegation
told the U.S. Delegation that during the past
year the Mexican Government had created over
one thousand new sub-items in the Mexican
tariff schedule on which tariff charges were
reduced, most of these being of interest to U.S.
exporters.

The two delegations reviewed recent trade
performance, particularly over the past year,
and discussed several factors influencing trade
flows, including trade barriers. Suggestions
were made on both sides respecting measures
which might be taken to remove or reduce the
impact of these barriers upon trade. The dele-
gations agreed to keep these matters under
close review over the forthcoming year and to
continue their search for mutually beneficial
solutions to the problems identified. They also
agreed to develop further information in cer-
tain areas of agi-iculture production.

The Committee recommended expanded
programs of trade promotion on the part of
both countries designed to identify new trade
potentials in both markets. It was noted that
exchanges of trade missions composed of busi-
nessmen from each country would be an es-
pecially valuable means of accomplishing this
end.

Among other matters related to trade, the
Committee discussed the Mexican progi-ams re-
lated to industrialization of the border areas.
In this coimection, it was agreed that the two
delegations would recommend to their govern-
ments the fullest possible exchange of informa-
tioia on the progress of the programs and their
economic and social effects on both sides of the
border.

The two delegations agreed that it would be
useful to exchange mutual visits by experts to
supplement the normal diplomatic channels by
wliich tlie two governments follow up on mat-
ters discussed at the annual meetings.

It was agreed that the next meeting would
take place in Mexico City during the fall of
1968.

10

DEPARTMENT OF STATE BULLETIN

U.S. and Philippines Begin Talks
on Future Economic Relations

Statement by Eugene M. Braderman ^

The talks that we are beginning here today
mark another major milestone in the evolving
relationship between the United States and the
Philippines.

The Philippine and U.S. teams have been
charged by our Presidents with the task of iden-
tifying the concepts which should underlie a
new instrument to replace the Laurel -Langley
Trade Agreement - after its scheduled expira-
tion in 1074.

I am delighted to participate in this endeavor
for many reasons. First, because it is always a
source of satisfaction to be engaged in an im-
portant and constnictive task. But there are
additional personal reasons for my pleasure in
undertaking this assignment.

I have been interested in and concerned with
U.S.-Philippine relations for more than 17
years. I first visited your country in 1951 and
have been back many times. I have many friends
here. I served as a member of the U.S. delega-
tion that negotiated the Laurel-Langley Ti-ade
Agreement and remember with gratitude the
warm reception I received from President
Magsaysay and the other members of the Philip-
pine community on that occasion. I traveled to
all parts of your country in 1960 as head of the
first U.S. trade and development mission to visit
the Philippines. Most recently, I was here as a
participant in the Philippine- American Assem-
bly that met in Davao. I hope you will pardon
these personal references, but I cannot be with
you without expressing the warmth and, I can
assure you, the understanding with which I ap-
proach our forthcoming discussions.

The subject of economic relations between the
Republic of the Philippines and the United
States of America is, in our judgment, one of
major importance and one which has many ram-
ifications. Some are fairly clear, and others are
involved and complex. That is why, in their

'Made at the first joint meeting of the U.S. and
Philippine teams to discuss future economic relations
held at Manila on Nov. 20 (press release 266 dated
Nov. 18). Mr. Braderman, who is Deputy Assistant
Secretary for Commercial Affairs and Business Activ-
ities, is chairman of the U.S. team.

' For text, see Bulletin of Sept. 19, 1955, p. 467.

wisdom, our Presidents suggested an early be-
ginning of intergovermnental discussions.

This beginning which is taking place today in
your great Capital City of Manila will give us
the opportunity to exchange views on the whole
range of issues that govern our economic rela-
tions. Following this exchange of views we will
have a better idea of the concepts which should
underlie oiu* economic relationships in the
future. We may find that our views are so
much alike that we will be able to recommend to
our Governments the early negotiation of a new
agreement. Or we may wish to reflect more fully
on the ideas and concepts that we have ex-
changed and decide to hold further discussions
at a later date. One thing is clear : We must have
a true and genuine meeting of the minds if we
are to develop a solid base for the negotiation of
treaty arrangements to govern our future
economic relations.

It is our considered view that the Laurel-
Langley Trade Agreement has been of mutual
benefit to both the Philippines and the United
States. For botli coiuitries it offered opportuni-
ties for trade and for investment — opportunities
which were utilized in some instances and
ignored in others.

On the trade side, the 20-year period between
1954 and 1974, during wliich there were to be
declining preferential tariff rates and duty-free
quotas, was meant to provide a reasonable
period in which trade adjustments could be
made. Both the U.S. and Philippine delegations
were agreed on this point when the agreement
was negotiated in 1954.

Tlie trade preferences pro\aded by that agree-
ment are not in fact equal. They are actually
unequal in favor of the Philippines. Special con-
cessions were made by the United States because
of its friendship for the Philippines and its
recognition at the time that as a developing
country, Philippine exports might require
larger preferences for a longer period than
would U.S. exports. Wliile U.S. exports to the
Philippines have declined because of the more
rapid reduction in preferences on U.S. articles,
Philippine exports to the United States have
increased substantially.

During the negotiation of the Laurel-Langley
Agreement, it was stated many times that the
Philippines would use the 20 years until 1974
to diversify its exports both by product and by
market. The facts indicate that thus far there
have been appreciable increases in trade with

JANUARY 1, 1968

11

Japan and the European Economic Community,
and to a lesser extent with other areas, but there
has been little product diversification.

In tliis connection, we have noted with interest
the announcement made last month by President
Marcos that the Philippines will renew its ef-
forts to promote Pliilippine exports.

I believe you are all aware that the United
States has supported a worldwide liberal trade
policy based on the principle of most-favored-
nation treatment. The preferential trading ar-
rangement with the Philippines was an excep-
tion. In April of this year at Punta del Este,
President Jolmson indicated that we had been
examining the kind of trade initiatives that the
United States should propose in the years
ahead.^ He noted our conviction that future
trade policy must pay special attention to the
needs of the developing comitries. Since com-
parable tariff treatment may not always permit
developing countries to advance as rapidly as
desired, our President suggested that temporary
tariff advantages for all developing countries
by all industrialized countries might be one way
to deal with this.

As promised by President Jolmson at Punta
del Este, the United States has been exploring
this idea with other industrialized comitries
and we hope to have a proposal to put forward
at the second United Nations Conference on
Trade and Development, which will be held at
New Delhi next February. We look forward to
discussing these trade concepts with you.

The pro\'isions in the Laurel-Langley Agree-
ment governing investment relations between
our two countries were designed to benefit both
the Philippines and the United States. The op-
portunities provided Filipinos in the United
States are the same as those provided Americans
in the Philippines. While we recognize the equal
legal status of citizen investors of both coun-
tries, we are all well aware that this equality
does not necessarily lead to equal utilization of
investment opportunities. This is simply because

" For background, see ibid., May 8, 1967, p. 706.

capital availabilities in the United States are
much greater than those in the Philippines —
and U.S. capital has been invested not only at
home but also in countries around the world
where it is welcomed. Wliile some Philippine
capital has been invested overseas, your Govern-
ment has recognized that the great bulk of it
has been needed at home for the development
of the Pliilippine economy.

Because of tliis differing use of investment
opportunities, the subject of investment has de-
veloped strong nationalistic overtones in the
Philippines. This is not true in the United
States, where the welcome mat is out for foreign
capital.

For us, this has been a continuing policy. As
a young nation we actively sought foreign in-
vestment, aware of the significant contribution
that it could make to our economic development.
Today, we and most other developed coimtries
still seek to attract foreign investment, recog-
nizing that new investments, whatever their
source, are important to continued growth. In
whatever stage of development a nation may be,
the development process never ceases. In this
sense we are all developing countries.

In this part of the world, countries in vary-
ing stages of development, such as Australia, the
Republic of China, the Republic of Korea,
Singapore, and Thailand, are all actively bid-
ding for foreign investment.

The economic development goals that you set
for the Philippmes are for you to determine,
just as my country's goals will be determined
by our citizens. We are eager to learn from the
Philippine team as much as possible about your
investment goals, how they will be met, and the
role you wish foreign investment capital to play
in your economic develojDment effort.

We welcome this opportunity to discuss and
explore together the many facets of our eco-
nomic relationships. We are certain that these
discussions can lead only in one direction : to
increased understanding which will further
solidify a friendly and enduring relationship
between our two countries.

12

DEPARTMENT OP STATE BULLETIN

The Future Work Program of GATT

Statement &y WilHam M. Both

Special Representative for Trade Negotiations ^

Five months after the completion of the
Kennedy Koimd, it seems strange to be here in
Geneva again discussing our mutual problems
in trade. But perhaps it is not so strange when
we appreciate the twofold nature of our i^il-
grunage. We are here first to celebrate the past
and secondly to map the future.

The past is the expanding flow of trade
throughout the world under the aegis of the
GATT. The past is a series of trade negotiations
which has immeasurably reduced the barriers
to world commerce. But above all else, the past
is the leadership of Eric Wyndham White, the
Director General of this great institution.

A great deal has already been said both in this
room and others about the achievements and
contributions of the Director General. Let me
add as simply and shortly that I would like to
record the deep gratitude of the United States
Government to Eric Wyndham "White for all
that he has done both for our country and for
the world over the period of his devoted service.
Let me say on a personal basis — as many of my
colleagues here could do as well — that without
his firm hand, his intuitive sense of timing, and
his magical compromises, the Kennedy Eound
in those last desperate days and hours could have
failed — and failed miserably.

So much for the past. The Director General
would be the first, I believe, to say, Leave off
praising our history, let us discuss the present
and more pai-ticularly the future — both im-
mediate and in the longer run. GATT after all
should be the place to work. What, therefore, is
our future ?

First, we must take all practical measures to

' Made before the special ministerial meeting at the
24th session of the Contracting Parties to the General
Agreement on Tariffs and Trade at Geneva on Nov. 23.

implement fully the results of the Kennedy
Roxmd.^ In this respect I can report that the
United States administration intends, within
the near future, to send the American Selling
Price package to the Congress for its considera-
tion. We have now signed the International
Grains Arrangement and are this week readying
that for consideration by the United States
Senate.

On July 1 we expect to implement new regu-
lations consonant with the recently negotiated
antidiunping code. Finally, this coming Janu-
ary 1, we expect to imj^lement the first stage of
the Kennedy Eound concessions and to imple-
ment without staging concessions on a number
of products of interest to the developing
countries.

It is essential that all our negotiating partners
also move ahead to full implementation as
rapidly as possible.

But there is another aspect to implementation
— the negative side. This is the need for all con-
tractmg parties firmly to resist the internal
pressures each of us face for restrictive trade
measures. These pressures exist in the United
States, as you know full well ; but it is, as I hope
you also know, the firm policy of the President
and his administration to oppose these efforts
strenuously, firmly, and continually. As you
probably have noted in the press within recent
weeks, enlightened and influential industrial
and agricultural groups are already mobilizing
strongly in support of our position. But I would
mislead you if I did not acknowledge that we
shall continue to face a difficult period in coming
months and indeed throughout 1968.

I am convinced that we can win this battle

' For a summary of the Kennedy Round agreements,
see Bulletin of July 24, 1967, p. 95.

JANUARY 1, 1968

13

for expanding world trade. We believe that the
American people will not permit the destruction
of a trade policy which has benefited them so
well for so many years. But we are not alone in
facing such internal pressures. Protectionism is
endemic in all countries. All governments must
be equally firm in resisting the demands of
special interests. The trade of my country has
suffered in recent months from restrictive de-
vices in other countries. Trade protectionism,
like many sicknesses, is highly contagious.

Now for the longer future : We all recognize,
I believe, that no major country is prepared so
shortly after the Kennedy Round to embark on
a major trade initiative. Neither do we believe,
however, that we can cease the pursuit of ex-
panding world commerce. In my covmtry, there-
fore, we have already initiated a trade policy
study to gain better understanding of the
remaining problems we face. Others are un-
doubtedly doing the same. Our work in the
GATT in the months ahead accordingly should
be directed toward complementing and phasing
together these individual national efforts. We
need a live and active forum in which our in-
dividual trade concerns can be examined in their
global context.

The questions we all must study are varied
and complex. Let me mention a few. First : non-
tariff barriers. As tariffs are reduced, these
barriers take on an increasing significance.
Indeed, they are already a matter of sharp
cxjncern to most of us.

We think the first need is for an inventory
of these restrictions. We do not yet have suffi-
cient understanding of their scope, their sig-
nificance, and their intricate workings. But a
useful examination will require positive effort
by all nations, because many of these restric-
tions relate to basic national policies and prac-
tices. "Wlien tliis inventory is complete, the
Contracting Parties should analyze their trade
effects and examine various possible negotiat-
ing teclmiques which might be applied to
them. In the United States preparation of such
an inventory is already underway.

Agriculture is another area of major and in-
creasing concern to us. It is vridely recognized
that trade liberalization in agriculture has
lagged behind that in industry and that the
problems we face are complex and have deep
social and political content. In most countries
farm incomes are only half tliose received by
workers in other economic sectors. To boost in-
comes, governments intervene with price and

income support policies, and this in turn has a
serious impact on trade. We know it will not be
easy to deal with problems involving sensitive
elements of national policy. Nevertheless, they
must be tackled. We therefore support the idea
of establishing an agriculture committee.

But there are also immediate and specific
problems before us. The Governments of New
Zealand, Australia, and Denmark have men-
tioned one of them ; ^ and there are others as
well. These critical matters pose a challenge
which the GATT camiot ignore. We must find
new ways and perhaps more flexible means of
dealing with them as they occur. But I also be-
lieve that solutions to individual problems must
be sought in the light of our longer range goals.

In placing the emphasis I have on nontarifl
barriers and on agriculture, I do not mean to
imply that import duties on industrial products
are no longer a problem. That is definitely not
the case. There are still many products on which
tariffs are serious obstacles to trade. Before the
next step forward, we must analyze the level
and structure of tariffs which will remain after
the Kennedy Round. But we shall also explore
new techniques with energy and imagination, in-
cluding the possibility of dismantling tariff and
other trade barriers within individual indus-
trial sectors on a worldwide basis.

Another serious problem area is the relation-
ship of coimtervailing duties and subsidies. The
United States has already raised this question
in the plenary under agenda item 16. At that
time, we emphasized that it was essential to
undertake a broad-ranging examination of all
aids to exports along with countervailing
duties, since one could not be considered in iso-
lation from the other. We are very much con-
cerned about the consequences of conflicting
policies and practices in this area, both in agri-
culture and industry. This broad and complex
area of fiscal adjustment is filled with danger
for all of us where practices conflict. If order
is to be brought into this field, we must have a
clear idea of the nature and effects of these
rapidly expanding practices, their relation to
one another and to the rules by which we carry
on our trade.

Finally, GATT must now work — and work
hard — to find new ways to help the developing
countries expand their export earnings. The de-
veloping countries will, of course, realize sub-
stantial benefits from the Kennedy Romid,

' Trade in dairy products.

14

DEPARTMENT OF STATE BtrLLETDI

especially as their exports of semimanufactures
and manufactures begin to expand. But, their
main problem at this time, and for several years
ahead, must be in the area of exports of primary
products. Difficult as it may be, the developed
countries must work, must work to provide ex-
panded opportunities in their markets.

In this connection, we must also recognize
that the problem of expanding exports of the
developing countries is by no means only a prob-
lem of eliminating barriers to trade. Equally as
important is the need for developing countries
to produce at competitive prices the kind of
products for which there is a demand in world
markets and to market these products effec-
tively. The GATT International Trade Center,
working with UNCTAD [United Nations Con-
ference on Trade and Development], can play
a very constructive role in the marketing area,
and we strongly support the work of the Center.

Later, after further broad discussions in other
forums among interested comitries, the GATT
will be called upon to deal with the possibility
of a general system of preferential access to de-
veloped countries for the exports of developing
countries. My nation has joined with a nimiber
of others to explore the feasibility of such a
preference system and of some of the principles
which might be embodied in it. Eventual con-
sideration of such a system of general prefer-
ences by the GATT will be one of the important
tasks before us.

The work of the GATT will not, however, be
confined only to the issues we can now foresee.
New problems will undoubtedly arise from time
to time, and we shall have to work together on
them. One possible difficulty may arise out of the
plan of some of the important trading coun-
tries in Europe to make significant changes in
their tax systems. These will increase their bor-
der tax adjustments. We are seriously concerned,
as we have indicated before, that these adjust-
ments in certain cases adversely affect our ex-
ports. Should these fears prove in fact to be
justified, we would expect to take up this mat-
ter in accordance with normal GATT proce-
dure. If it becomes evident in the coming months
that there is a general multilateral problem
here, it might then become advisable for the
Contracting Parties to give this kind of prob-
lem their attention.

Tliere are of course basic continuing questions
which require perhaps an even broader outlook
than we have traditionally taken in the GATT.
For example, the expansion of world trade must

be accompanied by continuing improvement in
the income of workers and in the working
conditions of labor. We must recognize that
imreasonable labor conditions, particularly in
production for exports, create serious difficul-
ties in international trade. This is an area
which the Contractmg Parties might wish to
explore jointly with the International Labor
Organization.

So much then for the future work of GATT.
If there is iserhaps an imderlying theme that
may be developing in our consultations over the
last several days, it is that the trading nations
of the world must press ahead patiently and
imaginatively into an even broader expansion
of world commerce. To do this, we need, both
within our individual countries and within the
GATT, to analyze in general and in specific
terms the complex and deeply rooted barriers
to trade that still exist. We must not use the
words "general studies" to mask a failure to
grapple with immediate and specific problems.
Neither, however, can we forget that underlying
the various complexities of trade there lie basic
questions of policies that must be understood to
be improved.

We learned, I think, in the Kennedy Roimd
how much intensive work was necessary before
those final months of negotiations. Let us build
then on that experience and do our work
thoroughly and well in a positive and construc-
tive spirit, so that the world may hold what it
has now gained and move forward with new
vigor in the years ahead.

U.S. and Japan Hold Talks
on Softwood Log Trade

Joint Statement

Press release 294 dated December 14

In accordance with the understanding
reached during the Sixth Meeting of the Joint
United States-Japan Committee on Trade and
Economic Affairs in September 1967,^ repre-
sentatives of the two Governments met Decem-
ber 11-13 to examine the current problem of
reconciling conservation and trade interests
involved in the use of timber resources of the
Pacific Northwest and Alaska.

^ For background, see Bulletin of Oct. 9, 1067, p. 451.

JANUARY 1, 1968

15

The Japanese delegation was headed by
Shinsnke Hori, Economic Counselor of the
Japanese Embassy, and included representa-
tives of the Mmistry of Agriculture and Forest-
ry and the Ministry of International Trade and
Industry. The United States delegation was
headed by Joseph A. Greenwald, Deputy
Assistant Secretary of State for International
Trade Policy, and included representatives of
the Departments of Agriculture, Commerce,
Interior, Labor, and Treasury and the Office of
the Special Representative for Trade Negotia-
tions, the Council of Economic Advisers, and
the Small Business Administration.

They jointly examined the demand, supply
and price situation in forest products, the
organization and employment of the forest
products industries, and the impact of the log
trade on the timber consuming and processing
industries.

It was agreed that the importance of the log
trade problem required a continuation of dis-
cussions which would contribute to mutually
acceptable solutions to deal with the problem in
the Pacific Northwest. The next meeting will be
held in Tokyo in early 1968.

U.S. Protests Soviet Failure

To Give Notice of Scientific Tests

Press release 28S dated December 9

Following is the text of a note delivered to the
Soviet Ministry of Foreign Affairs hy tJie
American Embassy in Moscow on Decernber 8.

The Embassy refers to an announcement by
the official Soviet news agency TASS on Decem-
ber 2 that Soviet research vessels intend to carry
out hydroacoustic research involving under-
water explosions in an area near the Aleutian
Islands from December 3 to December 15. The
United States Government regrets the Soviet

Government did not find it possible to inform
the United States directly well in advance of
the begmning of these experiments which will
take place in close proximity to United States
territorial waters. This failure to provide ade-
quate advance notification could have jeopard-
ized United States marine craft in the area,
which were obliged to take urgent measures to
leave the zone specified in the TASS announce-
ment. Beyond this, the United States Govern-
ment would appreciate being informed as to
what precautions the Soviet Govermnent will
take in order to minimize the possibility of
damage to fish and other natural resources
including marine mammals in the area.

The Soviet Government should recall that
when the United States Government made
plans to conduct a similar seismological field
experiment in the North Pacific in October
1966, it infoi-med the Soviet Government of
this fact by note (No. 313, dated August 19,
1966) several weeks in advance. The United
States Government outlined in detail prepara-
tions for the experiment and invited the Soviet
Government to provide an observer to be a mem-
ber of the scientific party of the vessel carrying
out the experiment. Further information on
the United States experiment was provided to
the Soviet Government in notes dated October
18, 1966, and February 8, 1967. Moreover, when
the Soviet news agency TASS on October 19,
1966, expressed the Soviet desire that no explo-
sions be conducted in certain areas, the United
States Government responded to this appeal by
instructing United States scientists not to con-
duct explosions in the areas specified. On May
24, 1967, the United States Government m its
Note No. 1716 informed the Soviet Government
of plans to conduct another seismological field
experiment off the Aleutian Islands.

The United States Government believes that
such experiments are of general interest and
hopes the Soviet Government will share the
knowledge derived from its current series with
the world scientific community.

16

DEPARTMENT OF STATE BULLETIN

THE CONGRESS

Recent International Developments
Concerning the Ocean and Ocean Floor

Statement hy Joseph J. Sisco

Assistant Secretary for Interrmtional Organization Affairs '■

I am happy to appear before this committee
to discuss some recent international develop-
ments concerning the ocean and ocean floor and,
in that light, the joint resolutions being con-
sidered by this committee. Leonard Meeker, the
Department's Legal Adviser, and Herman Pol-
lack, the Department's Director of Literna-
tional Scientific and Technological Affairs, are
accompanying me to provide any information
you may desire within their fields of activity.

In recent years we have seen an upsurge of
interest, both here and abroad, in marine prob-
lems, especially those having to do with the
ocean depths and the seabed and subsoil of the
outer oceans. In the United States, the Congress
passed the Marine Resources and Engineering-
Development Act, which became law on June 17,
1966. The Marine Council and the Marine
Commission established pursuant to that act
are engaging in an active program of planning,
study, and coordination looking toward the
adoption of soimd national policy for the ex-
ploration and exploitation of the oceans in years
to come.

Litemationally, a similar interest in marine
affairs has been apparent. The Intergovern-
mental Oceanographic Commission, an orga-
nization of UNESCO [United Nations Educa-
tional, Scientific and Cultural Organization],
has carried on invaluable scientific activities in
oceanography; the Food and Agriculture
Organization is closely concerned with fisheries;
the World Meteorological Organization is
concerned with the effect of the oceans on cli-
mate ; the International Maritime Consultative
Organization is interested in shipping problems
and safety of lives at sea ; and the International

Telecommunication Union is concerned with
communications over the ocean.

In this sense a large number of international
organizations are exploring marine problems as
seen from their own particular points of view.
We run the risk of confusion, duplication, and
chaos unless something is done to relate all these
activities more purposefully. Under strong
U.S. leadership, the Economic and Social Coun-
cil of the United Nations asked the U.N. Secre-
tary-General in mid-1966 to begin a study of
what might briefly be described as "who does
what" in international marine activities, exclud-
ing fisheries. Specifically, the Council's resolu-
tion called for a study of the current state of
knowledge of marine resources and techniques
for their exploitation.

Building on this foundation, the U.N. Gen-
eral Assembly a year ago asked the Secretary-
General in effect to broaden this study so as to
review the current state of knowledge as regards
ocean sciences and to improve international
cooperation.- This study is also going forward.
The Secretary-General has been directed to
report to the next U.N. General Assembly, just
a year from now.

Meanwhile, more and more people have rec-
ognized that we stand at the threshold of what
may be a very exciting period in scientific devel-
opment in the marine field. We are already able
to put a man down to the bottom of the deepest
ocean trench, just as we are able to put a man
above the earth's atmosphere into outer space.
Soon we shall be able to perform a variety of
tasks in what Senator [Claiborne] Pell calls
"ocean space," just as we are learning to do more
and more useful tasks in outer space. As

' Made before the Senate Committee on roreign
Relations on Nov. 29.

'U.N. doc. A/RES/2172 (XXI).

JANUARY 1, 1968

17

recently as 1958, we thouglit it sufficient to pro-
vide for exploitation of the continental shelf in
a convention prepared under U.N. auspices by
the Conference on the Law of the Sea.^ That
convention provided for the exercise of sover-
eign rights over adjacent ocean floor to areas
to a depth of 200 meters and beyond to the limit
of exploitability.

What we must ask ourselves now is whether
we do not need new legal arrangements for the
exploitation of the outer oceans and the deep
seabed and whether we do not need a concerted
international effort to stimulate and coordinate
scientific exploration there. Essentially, that is
what the discussion in the United Nations today
is all about.

Our objectives with respect to a legal regime
concerning exploitation of the deep ocean floor
are readily identifiable. We desire a legal regime
that will encourage the development and use
of the deep ocean floor, that will avoid danger-
ous conflicts among the nations that will be
exploiting the floor's resources, and that will be
broadly acceptable to the nations of the world.

The focal point of international discussion
is the proposal made by Ambassador Arvid
Pardo, the representative of Malta, in the cur-
rent U.N. General Assembly. Ambassador
Pardo has proposed that the Assembly look
toward a new international treaty which in
brief would reserve the ocean floor beyond the
limit of national jurisdiction exclusively for
peaceful purposes and establish an interna-
tional agency to assume jurisdiction over the
deep ocean floor and its resources. In the origi-
nal Pardo proposal the financial benefits from
the exploitation of these resources were to be
allocated primarily to the less developed
countries.

This is an interesting and suggestive pro-
posal, but it obviously raises a great many diffi-
culties and problems to which the answers are
not easily found. The plain fact is that no one
has yet had the time or the opportunity to think
through completely the implications of the
Pardo proposal and of other proposals calling
for radical action on the subject of the oceans.

Specifically, we have little knowledge of the
economic factors involved in exploiting the deep
seabed resources presumed to exist but not ac-
tually located. No one has considered seriously
the question of how to induce enterprise to

' For text of the Convention on the Continental Shelf,
see Bulletin of June 3, 1958, p. 1121.

undertake the risks of deep sea exploration and
exploitation if the financial benefits are to go
to others. We are far from ready to establish a
new international organization to preside over
this amalgam of uncertainties. Nor is there
yet broad agreement on the general legal princi-
ples which ought to govern activities in the
deep ocean floor. We must be concerned with
these economic and legal factors, as well as the
very important security considerations involved.

The discussion of the Pardo proposal in the
General Assembly thus far has surfaced these
problems and a great many more besides. As
delegates have come to realize how little they
actually know about these matters, many of
them have been imderstandably cautious about
moving too far or too quickly. The Soviet bloc,
notably, has taken a most restrictive attitude,
even doubting the advisability of setting up a
General Assembly committee on the subject.
And others, while agi-eeing to a temporary
conunittee, would give it only a highly restric-
tive mandate for the time being.

Our own position, as set forth by Ambassador
Goldberg on November 8,* was, we think, a
balanced and judicious presentation of both the
possibilities and the problems of international
cooperation as regards the oceans, and I would
like to submit that statement for the record.
The Ambassador stressed the importance we
attach to a comprehensive and responsible study,
to the growth of international cooperation in
exploration of the ocean floor, and to the devel-
opment of general principles to guide the ac-
tivities undertaken in this field.

Ambassador Goldberg maintained that the
deep ocean floor should not become a stage for
competing national sovereignties. Eather, it
should be open to exploration and use by all
states without discrimination. Recognizing that
the first issue before the Assembly was how to
organize itself to implement the objectives it
considered desirable, the Ambassador recom-
mended the establishment of a committee on the
oceans which would act for the General Assem-
bly in considering all marine questions brought
before the Assembly. Such a committee would
assist the General Assembly in promoting long-
term international cooperation in the marine
sciences and in particular assist the Assembly
on questions of law, arms control, and problems
of iJollution.

' Ibid., Nov. 27, 1967, p. 723.

18

DEPARTMENT OF STATE BUULETIN'

Ambassador Goldberg pointed to the impor-
tance of beginning now to tackle the legal issues
involved by developing general principles to
govern states in their activities on the deep ocean
floor. He emphasized the complexity of the is-
sues and noted that treaties already exist which
bear on the subject. The ^Vnibassador affirmed
the willingness of the United States to partici-
pate fully in whatever studies are necessary in
determining the future legal regime of the deep
ocean floor.

Some 47 countries have spoken in the debate
on this subject in the political committee of the
General Assembly. An informal working group
is now engaged in an effort to arrive at a broadly
acceptable resolution. The working group
should reach its conclusions within a very few
days. I cannot foresee precisely wliat action it
would recommend; but I can say that on the
basis of the information we now have, it is prob-
able that a committee will be established, with
an initial life of 1 year, to carry out on behalf
of the General Assembly a review of some of
the issues involved. We would expect to partici-
pate actively in such a committee, together with
a representative selection of other countries
drawn from all regions and including states
with important maritime interests.

In our consultations with the Members of
Congress, we in the executive branch have
stressed the complexity of the problems con-
fronting us and the time it would take to reach
satisfactory solutions of these problems. We
have made it clear that we are only at the begin-
ning of what will certainly be a lengthy process
of national and international deliberation. In
such a situation we see great advantages in keep-
ing open every desirable option. We are, more-
over, fully sensitive to the rights, claims, and
interests of American citizens and American
enterprises in the various aspects of maritime,
fisheries, and other marine activities; and of

course, we are always guided in the first instance
by national security considerations.

In these circmnstances we do not believe it
would be desirable or helpful for the Congress
at this time to go on record with any of the
resolutions introduced in the two Houses. With
specific reference to the two resolutions before
the Senate, I believe that the proposal presented
by Senator [Norris] Cotton, stressing the im-
portance of caution, has already been reflected
in the position we have taken in the General
Assembly. I do not believe that the General
Assembly will be taking the kind of action
against which Senator Cotton's resolution was
designed to guard. I would therefore suggest
that no action need be taken on this proposal.

Senator Pell has introduced two resolutions.
The first would express the sense of the Senate
on six broad propositions concerning the use of
ocean resources, conservation, freedom of ex-
ploration, arms control, the limits of the conti-
nental shelf, and criminal jurisdiction. Senator
Pell's second resolution expands on these propo-
sitions and sets out in great detail a number of
legal principles that might be adopted by the
General Assembly. A great deal of value has
been accomplished by the mere introduction of
these resolutions. They provide a useful focus
for thought and planning. The Department is
directing serious attention to the broad range
of problems enumerated in these resolutions.
The Arms Control and Disarmament Agency is
studymg the practicability and national security
implications of nuclear arms control measures
applicable to the deep ocean floor. This activity
is being coordinated with the Department of
Defense and other branches of the Govermnent
concerned.

Let me assure the committee that we intend to
continue our consultations with interested com-
mittees and Members of the Senate and House
of Representatives as the international discus-
sion on this subject moves forward.

JANUARY 1, 1968

19

INTERNATIONAL ORGANIZATIONS AND CONFERENCES

United States Urges Renewed Dedication
to U.N. Peace and Security Activities

Statement hy Congressman L. H. Fountain
U.S. Representative to the United Nations ^

At the very outset, let me state on behalf of
my Government that the United States assigns
particularly high priority to the peace and
security activities of the United Nations. The
United States has supported United Nations
peacekeeping in the past. We shall continue
to do so. But we must also emphasize that we
believe in collective action, in shared responsi-
bilities for peace.

Within recent weeks, the United States
Congress, of which I have the honor to be a
Member, passed an amendment to the Foreign
Aid Act expressing the sense of the Congress
that the cause of international order and peace
can be enhanced by the establislmient within the
United Nations of improved arrangements for
standby forces. The amendment requested the
President, through the United States Represen-
tative to the United Nations and in cooperation
with other members of the United Nations and
the United Nations Secretariat, to explore both
the means and the prospects of establishing such
peacekeeping arrangements.

We believe that the United Nations can suc-
ceed as peacekeeper only to the extent that sov-
ereign states are willing to make the necessary
political commitments and provide the required
financial support. Eesponsibility for peace can-
not rest with the great powers alone — although
peace is a vain hope without their support. No
one power or group of powers can or should
assert such responsibility.

Mr. Chairman, with each passing year it
becomes clearer that the key test of this or-

" Made in the Special Political Committee on Nov.
28 (U.S./U.N. press release 214).

ganization is its will and ability to respond,
rapidly and effectively, to peacekeepmg emer-
gencies. For much of mankind, this is what the
United Nations is all about. Nations should be
able to put their trust in this organization as
an impartial and effective guardian of peace.
To merit tliis trust, the United Nations must
demonstrate its readiness and its capacity to
respond to appeals for help when peace is threat-
ened or when violence menaces the sovereignty
or political indei)endence of member states.

Preserving U.N.'s Peacekeeping Capacity

In all candor it must be said — in fact we all
know — that skepticism and pessimism about the
prospects for effective United Nations peace-
keeping have mounted since this matter was
considered by the special General Assembly 6
months ago." The Special Committee on Peace-
keeping Operations has remained deadlocked in
its search for acceptable guidelines for the suc-
cessful conduct of future peacekeeping opera-
tions. The precipitate withdrawal of UNEF
[United Nations Emergency Force] 6 months
ago also stirred serious doubts about the prac-
ticality and reliability of the United Nations
in emergencies. Let us not minimize the effect
of these events on the calculations and attitude
of many govermnents.

Despite these doubts, however, we should not
forget that UNEF helped keep the peace in a
troubled area for 10 years — and that fighting
was brought to a halt by the intervention of the

' For a U.S. statement made In the fifth special ses-
sion of the Assembly on May 22, see Bulletin of
June 12, 1967, p. 894.

20

DEPARTMENT OF STATE BULLETIN

U.N., which was able to move impartial truce ob-
servers acceptable to both sides to the cease-
fire lines.

The lesson to be learned from these events is
that a new dedication is needed to tlie work of
building a stronger foundation for United
Nations peacekeeping.

Mr. Chairman, our purpose here today is to
consider how to provide the United Nations
with the tools and support it needs to enable
it to keep and make peace in the family of
nations. It is in this spirit that I wish to address
myself to the item under consideration.

Through the Committee of 33, various work-
ing groups that antedate that committee, infor-
mal consultations, and discussions in the
General Assembly, we have for many years been
wrestling with this question. We have faced the
double task of defining acceptable guidelines
for future peacekeeping and of improving the
capacity and reliability of the United Nations
to undertake peacekeeping operations.

Unfortunately, despite very broad support
both in the General Assembly and in the Special
Committee on the procedures which should be
followed in authorizing, financing, conducting,
and manning such operations, there has been no
agreement thus far on guidelines for the future.

Imaginative and constructive suggestions for
strengthening peacekeeping have been made by
member states, but the Assembly has been re-
luctant to implement these suggestions because
of the stubboin opposition of a few recalcitrant
powers.

Despite these disagreements, the capacity of
the United Nations, limited though it may be, to
send peacekeeping forces promptly to a troubled
spot must be preserved. If precise and agreed
"principles"' cannot be arrived at to govern
United Nations peacekeeping in the future,
there is all the more need to persevere in eiforts
to meet the United Nations' practical require-
ments for successful peacekeeping.

Practical Requirements

I should like to summarize the position of
I the United States on three pi-actical require-
ments for a workable and durable system of col-
lective action for peacekeeping. I will also point
out the direction in which I believe we should
move to help meet these requirements.

First and foremost, we must persevere in
efforts to devise reliable and equitable methods
of financmg peacekeeping operations.

There are many obstacles that must be over-
come before these efforts can bear fruit. The
most immediate obstacle is the substantial
unliquidated deficit.

Members are reluctant to assume new finan-
cial burdens so long as this deficit — caused by
the failure of certain countries to pay their
apportioned share of the costs of particular
operations — hangs over the organization. More-
over, this unliquidated debt places an unfair
burden on members to whom bills are owing for
past services. There is great danger that failure
to honor long-overdue bills could discourage
participation in future operations, particularly
by smaller and less affluent members.

For example, the United Nations owes gov-
ernments almost $12 million for unpaid bills
on the Congo account. A large part of this is
owed to developing countries. Let me mention
some: $1,879,000 is still owed to India; $1,200,-
000 to Ghana ; $955,000 to Nigeria ; $244,000 to
Liberia ; $105,000 to Senegal. The honor and the
credit of the United Nations are involved in
this matter.

In all honesty, Mr. Chairman, is it not dis-
maying that more than 2 years have passed since
the consensus of AugTist 1965 which ended the
imj^asse over article 19 — and yet the long-
promised substantial voluntary contributions
to overcome this deficit have not yet been
received from the Soviet Union or France?

In adopting the formula that broke the dead-
lock over article 19, this organization (and cer-
tainly the United States, which considered this
a matter of principle) yielded a critical point
on the applicability of collective financing. This
point was yielded in order to get the General
Assembly moving, with the clear understanding
that substantial voluntary contributions would
be forthcommg. Yet they have not appeared;
and once again, early this year, indications that
these countries would tender volimtary contri-
butions proved illusory and new conditions were
posed.

Let us clear up this deficit once and for all
and restore the United Nations to solvency.
Financial implications of political decisions
should be recognized and honored. It is irre-
sponsible and in the end self-defeating to call
on the United Nations to undertake an activity
and then turn one's back when the bills are
presented.

I should like to stress that this remains a
matter of deep concern to the people of the

JANTTAKY 1, 1968

21

United States and to our Congress, where I have
had the honor of serving for 15 years. The con-
tinued generous support of the people of the
United States and the Congress cannot be taken
for granted if others who benefit from United
Nations peacekeeping do not lend their own
support.

Mr. Chairman, in addition to overcoming the
liabilities of the past, my delegation believes the
following considerations for future methods of
financing must be clearly established.

Expenses should, insofar as possible, be the
collective responsibility of all. If peacekeeping
is to be a truly collective effort, its costs must
be both widely and equitably shared.

At the same time, flexibility must be main-
tained. A variety of ways to finance an opera-
tion should be considered: regular budget
apportionment, sharing of costs by beneficiaries,
voluntary contributions, and various formulas
for fair-shares allocation. All practical meth-
ods for any given operation should be carefully
considered and the most appropriate methods
adopted.

Also, Mr. Chairman, a renewed effort should
be made to devise a fair-shares scale for opera-
tions involving heavy expenditures. Any such
scale should take into account capacity to pay
and other relevant considerations. My Govern-
ment's views on this matter are clear. We sup-
port the principle of a special scale. We hold
that a practical and equitable approach would
be to draw up such a scale to serve as a model
or guideline for allocation of shares to be
adapted case by case.

We continue to believe that in applying a
special scale the United Nations must take steps
to make sure financial support will be forth-
coming by assuring the larger contributors an
approj)riate voice in financing decisions. One
way to do this is through a finance committee —
an idea put forward in various forms by dele-
gations of Nigeria, France, the United States,
and others. My Government urges a renewed
examination of the possibilities of such a finance
committee especially for operations involving
heavy expenditures.

The second requirement for efficient peace-
keeping is that the Secretary-General must have
the latitude and staff" and tools he needs to ad-
minister operations effectively.

United Nations peacekeeping, like any other
complex operation, requires a single executive.
There is no substitute, in practice, for the Sec-
retary-General and the Secretariat as the

administrative center for implementing peace-
keeping assigiunents. Responsibility and author-
ity must be given if the United Nations is to
act efficiently in the collective interest of us all.
The Secretary-General must, of course, operate
within the scope of this authoritj', remaining
fully responsible to the authorizing body. But
under the United Nations Charter and notably
chapter XV thereof, the administering author-
ity and responsibility are his. There is no viable
substitute. It is sophistry to suggest that peace-
keeping operations can be administered under
the committee system.

The third practical requirement for effective
peacekeeping operations is that the necessary
forces and facilities must be in readiness —
skilled, mobile, and equipped.

The most practical way to accomplish this
is to encourage and aid countries to earmark
standby forces, including police units and serv-
ice units and facilities, to be made available to
the U.N. in event of emergency.

Out of our deliberations over the years — and
particularly discussions in the Coimnittee of
33 — have come many constructive suggestions
for steps to improve the readiness and compe-
tence of volunteer standby forces. My Govern-
ment supports the provision, adopted by this
committee last year, that members inform the
U.N. about forces and facilities which they are
prepared to place at its disposal. This would
provide the Secretariat with useful information
on which to draw when a new peacekeeping
operation is authorized.

Mr. Chairman, these three requirements are
not new, although we believe the_v need continu-
ing reemphasis. They are needs long recognized
and pointed up by actual peacekeeping opera-
tions. Let us concentrate our energies on how
best to meet these practical requirements.

Support for a Peacekeeping Study

At this stage my delegation believes that the
most constructive step would be to support the
suggestion in the Secretary-General's introduc-
tion to his annual report for a study of standby
forces, the relationship of the U.N. to govern-
ments providing such forces, and the constitu-
tional and financial aspects of employing them.

Such a study would assist the development
of peacekeeping concepts and techniques. Al-
though the members would not be committed
to any of its conclusions, the study could point
up the lessons of experience and provide useful

22

DEPARTMENT OF STATE BULLETIN

practical ideas. It could examine measures that
the U.N. and member states might take to im-
prove their readiness to respond to a U.N. call.
As part of this work, it could consider what
agreements betwe<^n govermnents and the Sec-
retary-General might contribute to the stability
of future peacekeeping operations.

We are all aware of the great practical diffi-
culties involved in carrying out eti'ective peace-
keeping operations in situations in which the
host country may witlich-aw its consent, or the
troop contributors withdraw their troops, with-
out advance notice or consultation.

Obviously, peacekeeping operations rest upon
the consent of the host country. Nonetheless, my
Government believes that it should be possible
to draw up arrangements which would give
greater stability to U.N. peacekeeping opera-
tions without infringing in any way on the
sovereign rights of member nations.

The distinguished Foreign Minister of Ire-
hind [Franlc Aiken] last Friday made several
valuable suggestions for the drawing up of a
standard arrangement between the U.N. and
countries to which U.N. peacekeeping forces
were sent. My delegation believes these pro-
posals deserve serious consideration. This sub-
ject could be approached either tlirough the
study of peacekeeping operations recommended
by the Secretary-General or in other ways.

We believe that the U.N. might also explore
the possibility of arrangements whereby a suit-
able waiting period, during which consultations
could take place, would elapse between the time
host countrj' consent is withdrawn and the time
U.N. peacekeepers depart.

Such arrangements could be entered into on
an ad Iwc and voluntary basis. But if a country
desires a U.N. presence — if it desires the U.N.
to commit its resources and its prestige to keep-
ing the peace on its borders or between hostile
factions within its own country — it seems only
reasonable that the U.N. should in turn receive
the cooperation it needs to make its operations
effective.

It is equally difficult for the Secretary-Gen-
eral to plan peacekeeping operations satisfac-
torily when the troops or facilities which have
been conttmitted to the U.N. can be withdrawn
by the contributor comitry without advance
notice or consultation.

Peacekeeping operations would be stabilized—
and the etfectiveness and ability of the U.N.
to keep the peace would be enhanced — if ad-
vance notice were required for withdrawal of

troops or facilities. Exception could be made in
the event of national emergency in the contrib-
uting coxmtry. Such arrangements would in
practice require very little additional obligation
on the part of the contributing country than
under present arrangements. But the added sta-
bility would contribute gi-eatly to the effective-
ness of United Nations peacekeeping and to the
ability of the U.N. to carry out its charter pur-
pose of maintaining international peace and
security.

Some members have suggested that the study
of peacekeepmg operations be entrusted to a
committee, and, true enough, the Secretary-Gen-
eral himself suggested the alternative of a com-
mittee especially authorized by the General As-
sembly for this purpose.

My delegation believes, however, that this
would head us down the wrong path. No inter-
national committee suddenly seized of a problem
of such complexity and in which it has had no
exj^erience — no matter how able its members —
could make this study as effectively as the Secre-
tary-General. The Secretary-General and his
staff can draw on the experience and expertise
of 20 years and on studies of individual cases
already undertaken by the Secretariat. Apart
from other considerations, the Secretary-Gen-
eral and his staff would be able to complete such
a study expeditiously.

We do not believe that the Militaiy Staff
Committee should be expected to undertake this
task. The IMilitai-y Staff Committee has never
been concerned with consent-type peacekeeping.
Its realm is enforcement action. The provision
for consent-type peacekeeping is another mat-
ter. We must be sure that no steps taken will in
any way impair the availabilitj^ of volunteer
standby imits. Countries which have indicated
a readiness to do so might be discouraged from
proceeding with plans to train and equip con-
tingents for peacekeeping if we bring into this
effort the Military Staff Committee, which was
set up under the charter to provide backstop-
ping for enforcement action.

Of course, progress in strengthening peace-
keepuig arrangements need not and should not
await completion of the study. Numerous in-
terim steps can be taken by the U.N. and by
members to improve readiness to respond to
peacekeeping needs.

One such step is to support and cooperate
with the U.N. in the peacekeeping operations
now mider way, particularly in Cyprus and in
meeting the expanded responsibilities of

JANUARY 1. 196S

23

UNTSO [United Nations Truce Supervision
Organization] . It is unconscionable that the Sec-
retary-General should be faced month after
month with a running deficit for the Cyprus
force and that as a consequence the continuance
in service of some contingents remains in doubt.
Only 49 members have made contributions, and
the burden falls inequitably.

Another step is for each of us to consider how
best we can provide U.N. peacekeeping opera-
tions with the teclmical skills and services that
may be needed. This is apart from earmarking
and training regular troop contingents and mili-
tary observers. In almost every operation the
U.N. needs specialists in supply, in transporta-
tion, and in communications imder crisis condi-
tions. The U.N. may at times need skilled engi-
neers to build and repair roads and bridges. It
may need medical personnel and equipment for
mobile medical miits. Each of us should be tak-
ing a good look at what we can best do.

The United States is prepared to aid and co-
operate in two ways.

First, my Government reaffirms its readiness
to cooperate in practical plans to aid countries
which earmark troop contingents for U.N.
peacekeeping.

Second, the United States will continue to
consider various actions we might take to assist
in sustaining U.N. peacekeepers and to assure
that an operation will not be hampered for lack
of ready logistical support. Our nation is deeply
concerned with insuring the adequacy of proce-
dures and arrangements for effective U.N.
peacekeeping. We are prepared to do our fuU
share in advancing this objective.

The Irish Proposal

Mr. Chairman, at this point let me say a word
about tlie proposal for a special scale of assess-
ments for costly peacekeeping operations sub-
mitted by the distinguished Foreign Minister of
Ireland on behalf of Ceylon, Costa Rica, Ghana,
Ireland, Ivory Coast, Liberia, the Philippines,
Togo, and Upper Volta."

My delegation wishes to reaffirm what Ambas-
sador Goldberg and Senator [Clifford P.] Case
have said on this proposal in the past 2 years :
that we consider Foreign Minister Aiken's ap-
proach a constructive contribution to U.N.
thinking on the complex problem of peacekeep-
ing. Special credit is due to Mr. Aiken for his

' U.N. doc. A/SPC/L. 148.

perseverance and the leading role he has played
in stimulating a meaningful discussion on the
need for reliable and equitable means of financ-
ing. We agree with his thought that we need to
find a more equitable distribution of the burden
of peacekeeping.

However, we continue to liave reservations
about the specific proposal. We are unable to
subscribe to a plan which could require the
United States either to pay up to 50 percent of
the cost of any operation that it supported or to
opt out entirely.

Among other problems, under existing legis-
lation we could not vote for any assessment for
which the United States share would be more
than one-third— although, as members know,
the United States, including assessed and volun-
tary contributions, has paid 40 percent and
more toward the cost of larger peacekeeping op-
erations in the past. Therefore, the United
States will abstain on the Irish proposal.

Peacemaking — Integral Part of Peacekeeping

Air. Chairman, one dimension of the peace-
keeping problem has been neglected. I refer to
peacemaking: the development of procedures
for coping with underlying causes of conflict
and achieving a settlement.

The United Nations has often intervened suc-
cessfully to stop fighting, but too often it has
been unable to go to the root of the trouble and
proceed from peacekeeping to peacemaking. The
point was made in the Secretary-General's in-
troduction to the annual report that "The ca-
pacity of the United Nations to settle disputes
or promote constructive and peaceful solutions
to disputes is as much in need of study as the
problems of peace-keeping — perhaps more so."

Mr. Chairman, there are several ways in
which we can make further progress in develop-
ing the U.N.'s capacity for peacemaking.

First of all, we need to underscore again the
charter obligations of member states to resort
to peaceful settlement of disputes. The conflict
in the Middle East points up forcefully that the
primary requirement of a peaceful resolution
of conflict is the readiness of the parties con-
cerned to make the necessary accommodations
and to use whatever processes are available to
them for moving toward a just and lasting
peace.

Second, while the primary responsibility
rests on the parties to a conflict, others can

24

DEPARTMENT OF STATE BULLETIN

help. Wo can improve our methods and ma-
chinery for peaceful settlement and make
greater use of the machinery which we already
have. I grant you that methods or machinerj'
have limited utility without the underlying
l^olitical will to resolve an item. But they can
play a significant part in encouraging recourse
to peaceful processes and in achieving an
acceptable settlement.

We need to take a fresh and imaginative look
at existing institutions both inside and outside
the U.N. system and at various new proposals
for improved methods of arbitration and fact-
finding, such as the proposals now being dis-
cussed by the Sixth Committee as a result of
the initiative of the Netherlands. Future con-
sideration of these proposals might also be
aided by studies by UNITAE [United Nations
Institute of Training and Research].

I should also like to suggest, as an interim
measure, that the Assembly give serious consid-
eration to revivmg tlie Panel for Inquiry and
Conciliation. A regularly constituted panel of
experts might advise the Secretary-General on
ways in which the officials of the United
Nations, as well as special representatives,
might be more widely used to promote the
peaceful settlement of disputes.

The panel might include as members ex officio
the Presidents of each of the five preceding Gen-
eral Assemblies. It should meet frequently with
the Secretary-General to examine current activ-
ities by the U.N. for the peaceful settlement
of disputes and to consider measures for im-
proving these activities. The members of this
panel could also be available for specific U.N.
assignments whenever their services were
needed.

Finally, our concern with peacekeeping is
inadequate unless we recognize that the peace-
ful settlement of disputes is an integral part of
the process of maintaining or restoring peace
and security. As Ambassador Goldberg pointed
out in this committee 2 years ago : *

Clearly peacekeeping operations should not be a sofa
to provide a comfortable respite from efforts at peace-
ful settlement — they should be a springboard for ac-
celerated efforts to eliminate the root causes of conflict.
And no less clearly, we must develop the same sense
of urgency in dealing with the causes of conflict that
we have demonstrated in the containment of conflict.

We have learned from the harsh lessons of
Kashmir, of Cyprus, and of the Middle East
that we cannot be content merely to keep the lid
on trouble, to live with unresolved issues that
fester and then erupt periodically into war. Our
first concern should of course be to stop the
fighting. Beyond this, we need to examine each
situation which calls for a peacekeeping opera-
tion to determine how the U.N. can best move
the conflict to a settlement.

In some cases this may mean the appoint-
ment of a mediator as part of the U.N. peace-
keeping presence. In others U.N. involvement
in peacemaking may more profitably be imder-
taken as a separate activity. My delegation
urges that wherever possible, specific actions for
peacemaking be made an integral part of the
mandate of future peacekeeping operations.

Mr. Chairman, the United States is proud of
its record over the years as one of the stanch
supporters of U.N. peacekeeping efforts.

We are pledged to cooperate in imiiroving the
effectiveness of the U.N.'s peacekeeping ar-
rangements and will continue to support them.

The U.N.'s future depends on its success in
involving itself actively in tlie cause of peace.

Much has been made in Assembly discussions
of the limitations in the charter — limitations on
the U.N. and on members. Some have tended to
emphasize the don'ts in the charter — what is
prohibited, stressing noninterference and non-
involvement.

Of course, we must operate within the limits
of the charter. But in most instances the perils
of inaction outweigh the perils of action. Our
preference should be to act to carry out the pur-
poses of the charter.

Let me conclude by saying that, important
as adequate machinery is, the key problem is
not machinery but political will.

Improvements in peacekeeping machinery
will not serve the cause of peace without the
readiness of all of us to back U.N. peacekeepers
both with our political commitment and with
our financial support. We must reject negativ-
ism and resignation. We must choose renewed
dedication to the hard work of keeping the
peace.

* For text, see U.S./U.N. press release 4748 dated
Dec. 14, 1965.

JAXrARY 1, 196S

25

U.S. Gives Views on Soviet Proposal for Convention
on "Nonuse" of Nuclear Weapons

Statement hy Adrian S. Fisher

U.S. Representative to the General Assemhly ^

The Foreign Minister of the Soviet Union
has 131'oposed for tlie consideration of this Gen-
eral Assembly an item entitled "Conclusion of
a convention on the prohibition of the use of
nuclear weapons." - Moreover, when he in-
scribed this item on our agenda he offered a
draft of such a convention.^ We are now debat-
ing the issues which this draft- convention raises.

By way of preface I would like to point out
that no nation lias tried harder than the United
States to deal with the threat to us all posed
by the development of the atomic bomb and
the growing stockpiles of nuclear weapons. In-
deed, when there was only one nuclear power
and that power was the United States, we tried
to remove nuclear weapons wholly from the
military arena. Thus it was that the United
States introduced the Baruch plan to the United
Nations in 1946.* To the great misfortune of
all mankind this proposal was not accepted,
for reasons which I am sure are known or re-
membered by all of us here today.

Following the initiative of the United States,
first reflected in the Baruch plan, the United
Nations has continued to study various measures
by which man can use his mind to jjrevent the
nuclear holocaust which his weaponry has made
possible. But it is clear that man's development
of nuclear weapons has thus far outpaced his
ability to reach agreement on such measures.

^Made in Committee I (Political and Security) on
Nov. 20 (U.S./U.N. press release 198).

" Item 96 was included in the agenda by the General
Assembly on Sept. 26.

' U.N. doc. A/6S34.

* Bulletin of June 23, 1946, p. 1057.

The United States therefore continues earn-
estly to seek meaningful measures which will
subject these weapons of mass destruction to the
kind of effective control that will prevent their
use. It is in this spirit that my delegation offers
the following comments on the Soviet proposal.

The concept of an miqualified agreement not
to use nuclear weapons is not new to this Com-
mittee. We have discussed it mtermittently here
for about 20 years. Last year, as I am sure you
well remember, the General Assembly approved
a resolution requesting the then jDroposed World
Disarmament Conference to give serious con-
sideration to this subject.^ Before that time, in
1963, the question of the convening of a special
conference to conclude a convention of nonuse
of nuclear weapons had been referred to the
Eighteen-Nation Disarmament Committee for
study. Still earlier the Secretary-General had
been requested to poll member governments as
to their attitude toward the conclusion of such
a convention. We must note that no agreements
have evolved from these efforts.

It is not surprismg that m'c appear unable to
make any progress on an unqualified agreement
not to use nuclear weapons, since throughout
the history of the consideration of this concept
the basic issues have remained substantially un-
altered. And these are most contentious issues,
Mr. Chairman. The United States position on
these issues has been set forth many times.
Secretary Rusk explained the views of the
United States in his letter to the Secretary-
General dated June 30, 1962, and Mr. [William

= n.N. doc. A/RES/2164 (XXI).

26

DEPARTMENT OF STATE BULLETIN

C] Foster restated them at the 82d meeting of
the UNDC [United Nations Disarmament
Commission] in 1965.

A review of these issues is essential in con-
sidering the Soviet draft. There are two sub-
stantive articles in the proposed draft conven-
tion contained in the attaclmient to the letter
inscribing the Soviet item now under considera-
tion. The first involves as its principal pai-t an
undertaking by eivch party to the convention not
to use nuclear weapons under any circumstances.

At first glance this seems like a direct and
sensible approach to the problem. Any nation
whose leadersliip retains its sanity wants to
avoid nuclear war. It is therefore understand-
able that there should be a certain attraction to
a draft convention which gives the impression
that it will prevent nuclear war by the simple
expedient of requiring the parties to it to agree
not to use nuclear weapons if they should become
involved in military conflict.

But merely- wantmg to avoid nuclear war —
seeking an agreement to outlaw it — is not
enough. Instead what we must do is to embark
on a course of conduct which decreases the pos-
sibilities of such a nuclear war ever happening.
We must do so in the light of the realities of
the dangerous age in which we live, an age in
wliich there already exist enormous nuclear
weapons stockpiles and rapid means of delivery.

The Hard Test of Reality

It is against the hard test of reality that we
should examine the first article in the Soviet
draft convention.

This article involves an imqualified under-
taking by the parties to the convention not to
use nuclear wea25ons under any circumstances.

Such an obligation would be applicable
whether or not all the states involved in a con-
flict had accepted the same obligation ; it would
prohibit the use of nuclear weapons against a
nuclear-weapon state which had itself expressly
refused to accept such an obligation and which
was itself threatening a nuclear attack.

Its protection would extend to a non-nuclear-
weapon state even if it were engaged in an act
of aggression in which it was supported by a
nuclear- weapon state.

Such an obligation would be applicable to
prevent nuclear-weapon states signatory to the
convention from usmg their nuclear power to

assist any state that has forsworn nuclear
weapons and which was the victim of nuclear
aggression by a state not party to the convention.

Such an obligation would be applicable to a
conflict between nuclear-weapon states, regard-
less of the circumstances surrounding tlie initia-
tion of the conflict. Its terms would prohibit the
use of nuclear weapons in self-defense against
the forces of another nuclear-weapon state en-
gaged in an act of aggression. This would be
the case even if the use of those weapons in self-
defense was confined to their use on or over the
territory of the state using them or the terri-
tory of non-nuclear-weapon states that it was
defending.

Mr. Chairman, in considering this item we
must consider the role that the present nuclear
forces play in the relatively stable strategic
balance which now exists between the major
nuclear powers in the world and the effect on
that balance of an obligation not to use nuclear
weapons under any circumstances. So long as a
situation exists under which these major nuclear
powers have massive stockpiles of nuclear arma-
ments arrayed against each other as well as
massive conventional forces, so long as there is
the possibility that a massive attack might
threaten a country's national survival or the
integi'ity of all or a substantial part of its effec-
tive armed forces, the most effective way of
minimizing the risk of nuclear war will be
through the maintenance of tliis mtitual de-
terrence. Inherent in the preservation of this
deterrence is the existence of offsetting postures
of deterrence under which a nation, even after
absorbing a surprise nuclear first strike, would
have a reliable ability to inflict in turn an un-
acceptable degree of damage on the aggressor.
It is this retaliatory capability which deters ag-
gression.

Credibility of Mutual Deterrence

As long as such a posture continues, an agree-
ment not to use nuclear weapons, even in self-
defense or in retaliation, would be, at worst,
deceptive and therefore dangerous and, at best,
unrealistic.

In the worst case, it would be deceptive and
therefore dangerous if potential aggressors were
to believe that nuclear stockpiles would not be
used for their designed purpose of deterrence or
defense. Such a deception would be dangerous

JANUARY 1, 1968

27

if it were to lead to a miscalculation by one
power concerning another's deterrent posture, a
type of miscalculation which represents the
greatest danger of nuclear war ever occurring.

Such deception would be equally dangerous
if it were to lead a nuclear-weapon state not
party to the treaty to believe that it could engage
in acts or threats of nuclear aggression against a
state which had f oisworn nuclear weapons with-
out other nuclear-weapon states using their nu-
clear power to coimter any such blackmail or
aggression.

Almost as unsatisfactory is the case in which
states would regard as unrealistic a convention
under which it was agreed that powerful nu-
clear forces created and maintained for deter-
rence and defense were not to be used for the
purposes for which they were created. The pres-
entation of a treaty which was artificial and
lacking in credibility would be to debase the cur-
rency of international treaty making and to
create a sense of false security among nations
regarding the risks of nuclear war.

In the present balance which now maintains
the peace, we cannot aiford either deception or
imreality. The emphasis must be on credibility
of intentions and capabilities; each major nu-
clear power must have no doubt as to precisely
where the others stand. It is this growing credi-
bility of effective mutual deterrence and matur-
ing sense of responsibility on the part of the
major powers in recent years which tends to
reduce the risk of a nuclear holocaust.

Elimination of Nuclear Stockpiles

If we are to reduce further this risk, rather
than increase it, we must find some way to work
out^ properly safeguarded agreements first to
limit, and later to reduce, and finally, in the
context of general and complete disannament, to
eliminate these weapons from national arsenals.

With this in mind the United States noted
with interest the second article of the draft con-
vention offered by the Soviet Union. Under this
article each party would undertake "to make
every effort to arrive as soon as possible at
agreement on the cessation of the production
and destruction of all stockpiles of nuclear
weapons in confoi-mity with a treaty on general
and complete disarmament imder effective inter-
national control."

In putting forth this language, the U.S.S.R.

appears to have tacitly recognized at least two
important points : first, that its nonuse proposal
would not be a meaningful document unless
something were done about nuclear stockpiles;
second, that the elimination of nuclear weapons
from national arsenals could only be accom-
plished in the context of general and complete
disarmament under effective international
control.

As is apparent from these remarks, the United
States disagrees with the priority which the
Soviet text assigns to these two tasks. We be-
lieve that prohibitmg the use of nuclear weap-
ons and then doing something about nuclear
stockpiles in the context of general and com-
plete disarmament puts the cart before the
horse, so to speak. But the fact that there ap-
pears to be agreement tliat the two subjects are
related does afford a foundation upon which
something must be built.

I would thei'efore like to dwell for a moment
on the second point of the Soviet draft conven-
tion: that the elimination of nuclear weapons
from national arsenals should be accomplished
pursuant to a treaty on general and complete
disarmament under strict international control.
This is a point with which we are familiar. It
has been explicit in both the U.S. Outline of
Basic Provisions of a Treaty on General and
Complete Disarmament in a Peaceful World ®
and the Soviet Draft Treaty on General and
Complete Disarmament under Strict Interna-
tional Control, as amended by the provision for
retention of a limited number of strategic de-
livery vehicles.

Let me speak first of the U.S. draft treaty
outline. It provided that in the first stage
the parties to the treaty would halt the produc-
tion of fissionable materials for use in nuclear
weapons and would transfer agreed quantities
of weapons-grade fissionable material from
weapons use to peaceful purposes. During the
first stage the parties woidd also examine ques-
tions relating to the means of accomplishing,
during stages II and III, the reduction and
eventual elimination of nuclear weapons from
national stockpiles. This elimination would not
take place until the end of stage III.

Let me now discuss the Soviet draft, treaty on
general and complete disarmament. The initial
Soviet draft provided for the destroying of the

° For text, see Bulletin of May 7, 1962, p. 747.

28

DEPARTMENT OF STATE BULLETIN

means of delivery of nuclear weapons during
the tii-st stage of disarmament and the destroy-
ing of the nuclear weapons themselves during
the second stage. Later, tlie Soviet Union indi-
cated its willingness to amend its treaty and
finally offered a formal amendment providing
for the retention, until the completion of the
process of general and complete disarmament,
of an "umbrella" of intercontinental missiles,
antimissile missiles, and ground-to-air antiair-
craft missiles, together with the nuclear war-
head launching devices and guidance systems
for these various missile systems.

I do not now propose to deal with the diffi-
culties which the United States has had with
the Soviet-proposed strategic umbrella. In
brief, it is based on our feeling that it was not
consistent with paragraph 5 of the Joint State-
ment of Agreed Principles for Disarmament
Negotiations ' that all measures of general and
complete disarmament should be balanced so
that at no stage could any state or group of
states gain military advantage and that security
must be insured equally for all.

I do propose to point out, however, that even
the Soviet proposal recognizes that the elimi-
nation of nuclear warheads could take place
realistically only in the context of general and
complete disannament and then only at the
completion of that process. If we were to agree
that nuclear forces were to remain in existence
until the completion of the disarmament proc-
ess, whether as proposed by the United States
or as proposed in the Soviet-proposed strategic
umbrella, we would be doing so in recognition
that these forces have come to serve an indis-
pensable fimction — the function of mutual de-
terrence. No one would believe us — and we
would have debased the currencj^ of interna-
tional negotiations — if we were at the same time
to agree that they would never be used even for
this purpose.

The reason for the fact that under both dis-
armament plans nuclear weapons are not elimi-
nated from national arsenals until the end of
the disarmament process is not hard to find. It
is due to the problem of verification. A nuclear
weapon need not be very large, and a great
many have been produced by the nuclear-
weapon powers ; it would be very hard to satisfy

'For text of the U.S.-U.S.S.R. joint statement of
Sept 20, 1961, see ibid., Oct. 9, 1961, p. 589.

all countries to a disarmament agreement that
they have all been destroyed.

And the possibilities of successful evasion
are substantial. It would not take many nuclear
weapons secreted m the caves of an evading
country to threaten completely the security of
another country which had destroyed its nu-
clear stockpiles. A covert nuclear stockpile
coupled with adequate delivery means which
might seem insignificant in relation to the pres-
ent nuclear arsenals could threaten the world
if all other nuclear countries had destroyed
their own stockpiles. As the epigrammist once
put it : "In the world of the blind, the one-eyed
man is king." I need not labor further the point
that verified elimination of all nuclear stock-
piles by all nuclear states is a sine qua non for
a world free of the threat of nuclear holocaust.

Realistic Measures

The United States has presented to the ENDC
realistic measures for the reduction of the na-
tional arsenals of weapons of mass destruction,
including nuclear and thermonuclear weapons,
measui'es which can be put into effect before the
completion of the processes of general and com-
plete disarmament.

With si^ecific reference to the cutoff of the
production of fissionable material for weapons
purposes, Mr. Foster made a comprehensive
statement to the ENDC on February 13, 1964,
in which he indicated that the United States
was prepared to agree either to a complete halt
in the production of fissionable materials for
use in nuclear weapons or to a reciprocal plant-
by-plant shutdown. In addition, the United
States has stated that it is prepared to transfer
G0,000 kilograms of weapons-grade U-235 to
peaceful uses if the U.S.S.R. would agree to
transfer of 40,000 kilograms for such purposes.
This material would be obtained by the demon-
strated destruction of nuclear weapons by each
party.

The United States has also put forth work-
able measures dealing with the reduction of
delivery systems for nuclear weapons. President
Johnson proposed in his message to the ENDC
in January 1964 ^ that "the United States, the
Soviet Union and their respective allies should
agree to explore a verified freeze of the number
and characteristics of strategic nuclear offensive

"ma., Feb. 10, 1964, p. 225.

JAXUAET 1. 1968

29

and defensive vehicles," thereby opening the
path to reductions in all types of forces. More re-
cently, the President last March reconfirmed
our willingness to discuss with the Soviet Gov-
ernment means of limiting the arms race in
such missiles." And as recently as September of
this year Secretary [of Defense Robert S.]
McNamara reiterated our willingness to enter
into safeguarded agreements first to limit, and
later to reduce, both offensive and defensive
strategic nuclear forces.^" As Assistant Secre-
tary of Defense Mr. [Paul C] Warnke has
pointed out : ^^

We believe a number of possibilities for parallel ac-
tion and even for formal agreement with the Soviets
would permit our reliance on unilateral means of veri-
fication. Other more far-reaching agreements, particu-
larly any involving substantial reductions, would
require agreed International inspection.

Agreement on these various proposals dealing
with the material to make nuclear weapons, the
weapons themselves, and the means of their
delivery is, we believe, the way to start the
process toward the eventual elimination of nu-
clear weapons and the means of their delivery
pursuant to general and complete disarmament
under strict and effective international control.
When we reach this point, we will have reached
a stage where we will have provided mankind
with lasting security against the threat of a
nuclear holocaust.

However, it seems premature to speak of a
sweeping and unqualified agreement not to use
nuclear weapons that is not a part of a com-
prehensive program leading to general and
complete disarmament mider effective inter-
national control. I have raised the issues con-
nected with the Soviet draft convention now
not in any contentious spirit but because the
problems that are associated with them are mat-
ters of vital concern to the security of all of us.

The United States believes that the best ways
to get on with the work of disarmament — all
aspects of disarmament — is to continue, through
the ENDC, to discuss and arrive at agreements
on the serious measures that have been proposed

there and elsewhere to limit and later reduce
and eliminate our nuclear forces.

These are the considerations my delegation
will have in mind in considering any proposal
which may come forward in this debate.^^

Current U.N. Documents:
A Selected Bibliography

Mimeographed, or processed documents (such as those
listed below) may he consulted at depository libraries
in the United States. V.N. printed puhlications may
be purchased from the Sales Section of the United
Nations, United Nations Plaza, N.Y.

General Assembly

Report of the Special Committee on Principles of
International Law concerning Friendly Relations
and Co-operation among States. A/6799. September
26, 1967. 216 pp.

Report of the Committee on the Peaceful Uses of Outer
Space. A/6804. September 27, 1967. 101 pp.

Report of the Secretary-General on the implementa-
tion of paragraphs S and 9 of General Assembly
Resolution 2252 (ES-V) concerning contributions to
humanitarian assistance in the Middle East. A/6847.
October 4, 1967. 8 pp.

Report of the Secretary-General on the Effects of the
Possible Use of Nuclear Weapons and on the Secu-
rity and Economic Implications for States of the
Acquisition and Further Development of These
Weapons. A/6858. October 10, 1967. 102 pp.

United Nations Institute for Training and Research.
Report of the Executive Director. A/6875. October
25, 1967. 109 pp.

United Nations Program of Assistance in the Teaching,
Study, Dissemination and Wider Appreciation of
International Law. Report of the Secretary-General.
A/6816. October 28, 1967. 35 pp.

Economic and Social Council

Population Commission :

Promotion of Improvement in Demographic Sta-
tistics ; Progress Report on Improvement of
Demographic Statistics. Note by the Secretary-
General. E/CN.9/215. September 8, 1967. 34 pp.

World Demographic Survey : Urban and Rural
Population, 1920-1980. Summary Report of the
Secretary-General. E/CN.9/209. September 22,
1967. 24 pp.

" For a statement by President Johnson on Mar. 2,
see ibid.. Mar. 20, 1967, p. 445.

"For Secretary McNamara's address at San Fran-
cisco, Calif., on Sept. IS, see ibid., Oct. 9, 1967, p. 443.

" In an address made before the Advocates Club of
Detroit on Oct. 6.

^ On Dec. 4, by a vote of 56 to none, with 33 absten-
tions (U.S., France, and U.K.), Committee I adopted a
draft resolution (A/C.1/L.409) urging all states "to
examine . . . the question of the prohibition of the use
of nuclear weapons and the draft convention on the
prohibition of nuclear weapons." The committee's draft
resolution was adopted on Dec. 8 by the General As-
sembly (A/RES/2289 (XXII) ) by a vote of 77 to none,
with 29 abstentions (U.S., France, and U.K.).

30

DEP.\RTMENT OF STATE BULLETIN

TREATY INFORMATION

Current Actions

MULTILATERAL

Atomic Energy

Agreement for the application of safeguards by the
International Atomic Energy Agency to the bilateral
agreement between the United States and Indonesia
of June S, 1960, as amended (TIAS 4557, 6124), for
cooperation concerning civil uses of atomic energy.
Signed at Vienna June 19, 1967.
Entered into force: December 6, 1967.

Agreement for the application of safeguards by the
International Atomic Energy Agency to the bilateral
agreement between the United States and Iran of
March 5. 1957, as amended (TIAS 4207, 6219), for
cooperation concerning civil uses of atomic energy.
Signed at Vienna December 4, 1964.
Entered into force: December 4, 1967.

Coffee

International coffee agreement, 1962, with annexes.
Open for signature at United Nations Headquarters,
Xew York. September 28 through November 30, 1962.
Entered into force December 27, 1963. TIAS 5505.
Accession deposited: Cyprus, November 2, 1967.

Maritime Matters

Amendment to article 28 of the convention on the Inter-
governmental Maritime Consultative Organization
(TIAS 4044). Adopted at Paris September 28, 1965.
Enters into force November 3, 1968.
Senate advice and consent to acceptance: December
11, 1967.

Postal Matters

Constitution of the Universal Postal Union with final
protocol, general regulations with final protocol, and
convention with final protocol and regulations of
execution. Done at Vienna July 10, 1964. Entered
into force January 1, 1966. TIAS 5881.
Ratifications deposited: Iraq (with a declaration),
September 22, 1967 ; Senegal, September 26, 1967.
Adherence deposited: Barbados (with reservations),
November 11, 1967.

Telecommunications

International telecommunication convention with an-
nexes. Done at Montreux November 12, 196.5. Entered
into force January 1, 1967 ; as to the United States
May 29. 1967. TIAS 6267.
Ratification deposited: Mexico, November 2, 1967.

Partial revision of the radio regulations (Geneva,
1959), as amended (TIAS 4893, .5603), to put into
effect a revised frequency allotment plan for the
aeronautical mobile (R) service and related infor-
mation, with annexe.';. Done at Geneva April 29, 1966.
Entered into force July 1, 1967; as to the United
States August 23, 1967, except the frequency allot-

ment plan contained in appendix 27 shall enter into
force April 10, 1970. TIAS 6332.

Notification of approval: Bulgaria (with statement),
August 29, 1967.

United Nations

Amendment to article 109 of the Charter of the United
Nations (TS 993). Adopted at New York December
20, 1965.'
Ratification deposited: Venezuela, November 9, 1967.

BILATERAL

France

Consular convention, with protocol and exchanges of

notes. Signed at Paris July 18, 1966. Enters into force

January 7, 1968.

Proclaimed liij the President: December 11, 1967.
Consular convention. Signed at Washington February

23, 1853.

Terminated: January 7, 1968 (replaced by conven-
tion of July 18, 1966, supra) .

PUBLICATIONS

Second Volume in Foreign Relations
Series for 1 945 Released

The Department of State on December 13 released
Foreign Relations of the United States: Diplomatic
Papers, 19^5, Volume II, General: Political and Eco-
nomic Matters (Iviii, 1,611 pp.).

This volume covers a wide variety of the most sig-
nificant developments in U.S. multilateral diplomacy
both in the ijolitical and economic spheres. Among the
subjects covered by the documentation are the first
session of the Council of Foreign Ministers in London ;
the meeting of the American, British, and Soviet For-
eign Ministers at Mo.scow; the efforts of the United
States to rescue .Tews and other refugees in Germany
and German-occupied territory ; and measures taken by
the United States to provide relief for the peoples of
the occupied and devastated areas of Europe. Docu-
mentation is also included on American efforts to estab-
lish a system of international control of atomic energy.

Copies of this volume (Department of State publica-
tion 8314) may be obtained from the Superintendent of
Documents, U.S. Government Printing Office, Wash-
ington, D.C. 20402, for $5.25 each.

' Not in force.

JAinjARY 1, 1968

^1

Recent Releases

For sale by the Superintendent of Documents, U.S. Gov-
ernment Printing Office, Washington, D.C. 20^02.
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ments. A 25-percent discount is made on orders for 100
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same address. Remittances, payable to the Superintend-
ent of Documents, must accompany orders.

Background Notes. Short, factual summaries which
describe the people, history, government, economy,
and foreign relations of each country. Each contains
a map, a list of principal government officials and
U.S. diplomatic and consular officers, and. in some
cases a selected bibliography. Those listed below are
available at 5 cents each.

Bulgaria. Pub. 7882. 6 pp.
Cameroon. Pub. 8010. 5 pp.
Haiti. Pub. 8287. 4 pp.
Iraq. Pub. 7975. 4 pp.
Laos. Pub. 8301. 8 pp.
Libya. Pub. 7815. 5 pp.
Mauritania. Pub. 8169. 5 pp.
Mexico. Pub. 7865. 6 pp.
Pakistan. Pub. 7748. S pp.
El Salvador. Pub. 7794. 5 pp.

Sample Questions from the Written Examination for
Foreign Service Officer (revised). A description of the
written examination and samples of the kinds of ques-
tions asked in the several parts of the test. Pub. 7640.
Department and Foreign Service Series 123. 88 pp.
Limited distribution.

Your Department of State (revised). Pamphlet giving
concise information on the history, organization, and
activities of the Department (including basic facts
about the Department of State building). Pub. 7644.
Department and Foreign Service Series 124. 16 pp. 15^.

Answering Aggression in Viet-Nam. Text of remarks
by President Johnson on Sept. 29, 1967, before the Na-
tional Legislative Conference at San Antonio, Texas.
Pub. 8305. East Asian and Pacific Series 167. 12 pp. 15^.

Foreign Aid: An Essential Element of United States
Foreign Policy. Address by Under Secretary of State
Nicholas deB. Katzenbach before the New England
Jaycee Convention at Hyannis, Mass., Sept. 30, 1967.
Pub. 8309. General Foreign Policy Series 221. 12 pp. 15(f.

U.S. Viewpoint on Four Current World Problems.

Statement by Arthur J. Goldberg, U.S. Representative
to the United Nations, made in plenary session of the
U.N. General Assembly on Sept. 21, 1967. Reprinted
from Department of State Bulletin of Oct. 16, 1967.
Pub. 8310. International Organization and Conference
Series 78. 8 pp. 5(J.

The Central Issue in Viet-Nam: Secretary Rusk Dis-
cusses U.S. National Interests in Asia. Text of a news
conference held by Secretary of State Dean Rusk on
Oct. 12, 1967, relating principally to Viet-Nam (ex-
cerpts). Preprinted from full text which was pub-
lished in Department of State Bulletin of Oct. 30, 1967.
Pub. 8313. East Asian and Pacific Series 168. 9 pp. 15«(.

Concert and Conciliation: The Next Stage of the At-
lantic Alliance. Address by Under Secretary of State
for Political Affairs Eugene V. Rostow before the At-
lantic Treaty As.sociation at Luxembourg on Sept. 11,
1967. Reprinted from Department of State Bulletin of
Oct. 2, 1967. Pub. 8315. International Organization and
Conference Series 79. 9 pp. IS?!.

Load Lines. Convention, with Regulations, between the
United States of America and Other Governments —
Done at London April 5, 1966. Date of entry into force
July 21, 19C8. TIAS 6331. 234 pp. $1.25.

Alien Amateur Radio Operators. Agreement with
Venezuela. Exchange of notes — Signed at Caracas Sep-
tember 18, 1967. Entered into force October 3, 1967.
TIAS 6348. 4 pp. 5<t.

32

DEPARTMENT OF STATE BULLETIK

INDEX January 1, 1968 Vol. LVIII, No. I4S8

Africa. 1967 — A Progress Report (Rusk) ... 1

Asia. 1967 — A Progress Report (Rusk) ... 1

Congress. Recent International Developments
Concerning the Ocean and Ocean Floor
(Sisco) 17

Developing Conntries. The Future Work Pro-
gram of GATT (Roth) 13

Disarmament. U.S. Gives Views on Soviet Pro-
posal for Convention on "Nonuse" of Nuclear
Weapons (Fisher) 26

Economic Affairs

The Future Work Program of GATT (Roth) 13

1967 — A Progress Report (Rusk) 1

U.S. and Japan Hold Talks on Softwood Log

Trade (joint statement) 15

U.S. and Philippines Begin Talks on Future Eco-
nomic Relation* (Braderman) 11

World Trade and Finance and U.S. Prosperity

(Johnson) ". q

Europe. 1967 — A Progress Report (Rusk) . . 1

Foreign Aid. 1967 — A Progress Report (Rusk) 1

International Organizations and Conferences.
The Future Work Program of GATT (Roth) . 13

Japan. U.S. and Japan Hold Talks on Softwood
Log Trade (joint statement) 15

Latin America

The Contours of Change in the Home Hemi-
sphere (Oliver) 8

1967— A Progress Report (Rusk) 1

Mexico. Mexican-U.S. Trade Committee Holds
Third Meeting (joint communique) .... 10

North Atlantic Treaty Organization. 1967 — A
Progress Report (Rusk) 1

Philippines. U.S. and Philippines Begin Talks on
Future Economic Relations (Braderman) 11

Presidential Documents

U.S. Extends Sympathy on Death of President

Gestido of Uruguay 5

World Trade and Finance and U.S. Prosperity . 6

Publications

Recent Releases 32

Second Volume in Foreign Relations Series for

1945 Released 31

Science

Recent International Developments Concerning

the Ocean and Ocean Floor (Sisco) .... 17
U.S. Protests Soviet Failure To Give Notice of

Scientific Tests (text of note) 16

Trade

The Future Work Program of GATT (Roth) 13

Mexican-U.S. Trade Committee Holds Third

Meeting (joint communique) 10

U.S. and Japan Hold Talks on Softwood Log

Trade (joint statement) 15

Treaty Information

Current Actions 31

1967— A Progress Report (Rusk) . . . . . 1

U.S.S.R. U.S. Protests Soviet Failure To Give
Notice of Scientific Tests (text of note) . . 16

United Nations

Current U.N. Documents 30

Recent International Developments Concerning
the Ocean and Ocean Floor (Sisco) .... 17

U.S. Gives Views on Soviet Proposal for Con-
vention on "Nonuse" of Nuclear Weapons
(Fisher) 26

United States Urges Renewed Dedication to U.N.
Peace and Security Activities (Fountain) . . 20

Uruguay. U.S. Extends Sympathy on Death of
President Gestido of Uruguay (Johnson) . . 5

Name Index

Braderman, Eugene M n

Fisher, Adrian S .'.'.'. 26

Fountain, L. H . . 20

Johnson, President . . . . 5 6

Oliver, Covey T ' ' g

Roth, William M \ [ 13

Rusk, Secretary \ 1

Sisco, Joseph J .'..'. 17

Check List of Department of State
Press Releases: December 11-17

Press releases may be obtained from the OflSce
of News, Department of State, Washington,
D.C. 20520.

Releases issued prior to December 11 which
appear in this issue of the Bulletin are Nos. 266
of November 18, 281 of December 6, 285 of
December 7, and 288 and 290 of December 9.

Ko. Date Subject

t291 12/11 Transmittal letter and text of pro-
posed bill concerning travel to
restricted areas.

t292 12/11 U.S.-Korean cotton textile agree-
ment.

*293 12/13 U.S. Government establishes
award for civilian employees in
Viet-Nam.
294 12/14 U.S.-Japanese meeting on soft-
wood log trade : joint statement.

t295 12/15 1967 NATO ministerial meeting:
final communique.

*Not printed.

tHeJd for a later issue of the Bxjlletin.

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THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

OF

STATE

BULLETIN

Vol. LVIII, No. 11^89

January 8, 1968

"A CONVERSATION WITH THE PRESIDENT"
Excerpts From Television Interview 33

AJMERICA WILL STAND FIRM IN VIET-NAM

Address hy President Johnson {Excerpt) 39

NORTH ATLANTIC COUNCIL MEETS AT LUXEMBOURG

Text of Final Communique Jfi

THE IVHDDLE EAST CRISIS AND BEYOND
hy Under Secretary Rostow H

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII No. 1489
January 8, 1968

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The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
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interested agencies of the Government
with infornuition on developments in
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I

"A Conversation With the President"

Following are excerpts from an interview
with President Johnson wTxicli was taped in the
Presidents office on December 18 and broadcast
on nationwide television and radio on Decemher
19. Interviewing the President were Dan Ra.tlier
of the Columhia Broadcasting System, Frank
Reynolds of the Amencan Broadcasting Oom-
fany, and Ray Scherer of the National Broad-
casting Company. The transcript of the
intervieio ivas released by the White House on
December 19.

Mr. Rather: Mr. President, I think any
American seated in this chair tonight tcould
want to ask you about peace. Do you have any
fresh, new ideas about getting peace in Viet-
Nam, or are we stuck with, as I think Secretary
Rusk has put it, ^hoaiting for some sign from
the other side"?

The President: Peace is the number-one sub-
ject in the mind of every leader in the Govern-
ment. We are searching for it a jjart of every
day.

There are four or five specific things that we
think should be agreed upon. We think tliat the
war now going on at the DMZ, at the 17th
parallel, should stop. We think that infiltration
of Laos sliould stop. They have previously
agreed to that.

We thinlv tliat the people of South Viet-Nam
have demonstrated that they want to be gov-
erned on the basis of one-man one-vote, and
people who are prepared to live under that kind
of an arrangement could live under that kind
of arrangement.

The thing that we must recognize about
peace is that it is much more than just wishing
for it. You can't get it just because you want it.
If that were true, we would have had it a long
time ago, because there are no people in the
world who want peace more than the President,
the Cabinet, and the people of the United
States.

But if we are to find the solution of uniting
the people of South Viet-Nam and solving the
problems in South Viet-Nam, it must be done
not by some Senator or Congressman Kyan, or
Senator Hartke, or Senator Fulbright, or some
of our best-intentioned people who want peace.
Tliis peace is going to be found by the leader-
shiji of South Viet-Nam, the people of South
Viet-Nam, in South Viet-Nam.

We are encouraging that. We are going to
continue to do our dead-level best to see this
constitutional government, where 70 percent of
their people registered and 60 percent of their
people voted, develop some kind of a plan that
we think will ultunately unite South Viet-Nam
and bring peace to that area.

This will take time. This will take patience.
This will take understanding.

The great problem we have is not misleading
the enemy and letting him think — because of
some of the statements he hears coming from
us — that the way is cheap, that it is easy, or
that we are going to falter.

Mr. Scherer: Mr. President, there seems to be
a growing impression throughout the world
that the United States will settle for nothing
less than military victory in Viet-Nam. What is
your view on that?

The President: I have just explained what I
thought would be a fair solution. I will repeat it
as briefly and as succinctly as I can.

The demilitarized zone must be respected as
the 1954 agreements require. The unity of Viet-
Nam as a whole must be a matter for peaceful
adjustment and negotiation.

The North Vietnamese forces must get out of
Laos and stop infiltrating Laos. That is what
the 1962 agreement required, and it must be
respected.

The overwhelming majority of the people of
South Viet-Nam want a one-man-one-vote con-
stitutional government.

JANUARY 8. 1968

33

About 70 percent of all the citizens who might
have voted in South Viet-Nam registered in the
election, and 60 percent of them voted.

The 20 percent or so of the population now
under Viet Cong control must live under a one-
man-one-vote constitutional system if there is
to be peace.

President Thieu has said that the South Viet-
namese Government is not prepared to recog-
nize the NLF as a government, and it knows
well that NLF's control is by Hanoi. And so
do we. But he also has said that he is prepared
for informal talks with members of the NLF,
and these could bring good results.

I think that is a statesmanlike position. And
I hope the other side will respond. That is why
our statement in early December said we believe
that the South Vietnamese must work out their
own future, acting through electoral processes
of the kind carried forward in the last 2 years.^

The political future of South Viet-Nam, Mr.
Scherer, must be worked out in South Viet-Nam
by the people of South Viet-Nam.

It is our judgment that this war could be
ended in a matter of weeks if the other side
would face these five simple facts and if some
of our own people here in this country would
encourage that that be done instead of broad-
casting alarms that may give false signals both
to Hanoi and to the Viet Cong.

South Vietnamese Self-Determination

Mr. Rather: Mr. President., are we willing to
accept Communists in a coalition government
if the South Vietnamese Government and the
NLF got together to negotiate? Are we loilUng
to accept Communists in a coalition govern-
ment?

The President: I think we must bear in mind
that what happens in South Viet-Nam is up to
the people of South Viet-Nam, not to North
Viet-Nam, not to China, the Soviet Union, or
the people of the United States— but the people
of South Viet-Nam.

We are prepared to have every man in South
Viet-Nam under their constitutional govern-
ment, one-man one-vote^for those people them-
selves to determine the kind of government they
want. We think we know what that determina-
tion would be from the 70 percent who are regis-

* For text of a statement by the Department spokes-
man on Pee. R, see Bulletin of Dec. 2.5, 1967, p. 854.

tered and the 60 percent who have voted. It is
a matter for them to determine, not for me to
determine.

I think that we might add one other thing
here: "Wlien Mr. Reynolds says what are the
minimum conditions for this or that, we don't
want to get sparring with each other.

But I can say that so far as the United States
is concerned, we are ready to stop fighting to-
night if they are ready to stop fighting. But we
are not ready to stop our side of the war, only
to encourage them to escalate their side of the
war.

We will reciprocate and meet any move that
they make, but we are not going to be so soft-
headed and puddingheaded as to say that we
will stop our half of the war and hope and pray
that they stop theirs.

Now, we have tried that in some instances.
We have leaned over backward. Every time we
have, they have escalated their efforts and they
have killed our soldiers. We have got no result
from it. A burnt child dreads the fire.

But if you want us to stop our bombing, you
have to ask them to stop their bombing, stop
their hand grenades, stop their mortars.

At San Antonio I laid out the formula, and I
said we will stop bombing immediately provided
you will have prompt and productive
discussions.^

Now, that is about as far as anyone can go.
That is as far as anyone should go. That is as
far as we are going.

Mr. Scherer: Mr. President., is it your feeling
that you have now inade our proposition and the
next move is up to them,?

The President: Well, it is my feeling that
our position in the world is very clearly known.
If it is not, I have tried to repeat it enough
tonight that the people can understand it.

Hanoi's Attitude

Mr. Reynolds: Mr. President., what is your
assessment of Hanoi's attitude at this point in
the. war? Do you, helieve they are counting, sir,
on your defeat next Novemher?

The President : I think that Hanoi feels that
if they can hold out long enough, that they will g
not win a military victory against General \
Westmoreland. They haven't done that. They

'/&/(?., Oct. 23, 1967, p. 519.

34

DEPARTMENT OF STATE BULLETIN

can't point to one single victory (hey won from
our Marines or from our Air, from our Navy or
from our Ai-niy.

Tliey tliink. though, that they can repeat what
liajijicnod to tliom with the French: that if their
will is strong and they continue to remain tirm,
that they will develop enough sympathy and
understanding in this country, and hatred for
war in this counti-j-, that their will will outlast
our will.

Now, I don't think that is true. I think in due
time, if our people will understand and recog-
nize what is happening, I think they will help
me prove it is not true.

Mr. Scherer: Mr. President, just to make this
ahundantly clear., what you seem to be saying
here tonight is: (a) that peace in Viet-Nam. is
principally up to the Saigon Govenvtnent rather
than the United States, and (J) that tlie Saigon
Goreimment can have useful talks ivith the Viet
Cong without recognizing them.

The President: Yes, I have said that I think
the war could be stopped in a matter of days if
President Thieu's suggestions tliat he inform-
ally talk with members of the NLF are carried
out and if they would agree to what they have
already agreed to in the 1954 accords and the
1962 accords and the other points that I men-
tioned this morning, like one-man one-vote
under the present constitutional government.

I think that would be a useful starting point.
And I think the result could be that we could
find a way to stop the war.

Question of Recognition of Viet Cong and NLF

Mr. Rather: Mr. President, I think what
bothers some people, though, is that President
Thieu and the South Vietnamese Government,
as it is now constituted, say that they do not
recognize the Viet Cong, they do not recognize
the NLF. Haw are they going to have negotia-
tions with them if they don't recognize them?

I The President: They could have informal
talks with them, Dan. I said that the President
had made clear that he would not recognize
KXiF, but we have made clear for many, many
months that their views can be heard and we can
respond to them: their recommendations can be
received and we can react to them.

President Tliieu, himself, in a very statesman-
like manner, has said that he would be agreeable

to having informal talks with their representa-
tives. We would hope that out of that some
understanding could be reached. I believe if it
could be reached, the war could be brought to a
close.

Support of Asian Effort in South Viet-Nam

Mr. Scherer: Mr. President, much has been
made of your 196 Jf. campaign statement about
not sending American hoys to fight in an Asian
war. As you look bajck on that now, was that a
pledge, a hope, or was it simply a statement of
jyrinciple in a larger context?

The President: Well, it was one of many
statements, if you will look back upon it, as a
part of a policy; namely, our policy then and
now was to keep our hand out for negotiations
and for discussions, and for peace, and our
guard up that would support the South Viet-
namese to keep them from being enveloped.

We made clear all through that campaign —
and in this speech which you have extracted one
little single sentence out of — that we felt that
the South Vietnamese ought to iiledge every
rasource they had, their men, their materials,
all of their resources, to defending themselves;
that we would never supplant them. But we
would supplement them to the extent that it was
necessary.

We did not plan to go intxj Asia and t« fight
an Asian war that Asians ought to be fighting
for themselves. But if Asians were fighting it for
themselves and were using all the resources that
they had in South Viet-Nam, there was no
pledge, no commitment, or no implication that
we would not supplement them and support
them as we are doing, and as we agreed to do
many years before in the SEATO Treaty, and as
we had agreed to do m the Gulf of Tonkin
resolution before tliat statement.

Mr. Rather: Mr. President, if the South —

T/ie President: That has just been a part
of the politicians' gambit of picking out one
sentence before you get to the "but" m it, and
say, "We are not going to take over all the fight-
ing and do it ourselves. We are not going to do
what Asian boys in South Viet-Nam should do."

They are doing it. They have over 700,000 men
there, out of 17 million population, and they
are raising another 65,000 compared to the ad-
ditional 40,000-odd that we are sending.

So we don't plan to supplant them at all. But

JAXT7ART 8, 1968

35

we do plan to supplement tliem to whatever is
necessary to keep the Communist conspiracy
from gobbling up that nation.

Performance of Soufh Vietnamese Army

Mr. Rather: Mr. President, if the South
Vietnamese are as dedicated to freedom as you
say, and as many who have ieen there say, why
is it that they dorCt fight as well motivated, or
at least seemingly, as the Viet Cong and flie
ComTTvunist North Vietnamese? To put it more
bluntly, why donH our South Vietnamese fight
as well as theirs?

The President: I don't think that all people
do everything alike. I know some television
broadcasters are Ijetter than others. I know some
Presidents that can perform in a conversation
better than others.

General Abrams [Gen. Creighton W. Abrams,
Deputy Commander, U.S. Military Assistance
Command, Viet-Nam], who is giving leadership
to the South Vietnamese people, thinks that
their army is developing veiy well.

Now, that is not to say that they are equal
to the best troops of every other nation, but
they have made great improvements. They are
working at their job. They still have some prob-
lems to correct in leadership. That is what really
determines what kind of a fighting force you
have. But they are getting at it, and they are
getting results.

It is mighty easy to blame someone else. That
is what we do. I don't think we get much out
of blaming our allies or talking about how much
better we are than they.

Most of the people out there tell us that they
believe that the South Vietnamese Army at this
time is equal to the Korean troops in 1954. If
they are, I don't think we will have to apologize
too much for them. They are taking up their
positions on the DMZ now.

They have been giving very good results from
their actions. General Abrams thmks they are
doing all right. I would prefer his judgment to
anybody's judgment that I know.

Mr. Reynolds: Mr. President, you hme al-
ways credited the Russians with a sincere desire
for peace in Viet-Nam. Do you still hold to that
vievy? If they really want peace, why don't
they stop supplying the North Vietnamese?

The President: "Without going into your
statements as to my views, I would say this : We
are not sure just at this point of all that moti-

vates the Chinese or the Eussians or any of the
other Communists who are supporting the
North Vietnamese.

I don't think I could honestly tell you just
what their motivations are. We have always
hoped that they would like to see this war
brought to an end. That has been their indica-
tion to us. Whether that would work out in the
long run, I don't know.

Glassboro Conference; the MicJdIe East Crisis

Mr. Scherer: Mr. President, that brings us
hack to Glassboro and your conversations this
surmner.^ How much of a factor in the restraint
that we and the Russians seem to show in the
Middle East crisis was a product of the dia-
log that you established with Mr. Kosygin at
Glassboro?

The President: I think that the Glassboro
conference was a very useful conference. I
am not sure that it really solved any of the
problems of the Middle East. I think the situ-
ation in the Middle East is a very dangerous
one.

I think we have made clear our viewpoint in
my statement of June 19th,* the five conditions
that ought to enter into bringing about peace
in that area. We stressed those to Mr. Kosygin
at Glassboro. He understands them. He did not
agree with them. But I think that the Soviet
Union understands that we feel very strongly
about this matter, that we do have definite
views.

I think Ambassador Goldberg, at the United
Nations, has made our position vei-y clear. As
a result of the action of the United Nations in
sending Ambassador Gunnar Jarring there as
a mediator,^ we are hopeful that the conditions
I outlined on June 19th can be worked out and
that a permanent solution can be found to that
very difficult problem.

I would say it is one of our most dangerous
situations and one that is going to require the
best tact, judgment, patience, and willingness
on the part of all to fiind a solution.

Mr. Rather: Mr. President, do you consider
that this country has the same kind of umwaver-
ing commitment to defend Israel against in-
vasion as we have in South Viet-Nam?

The President: We don't have a SEATO

" For background, see iUd., July 10, 1967, p. 35.

* For text, see ihid., p. 31.

" For background, see tfitd., Dec. 18, 1967, p. 834.

36

DEPARTMENT OF STATE BULLETIN

treaty, if that is what you are asking. We have
made clear our very definite interest in Israel
and our desire to preserve peace in that area of
the world by many means. But we do not have
a mutual security treaty with them, as we do in
Southeast Asia.

Mr. Reynolds: Mr. President, if we might
come hack for just a moment to the question of
our relations with the Soviet Union, it has often
heen said that one of the tragic consequences of
the war in South Viet-Nam is the setbach in
American- Soviet relations. Do you agree with
that? Do you think we are making progress
in getting along?

The President: There are a good many things
said, Mr. Rej-nolds, that people have to take
with a grain of salt. First, they ought to look
at the sources of these statements. I have tried
to analyze our position in the world with other
nations. "We do regret that we don't see every-
thing alike with the Soviet Union or other na-
tions. We hope that there wouldn't be this ten-
sion and these strains that frequently are in
evidence. Now, we don't say that everything is
100 percent all right, because we have very
definite and very strong differences of opinion
and philosophy.

But if you are asking me if the tension exists
today that existed when the Berlin wall went
up, the answer is no.

Now, we can understand the Soviet Union's
inhibitions and the problems they have as long
as Viet-Nam is taking place. They are called
upon to support their Communist brother, and
they are supporting him in a limited way with
some equipment. We wish that were not so.

We would hope that they would exercise their
duties and their responsibilities as cochairmen
and take some leadership and try to bring this
war to an end.

But we don't think that things arc as tense
or as serious or as dangerous as they were when
the Berlin wall went up, in the Cuban missile
crisis, or following Mr. Kennedy's visit with
Mr. Khrushchev at Vienna.

Headway Made on Agenda for Europe

Mr. Scherer: Mr. President, moving now to
Europe, what about the complaint of Europe
that our preocc^ipation with Viet-Nam has
caused United States relations with Europe to
take a hack seat?

in Europe. I find it in Georgetown among a
few columnists, generally.

The European leaders — we are having very
frequent exchanges with them, generally. Prime
Minister Wilson will be here early in February.
He has been here several times. We have been
to Germany, and Mr. Kiesinger and ahead of
him Mr. Erhard and ahead of him Mr. Ade-
nauer have been here. Many of the Scandina-
vian leaders have come here. The Dutch leaders
have come here.

This year in Europe we have had a very long
agenda that has produced what we think are
very excellent results. We have just concluded
an agreement on the Kennedy Eound, which
involved very far-reaching trade concessions.
We think it will stand as a monument to the
relationship of the people of Europe and the
people of the United States and vei-y much to
both of their advantages.

We had a challenge of NATO, and General
de Gaulle asked us to get out of France. We
sat down with the other 14 members of NATO,
the other European nations, and we looked at
our problem. We decided that we would go to
Belgium. Thirteen of those nations joined the
United States, and 14 of us went there.

NATO is now intact, as solid as it can be,
unified. Secretary Rusk has just returned from
very successful meetings with them.^

So the challenge to NATO has been rebuffed.
The difficulties of the Kennedy Round have
been solved. The frequent predictions that the
Germans would reduce their troop strength 60,-
000 and we would bring our divisions back
from Europe— those matters have been worked
out.

We are working feverishly every day trying
to bring about a nonproliferation agreement,
and we are making headway.

So I think, if you take the results of this
year's efforts in Europe, that most European
statesmen who have engaged in those efforts
would think we have been quite successful and
probably more successful than any other period.
And I do not see that we have either ignored
them or neglected them.

Mr. Rather: Mr. President, French President
de Gaulle, in light of his picking at NATO, his
attacks on the dollar, and now even training
of Russian troops, do you consider him a
friend or an enemy of this country?

The President : I don't find that complaint • For text of a NATO communique, see p. 40.

JANUARY 8, 1968

37

The President: I believe that the French
people have an understanding, an interest and
affection for the American people, and I think
it is greatly reciprocated.

I am sorry that the relationship between the
President and Mr. de Gaulle is not a closer one
and that we don't see matters alike any more
often than we do. We have tried to do every-
thing that we know to do to minimize the
differences that exist in the leadership of the
two Governments. "We strongly feel that the
peoples of the two countries have a long history
of friendship, and we are determined to pre-
serve that.

We are also determined to minimize our
differences and, from my part, to do nothing
to unjustly or vmduly provoke the French
Govermnent.

Mr. Rather: To get precisely to the point
ahout General de Gaulle as apart from the
French people —

The President: I got precisely to the point.
I don't want to do anything to accentuate, aggra-
vate, or contribute to emphasizing the differ-
ences that we have and straining the relations. I
think basically our people are friendly, and I am
going to do all I can to keep them friendly.

The World of the Future

Mr. Sclierer: As you look ahead to the tvorld
that your grandson is going to grow up in, what
kind of a tvorld would you like that to be?

The President : I would hope that it would be
a more knowledgeable world and a better edu-
cated world. There are four people out of even,'
10 today who cannot read "cat," who cannot
spell "dog," who cannot recognize the printed
word "mother." I would like to se« every boy and
girl wlio is born in the world have all the edu-
cation that he or she can take.

We are making great gains in that direction
in this country. I would like to see other nations
make gi-eat gains. I would like to see an enlight-
ened program of family planning available to
all the peoples of the world.

I would like to see the problem of food produc-
tion faced up to and nations take the necessary
steps to try to provide the food that they are go-
ing to need to support their populations.

I would like to see the miracles of health
extended to all the peoples of the world as they

were to the fellow who was operated on with the
heart change the other day.

I know that the infant mortality rate is going
dowTi. I should like to see it reflected in all the
110 nations.

In short, I believe that our ancient enemies
are ignorance and illiteracy, are disease and
bigotry. I would like to see my descendants gi-ow
up in a world that is as educated as possible, as
healthy as science will permit, as prepared to
feed itself, and which certainly has sufficient
conservation forces to permit enjoyable leisure
for the people who work long and late.

And I think we are moving to that end.

Communist China

Mr. Scherer: Mr. President, what about
China? Many people, as they peer off into the
midst of the futuTe, see our future problem with
China. If you could sit down with the rulers of
China, what would yoti- tell them about Amer-
ica's intentions toward them?

The President: I have said to them in several
public statements that we hope that they can
conduct themselves in such a way as will per-
mit them to join the family of nations and that
we can learn to live in hannony with each other.

We have no desire to be enemies of any nation
in the world. I believe that it is possible, over
the years, for them to develop a better imder-
standing of the world in which they live.

We think there are some very important
things taking place right in Cliina today that
will contribute to, we hope, a better undei"stand-
ing and a, more moderate approach to their
neighbors in the world.

We have obsei"\'ed their failures in Africa and
in Latin America and in Southeast Asia, where
they have undertaken aggressive steps that have
resulted in failure for them. And we hope that
they will profit by their experiences. We believe
they will.

We don't know all that we would like to know
about what is going on in China. It is a rather
closed society, and we don't have all the informa-
tion that we would like to have. But we are hope-
ful and we believe that over a period of time
that the opportunity exists for them to gam a
better understanding of the other peoples of the
world and thus be able to live more harmo-
niously with them.

38

DEPARTMENT OF STATE BULLETIN

America Will Stand Firm
in Viet-Nam

FaUowing is tlie closing portion of President
Johnson's address before the AFL-CIO Con-
vention, at Bal Harhour, Fla., on December 12
{White House press release).

I cannot close without sharing a few thoughts
with Tou on a matter that I think troubles all
of our hearts — that is the tragic but the vital
struggle in Viet-Nam that is going on there
tonight.

You have long stood in the front ranks of
this fight for freedom. But here in Florida this
winter you have added bright new testimony
to your resolve, and you have given new heart
to all who stand with you in search of peace.

I am very proud and very grateful, Mr.
Meany [George Meany, president of the AFL-
CIO] , for the resolution that you all have passed
here in support of freedom's cause. It is a ring-
ing declaration of your firm resistance to ag-
gression. That stanch spirit is constantly per-
sonified by that great, courageous leader — "Mr.
Labor" — George Meany. I thank him, and I
tliank all of you from the bottom of my heart.

I thank you, too, for another man.

He does not live in the Wliite House. He does
not guide the destiny of the Nation, and he
doesn't have the responsibilities throughout the
world on his shoulders alone. But he is face
down tonight in the mud of the DMZ. Or he
is out there storming a liill near Da Nang, or
crouched in a rice paddy in the Mekong Delta.

The American soldier thanks you from the
bottom of his heart. He knows, even if some
otliers don't, that your expressions of support
are not just so many flag-waving words.

"WTioever thinks that has never heard the
question that comes to me so often from the fox-
holes in my letters every day. He has never
felt the ache of a soldier who writes his Com-
mander in Chief and asks him — and this comes
in letter after letter: "We are doing okay — but
are the folks back home really behind us?"

American labor has answered that question
with a resomiding "Yes," and a firm "Yes, sir."
You have said it before, and you have repeated
it here — so strongly that even Hanoi cannot
mistake its meaning or misinterpret what it
says.

I know that many of labor's sons have left
their parents and their homes to risk their lives

for liberty and freedom in Viet-Nam. I know
that is torture for you, as it is for me. I know
that you regret every single dollar that we spend
on war — dollars that we want to sjDend on the
works of peace here at home.

But you and I know that we must persevere.
The torture we feel cannot beg the truth. It is
only our unswerving will. It is only our un-
shakable determination that can ever bring us
peace in the world.

It is very easy to agonize over the television
or to moralize or to pin your heart on your sleeve
or a placard on your back — and think to your-
self that you are helping somebody stop a war.

But I only wish that those who bewail war
would bring me just one workable solution to end
the war.

The peacemakers are out there m the field.
The soldier and the statesman need and welcome
the sincere and responsible assistance of con-
cerned Americans. But they need reason much
more than they need emotion. They must have a
practical solution and not a concoction of wish-
ful thinking and false hopes, however well in-
tent ioned and well meaning they may be.

— It must be a solution that does not call for
surrender or for cuttiuir and runninjj now. Those
fantasies hold the nightmare of world war III
and a much larger war tomorrow.

— It must be a solution that does not call for
stepping up our military efforts to a flashpoint
where we risk a much larger war today.

The easiest tiling in the world for the Presi-
dent to do is to get in a larger war. It is very
difficult to continue day after day to pressure
the enemy without involving yourself in addi-
tional problems.

I, for one, would be glad and grateful for
any help that any citizen can give me. Thou-
sands of our soldier sons would also thank any-
one who has a plan or a program or a solu-
tion. I cannot help but feel that we would be
joined in our gratitude and our gladness by all
of our allies and by millions of thoughful Ameri-
cans. They are really the concerned Americans
who recognize the responsibilities that accom-
pany their rights and the duties that accompany
their freedom and liberty and who see it as a
duty of citizenship to try to be constructive in
word and constructive in deed.

For as long as I have borne the responsibility
of conducting our foreign policy, I have known
what I want you to know : I want all America
to know that it is easier to protest a policy than
to conceive one.

JANUARY 8, 196 8

39

And so your President has foUowed a rather
simple practice :

—If someone has a plan, I listen to it.

—If it seems worth pursuing, I ask the best
Americans I can find to give me their lodgment
on it. I have asked your president many times
for his judgment on these matters.

—If they like it and it seems wise to the Fiesi-
dent, then I try to put it into operation.

I can promise all who shout their opposition,
as well as any who have quieter doubts-and no
political aspirations-that I will continue this
practice. I will always be ready and anxious to
hear and to act on any constructive proposal

they offer. , , ^

But in the meantime, I want you to know,
and I want all America to know, that 1 am
not going to be deterred. I am not going to be
influenced. I am not gomg to be inflamed by a
bunch of political, selfish men who want to ad-
vance their own interests. I am going to continue
down the center of the road, doing my duty as
I see it for the best of all my country, re-
gardless of my polls and regardless of the
election.

—I will devote my days and my nights to
supporting and to supplying half a million ot
the bravest men who ever wore the American
uniform and who ever left these shores to fight
to protect us.

—I will honor and respect our sworn conamit-
ments to protect the security of Southeast Asia,
because in protectmg their security I protect
your security, your home, and your family, too.
We will not now betray the troubled leaders
and the hopeful people of that region who have
relied on Uncle Sam's word to shield them from
aggression— not after other Presidents who pre-
ceded me gave their solemn word. I am going to
see that that word is carried out.

—We will hold the line against aggression as
it has been drawn so often by the Congress and
by the President. We will not now nullify the
word of the Congress or the people, as expressed
in the SEATO Treaty, that we would come and
take our stand in the face of common danger—
that treaty was ratified by a vote in the Senate
of 82 to 1— or the Tonkin Gulf resolution, where
there were only two votes against it, when they
said they would support the President in what-
ever means it was necessary to take to deter ag-

.rression. I call on all of them to support him

o

now. 1 • 1 11

—At all times and m all ways and with all pa-
tience and all hope, your President and your
country will strive for peace.

Let no man, friend or foe, American or Asian,
mistake our meaning.

I remind all of you again tonight, and my
fellow Americans who may be viewmg this
proceeding, of our exchange of correspondence
with Ho Chi Minh.^ The North Vietnamese
themselves released my letter on March 21st. In
it, the President of the United States, on behalf
of the United States, made what we thought
was a fair and a firm offer. I said :

There is one good way to overcome this problem and
to move forward in the search for a peaceful settlement.
That is for us to arrange for direct talks between
trusted representatives in a secure setting and away
from the glare of publicity. . . .

As to the site of the bilateral discussions I propose,
there are several possibilities. We could, for example,
have our representatives meet in Moscow where con-
tacts have already occurred. They could meet in some
other countrv such as Burma. You may have other . . .
sites in mind, and I would try to meet your
suggestions. . . .

Can we be any more specific? Hanoi has
spumed that olive branch. They answered with
a rude "No," and they have repeated it time
after disappomting time. Until they relent, mitil
they see room for compromise and area for
agreement, we must stand firm and we must
stand unafraid. And we will.

Peace will come— I am convinced of that. But
until peace does come, I will continue, with the
support of our loyal, determined people, to hold
the line that we have drawn against aggres-
sion—and to hold it firm and to hold it steady.
In all that I do I will be strengthened by the
powerful testimony for freedom that you sons
of labor have given here in this hall. You
courageous men of labor have supported our
fighting men every time they needed you. You
have spoken as free men under fire must speak.
May all the world hear you. And may God bless
you for what you have said and what you have
done. May God keep those men mitil we can
bring them back home in honor and m victory.
Thank you very much.

' BULLETIN of Apr. 10, 1967, p. 595.

40

DEPARTMENT OP STATE BULLETIl

". . . the Middle East is like much of the rest of what is called
tlie Hhird world.'' It is a region of "pronnise and yet of instability.
There are many divisive forces native to the region which fro-
mote v/nrest and intermittent turbulence. . . . Turmoil of this
kind prevents the economic and social progress that might
in the end remaJce the whole environ/ment. If we turn away from
these developments in the third world, the result would be
serious: harm to our friends and to our vital interests.''''

The Middle East Crisis and Beyond

by Eugene V. Rostow

Under Secretary for Political Affairs ^

I thought tonight I should follow the custom
of law schools and discuss the Middle Eastern
crisis with you as a case study in modern Ameri-
can foreign policy. The problems we face in the
IMiddle East are unique in one sense : No region
of the world, no peoples, and no combination of
events can ever be exactly like any others. But
the basic processes of world politics which are
at work m the Middle East are closely related to
those with which we have to deal elsewhere. And
the national interests we are defending there
are those we are defending also in Europe and
in the Far East.

This is hardly the first time we have been
involved in the Mediterranean. Some of the
earliest episodes of our diplomatic and military
history took place in the Mediterranean. Part of
our undeclared war with France in Jolm
Adams' time involved maritime hostilities in
that area. And in the early 19th century we
engaged in a series of undeclared wars with the
rulers of some of the North African states. The
memorj' of those efforts is enshrined, as you all
know, in the song of the Marine Corps, which
recalls our landings on the shores of Tripoli.

But these dramas were at the periphery of
world affairs. We stoutly defended our mari-

' Address made before the Lamar Society of the Uni-
versity of Mississippi Law School at Oxford, Miss., on
Dec. 8 (as-delivered text; for advance text, see press
release 289 dated Dec. 9) .

time rights in the Atlantic and the Mediter-
ranean against blockades and piracy. But other
nations, the leading powers of Europe, were en-
gaged in the central struggles of world politics.
The Napoleonic wars led to the Concert of
Europe — an arrangement for managing the
balance of power which kept the general peace
for a century and organized a world environ-
ment in which we and other small nations could
develop in safety without the need to be actively
concerned in world politics at all, save occa-
sionally to msist on respect for the flag, as we
did in the Mediterranean at the turn of the 19th
centuiy.

Since 1945, however, we live in a new world.
The map of jiower and politics beare little re-
semblance to that of 1900, or even of 1940. The
Concert of Europe has gone the way of
Humpty-Dumpty. The traditional leaders of
European diplomacy were exhausted by two
wars and by the tragedies and follies of the
years between the wars. Step by step, they have
withdrawn from their military positions in
Asia, Africa, and the Middle East, leaving
vacuums behind. Vast new powers and new po-
litical forces have emerged. The Soviet Union,
China, Japan, and the United States are coun-
tries on a new scale. The nuclear weapon is a
fact. The developing countries are moving along
the uncertain road toward political and eco-
nomic maturity. Many of them have achieved
freedom from imperial tutelage since 1945. They

JANTJART 8, 1968

41

are all groping their way toward modernity un-
der conditions of weakness which tempt aggres-
sion. The Commmiist movement achieved new
strength in the aftermath of defeat both in 1917
and in 1919. The Communist countries are no
longer united in a common discipline. But on
some issues they still cooperate. They have
power, energy, and ambition. Separately and as
a group, they thrust outward, probing our de-
fences and testing our will.

Time has transformed the problem of the
balance of power. Equilibrium is now altogether
beyond the reach of the old entente.

We have come to understand, but not quite to
accept, the fact that in the small unstable nu-
clear world in which we have no choice but to
live, the security of the United States depends
on maintaining a tolerably stable balance of
power not merely in the Western Atlantic, in
Europe, and in the hemisphere but in the world
as a whole. And we perceive as well that if the
security of the United States is to be protected,
we are going to have to undertake the major
part of the job ourselves. There is no one else to
take the lead in organizing coalitions for order
and progress. In President Truman's phrase,
"The buck stops here."

This reality has determined both the tasks we
have had to undertake abroad since the war
and the recurrent spasms of domestic political
conflict we have experienced in facing them.

The process of entering the mainstream of
world politics has imposed a crisis of self-
searching on the people of the United States.
The fever comes in cycles. There was a revolt
against the League of Nations after the First
War; resistance to any involvement in the
thirties; political protest against Korea and the
Tnnnan doctrine 20 years ago; and now our
inner conflict over Viet- Nam.

We have been forced to redefine the responsi-
bilities our national security requires us to
undertake in world politics. The effort demands
a confrontation between reality and cherished
concepts of self built up over generations. In
essence, it is a struggle to accept the 20th cen-
tury. In the nature of things, it is a debate be-
tween the present and the past, between facts
and hopes, between reason and feeling. It is a
slow and painful effort, difficult to resolve. All
of us would prefer it if we could to escape into
the past and leave the task of national security
to someone else. But there is no one else.

Tlie Middle Eastern crisis should be viewed

in this perspective — as one among many prob-
lems we have inherited as the consequence of the
withdrawal of Europe, the weakness of many
parts of the third world, and the fervent
ambitions of many schools and sects of
revolutionaries.

The Root of the Trouble in the Middle East

The root of trouble in the southern part, of
the Mediterranean basin is endemic political
and social instability. It is typical of similar
problems in many other parts of the third world.
But in the Middle East and North Africa it is
complicated — and made more dangerous as a
burden to world peace — by special factors of
history, geography, and proximity to Europe.

For centuries the region has not had a stable
and independent political life sustained by its
own inherent strength. Tlie proud ]ieoples of
the area, who have made great contributions to
our common civilization, have been governed by
a succession of imperial regimes. The rise and
fall of alien governments — Turkish, British, or
French — have complicated the effort of the peo-
ples of the Middle East and North Africa to
establish communities which could actively par-
ticipate in the common educational, economic,
and political life of the modern world. The
struggle of the people of the area to achieve
independence has strengthened the spirit of
their nationalism. But their nationalism has
sometimes taken extreme forms and resulted in
jjolitical fragmentation, tempting outside inter-
vention. The temptation to intervene has been
reinforced by the fundamental human, eco-
nomic, and strategic importance of the region.

The United States and nations of Europe have
had close and friendly relations with the peo-
ples and goveinments of the Middle East for
generations. The Middle East linlts three con-
tinents. Its airspace and waterways are vital to
communication between Asia, Europe, and
Africa. And they have fmidamental strategic
significance. The oil resources of the region are
a major factor in world commerce. The power
to deny access to the Middle East and its re-
sources would be a matter of grave concern to
the United States and its allies in Eui'ope and
elsewhere.

The reciprocal relationship between inherent
weakness and the force of real interests led to the
European presence in the region. Until the end
of the Second World War, Britain and France
sought to protect their many interests in the

42

DEPARTMENT OF STATE BULLETIN

area through a system of protectorates and other
devices of control.

Tlie split between America and her allies in
1956 marked our unwillingness to support an
imperialist policy for today's world. In our
view, imperialism is inadmissible in an era
which accepts the principle of national self-de-
termination and independence. In the 20th cen-
tury, imperialism would lead not to stability but
to endless, brutalizing civil war. It would defeat
the goal of order it seeks to fulfill.

U.S. Goal: To Promote a System of Peace

Our policy, on the contrary, has been to pro-
tect our national interest in stability by other
means. We have used our influence in the Middle
East, as we do in other regions of the world, to
promote a system of peace, achieved in collabo-
ration with other nations and sustained with
their consent and support — a system of diver-
sity, in the spirit of the United Nations Charter,
"based on respect for the principle of equal
rights and self-determination of peoples" —
above all, a si'stem of peace. We believe in reach-
ing that goal through political means and on
the indispensable basis of the responsible deci-
sions of the people of the region themselves.

Therefore we have sought to foster an en-
vironment in which the countries of the region
would come to terms with each other and turn
their attention toward cooperative efl'orts neces-
sary for developing their own immense re-
sources. Only such a stable order, rooted in the
region itself and at the same time an integral
part of the world's economy and society, could
deter intervention from without. To assist that
process, we have repeatedly announced our pur-
pose to support the territorial integrity and po-
litical independence of all the states of the Mid-
dle East, with sympatliy and understanding
for all and special favor for none.

Obstacles to Stability and Progress

In recent years there have been three main
obstacles to achieving such conditions of sta-
bility and progress. First, there are bitter di-
visions among the Muslim peoples of the Middle
East; secondly, some Arab states have refused
to accept the creation of Israel and have insisted
on their right to attack its existence ; and finally,
since 19.55 there has been an increasing Soviet
presence in the area, as a military, political,
and economic influence and, above all, as a source
of arms.

I should like to discuss each of these three
factors briefly.

1. Some of the divisions among the peoples
of the Middle East derive from their history.
During the long, slow decline of the Ottoman
Empire, many of the pex)ples of the area lived
under conditions of stagnation, isolated from
the modern world. The drama of Arab libera-
tion during World War I left a legacy of fervent
misunderstandings, haphazard boundaries, and
disappointed expectations. After the First
World War, Ottoman rule was replaced in many
areas by the British and the French, both long
active in the region.

The era of European control came to an
end after the Second World War. The French
lost Syria and the Lebanon and gave up Mo-
rocco, Tunisia, and Algeria as well. Britain's
postwar withdrawal from empire ended her
presence in Cyprus, Aden, Egypt, Jordan,
Palestine, and Iraq.

But the political and military departure of the
Western Powers did little to resolve the divi-
sions among the peoples and governments of
the Middle East and North Africa. They had
had differing experiences under foreign tute-
lage : different levels of education and different
patterns of participation in the work of mod-
ern societies. The movements against foreign
control gave rise to strong nationalist move-
ments throughout the area. But those movements
took many forms. It soon became clear that
the peoples and go\ernments of the region had
different views about how to organize their po-
litical, socia', and economic life.

In Egypt a revolutionary government led by
President Nasser looked to a new pan-Arab
state uniting the whole region. For a time at
least, revolutions in Syria and Iraq and strong
popular support, in other countries made this
prospect seem likely to succeed.

At present, the states of the area represent a
wide spectrum of political forms: There is an
extremist revolutionary government in Syria
and a traditionalist monarchy in Saudi Arabia.
Meanwhile, Iran and Turkey, to the north, are
becoming vigorous modem communities with
close ties to the West. Thus the Middle East has
remained divided, and some parts of the area
are in turmoil.

This state of affairs is hardly surprising. In a
world where the naost advanced teclmological
facilities exist side by side with medieval social
customs and appalling poverty, it is no wonder

JANUARY 8. 1008

43

that there is widespread social and spiritual
dislocation. Moreover, there is a notable lack
of balance between population and resources
among the various Arab countries. The princi-
pal country of the region, Egypt, has a. popula-
tion of 30 million but has up to now developed
almost none of the great oil wealth character-
istic of sparsely settled Saudi Arabia or the tiny
Shiekhdom of Kuwait. Indeed, Egypt, for all
its efforts at economic development, today has
a national income of $150 per capita and difficult
prospects for the future. Even the benefits of so
massive a project as the Aswan Dam are ex-
pected to be absorbed by the rapid growth of
population.

In short, it is not difficult to explain a high
degree of friction and frustration among the
peoples of the region as they struggle to adapt
themselves and their rich traditions to a new
world.

But the inherent difficulties of the task of
modernization are only one dimension of the
troubles of the region; another is the history
of Israel.

2. The modern State of Israel stands as a
tribute to the power of an ideal, the ancient
Zionist dream of a return of the Jews from
their dispersal, revived in modern times by
Theodor Herzl.

Herzl's movement appealed to many Western
Europeaon and American Jews and to many
other Europeans and Americans as well. Start-
ing in the late 19th century, support and sym-
pathy rallied steadily to the Zionist cause.
Waves of East European Jewish refugees, flee-
ing the Russian pogroms of the late 19th and
early 20th century, swelled the Zionist move-
ment and became the backbone of the early
Jewish settlements in Palestine.

In 1917 Great Britain issued the Balfour
declaration. That famous document promised
the Jews a "national home" in Palestine at the
end of the war. The development of this com-
munity, according to the declaration, should not
prejudice the rights of "existing communities
in Palestine." With the British mandate over
Palestine at the end of World War I, Jewish
immigration expanded. Wliile some Arab
leaders welcomed the Jews to Palestine, tension
developed between the two commimities. A new
wave of immigration followed the Second
World War, as the survivors of Hitlerism fled
from Central Europe. The British authorities
struggled to control the flood of immigrants in

the interests of peace between the Arab and
Jewish communities. In 1947, however, the
British Govenunent found the task impossible
and yielded its mandate to the United Nations.
The U.N. tried to mediate ; but in 1947 the Arabs
rejected its partition plan. The result was a war
between the Arabs and the newly created State
of Israel.

Armistice agreements finally concluded the
fighting in 1949, but few people expected these
interim arrangements to become the basis for
stable relations between Israel and its Arab
neighbors. Many questions remained unsettled,
including a final definition of some borders. A
peace settlement was expected to follow soon
after the armistice. In the early 1950's the U.N.'s
Palestine Conciliation Commission brought the
Arabs and Israelis together for negotiations, but
the positions of the two sides gradually became
irreconcilable.

Many Arab spokesmen profess the view
that the establishment of Israel was an injustice
that can never be accepted. They insist that the
Arab states are at war with Israel and that they
have the right, at an appropriate moment, to
join in a holy war to destroy it. The Arab states
do not recognize Israel, exchange ambassadors,
or allow normal trade with it.

On the other hand, many other nations, in-
cluding the United States, have taken a sym-
pathetic interest in the remarkable development
of Israel as a progressive and democratic so-
ciety. They have steadily insisted that, while
they agree with the Arabs on some important
aspects of the Middle Eastern conflict, Israel
has a right to live, and no member of the
United Nations can claim the right to destroy
another.

3. The Russian interest in the Middle East
has many antecedents. After the Second World
War the Soviet Union attempted to gain con-
trol of Greece and Iran and sought the Italian
mandate in Tripolitania. It began to give active
support to Egypt as early as 1955, both in arms
and in economic assistance, notably in connec-
tion with the Aswan Dam project. Through its
arms sales and through its association with
revolutionary parties, it became deeply involved
in the internal politics of Syria, Algeria, and
the other states of the area.

Increasingly massive arms shipments to Arab
states complemented another aspect of Soviet
policy in the Middle East : a growing hostility
toward Israel. Wliile the Soviet Union had

44

DEPARTMENT OF STATE BULLETIN

supported the establishment of Israel in 1948,
it changed its course during the early 1950's
wlien it undertook its ambitious campaign to
gain influence througliout the area. As a matter
of political doctrine at least, hostility to Israel
is a policy in which most Arab states concur. By
siding with the Arabs against Israel, the So-
viet Union allied itself with these passionate
feelings. At the same time and as a result, the
"Western Powers could be identified with Israel,
depicted as a tool of "Western imperialism."
Such a posture could strengthen the radical
leaders, parties, and revolutionary groups of
the region, who hoped to displace moderate
regimes oriented to the West.

Events Leading to the 1967 Crisis

Given these trends, it is hardly surprising
that peace is not the natural state of affairs in
the iliddle East. The process of decolonization
led to the British and French intervention in
Suez, the protracted war in Algeria, and to the
wars still in progress in the Arabian Peninsula.
Among the Arabs, there has been a long history
of a continuing covert struggle, resulting from
time to time in attempted coups and revolu-
tions, as in Syria and Iraq, or in open civil war
and invasion, as in the Yemen. Meanwhile, since
the armistice agreements of 1949, there has been
a smoldering guerrilla war with Israel, a con-
flict that in 1956 and now in 1967 erupted into
full-scale hostilities.

By the middle of 1966 it was becoming clear
that the situation around Israel was heading
for another explosion. Organized bands of ter-
rorists, trained in Syria, were penetrating Is-
rael at an increasing pace, directly and through
Jordan. Their raids caused damage, anxiety,
and major Israeli retaliation. The issue came be-
fore the Security Council twice in the fall of
1966.^ There was no argument about the facts on
either occasion. In the first episode, the Gov-
ernment of Syria boasted of its responsibility.
But even a mild and ambiguous condemnation
of Syria was defeated by a Soviet veto. In
the second case, that of the Israeli retaliatory
raid against Sam'u in Jordan, Israel was rightly
censured.

In the spring of 1967 terrorist penetration of
Israel from Syria increased. Rumors spread
that Israel was mobilizing against Syria. Arab
spokesmen began to taunt President Nasser for

' For background, see Btilletin of Dec. 26, 1966,
p. 969 and p. 974.

his inactivity in the face of the supposed threat
to Syria. President Nasser responded by moving
troops into the Sinai Peninsula and asked the
United Nations to remove the forces that had
patrolled the border between Israel and Egypt
since 1957. The Secretary-General responded at
once, without going through the type of con-
sultations Ms predecessor had indicated he
would midertake before withdrawing the
troops. The United Nations Emergency Force
was suddenly removed, not only from the bor-
der but from the Gaza Strip and Shann-al-
Sheikli as well. Egyptian troops promptly re-
placed them, and President Nasser announced
that the Strait of Tiran would be closed to
Israeli shipping.

At that moment the situation became one of
full crisis. Sharm-al-Sheikh controls access
through the Strait of Tiran to the Israeli port
of Eilat on the Gulf of Aqaba. Since Egypt has
kept the Suez Canal closed to Israeli shipping
in the teeth of two Security Council resolu-
tions, the Strait of Tiran was Israel's only di-
rect opening to Africa and Asia and its most
important source of oil. Closing the strait was
in effect an act of blockade.

Egypt's announcement that it would use
force to close the strait had another set of con-
sequences. In 1957 the United States had taken
the lead in negotiating the withdrawal of Is-
raeli troops from Sharm-al-Sheikh and the
Sinai as a whole. At that time Israel made it
clear that if force were used to close the strait,
it would regard itself justified in responding
with force as an act of self-defense authorized
under article 51 of the United Nations Charter.
This carefully considered formal statement was
noted at the time as part of the process of set-
tlement. The international understanding was
that the Strait of Tiran would be kept open as
an international waterway. The United Arab
Republic, it is true, never took formal responsi-
bility for this understanding, as it refused to
recognize Israel or to deal directly with her.
But in every other sense Egypt was a party to
and beneficiary of this arrangement, through
which Israeli withdrawals had been secured.

As President Johnson remarked later : ^ "If
a single act of folly was more responsible for
this explosion than any other, I think it was
the arbitrary and dangerous announced deci-
sion that the Strait of Tiran would be closed."

' For an address made by President .Johnson on
June 19, 1967, see ibid., July 10, 1967, p. 31.

JANTTABT 8, 1968

45

Throughout this period, President Johnson
directed an active diplomatic effort, Avhich had
started as a matter of urgency many months
before the events of May and June. The goal ot
our policy was to prevent the outbreak o± hos-
tilities and to help deal with the underlymg
cause of tension in the Middle East.

U.S. Diplomatic Efforts

The President's strategy had several essen-
tial elements. .

First, all the parties were urged to retrain
from using force in any way. We attempted to
mobilize world opinion in behalf of peace. Our
views on the nature of the crisis and the dangers
of the use of force were communicated to other
crovernments and made public in a Presidential
statement on May 23.^ We invited Great Britain,
France, and other interested nations to ]Oin
with us in a concerted diplomatic effort to pre-
vent war and then to make peace.

Second, we urgently sought a Security Coun-
cil resolution calling on the parties to heed the
Secretary-General's appeal to exercise restramt,
foro-o belligerence, and avoid all actions which
coutd increase tension.^ But several key nations
refused to take responsibility for a resolution
which might have helped to prevent war.

Third, we tried to initiate a series of talks
with the United Arab Republic in the interest of
finding a basis for a fair and peaceful settle-
ment. The Vice President of that Government,
Mr Zachariah Moheiddin, was scheduled to
come to Washington on June 7th, 2 days after
hostilities broke out.

Meanwhile, as a fourth element in President
Johnson's strategy, we and the British pro-
posed to the leading maritime nations a draft
declaration reaffirming the view that the Strait
of Tiran and the Gulf of Aqaba were interna-
tional waters, through which iimocent passage
could not be denied. The maritime nations had
taken this position in 1947, and it had been up-
held in 1»58 in the International Convention
on the Law of the Sea. The declaration was to
be issued publicly during what turned out to
be the week of hostilities.

While these efforts and others were being
urgently pursued, the situation in the area

*For text, see ihid., June 12, 1967, p. 870.

"For U.S. statements in tlie U.N. Security Council
on May 29, 30, and 31, 1967, see ibid., June 19, 1967,
p. 920.

changed radically. Mobilization and counter-
mobiTization had replaced the closing of the
strait as a threat to the peace. A menacing array
of force was approaching the borders of Israel
from every side. Jordan put her forces under
Egyptian command, and troops from Iraq,
Algeria, and Kuwait joined the Egyptians and
Syrians. President Nasser openly proclaimed
the day of the holy war.

The air grew dry with menace.

The explosion occurred on the morning of
June 5th.®

Principles for Peace in Middle East

President Jolmson immediately^ aimoimced
the policy we have pursued ever since: to end
hostilities as soon as possible and at the same
time to begm the process of seeking to establish
true peace in the area— a condition of peace that
could replace the precarious armistice agree-
ments whose inadequacy has been proved so
often since 1949. .

Our policy of peace to replace the armistice
regime— a true peace based on the responsible
assent of the nations directly concerned— has
far-reaching implications for all the issues be-
tween Israel and her neighbors : for the achieve-
ment of stable and agreed borders, for security
arrangements, and, above all, for the tragic
plight of the Arab refugees, who have been
hoSages to politics for nearly 20 years.

The United States sought an immediate
cease-fire resolution in the Security Council on
the first day of hostilities. But the Soviets and
Arabs did not favor such a proposal. Therefore
the Security Council was imable to agree on
terms. On Tuesday, June 6th, it was at least
possible to obtain cease-fire resolutions from the
Security Council. Further resolutions, demand-
ing compliance with the earlier call for an end
to\ostilities, were adopted on June 7th and

9th.' .

The final acceptance of these resolutions, at
least by Israel, Egypt, Syria, and Jordan,
opened a period of intense discussions, which
have yet to reach a conclusion. The Soviet Union
transferred the problem to the General As-
sembly, a maneuver which delayed the quest for

• For background, see ibid., June 26, 1967, p. 949.
' For U.S. statements and texts of the resolutions,
see ibid., p. 934.

46

DEPARTMENT OF STATE BULLETIN

peace for several months.^ Despite the unceasing
eH'orts of the United States and other govern-
ments to get peace negotiations started, it took
more than 5 months to achieve a Security
Coimcil resolution under which negotiations
might begin. According to the British resolu-
tion, whicli was finally passed, a representative
of the Secretary-General is to start talks with
the parties on the basis of certain agreed princi-
ples stated in the resolution itself.''

These principles follow rather closely those
stated by President Jolmson in his speech of
June lOtli. That address has been generally
recognized as a fair and e\en-handed statement
of the issues and a proper guide to a just and
permanent solution of the Arab-Israeli conflict.

The essential idea of the President's statement
is that the continuation of claims of a right to
wage war against Israel has become a burden
to world jjeace. It is therefore a world responsi-
bility and a responsibility of the parties to
achieve an end to such claims — a condition of
peace in the area. It should be a fair and
dignified peace reached by the parties, not one
imposed by conquest or by the great powei-s. It
should recognize each nation's right to live and
to live in security. And it should rest on the
principle of the territorial integrity and politi-
cal independence of all the nations of the ai'ea.

On the basis of such a peace, the other princi-
pal features of the Arab-Israeli controversy
should be resolved bj' tlie parties through any
procedure on which they can agree. Israeli
forces should of course withdraw to agreed and
secure boundaries, which should replace the
fragile armistice lines of 1948 and 1949. Those
armistice agreements expressly contemplated
agreed boundary adjustments when they were
superseded by arrangements of peace. The
tragic problem of the Palestinian refugees
should at least be solved and solved justly. Guar-
antees should be provided for the use of inter-
national waterways by all nations on equal
terms. The special interest of three great world
religions in the holy places of Jerusalem should

' For U.S. statements in the Security Council and
in the fifth emergency special session of the U.N.
General Assembly, together with texts of resolutions
adopted in the two bodie.s, see ibid., July .3, 1907, p. 3;
July 10, 1967. p. 47 ; July 24, 1967, p. 108 "; July .31, 1967,
p. 14S; and Aug. 14, 1967, p. 216.

' For U.S. statements and text of the resolution
adopted in the Seciirity Council on Nov. 22, see ibid.,
Dec. 18. lt)67, p. 834.

be recognized and protected. Mo unilateral solu-
tion of the problem of Jerusalem can be ac-
cepted. The international interests in this sacred
city are too important to be set aside. Failure to
resolve this crucial problem to the general satis-
faction could well prevent a lasting settlement
in the region. And a start should be made on
agreements of arms limitation for the area,
wliich could protect the world and the peoples
of the region from the risk of another war. An
arms race is a tragic waste of resources for any
country but above all for countries with urgent
economic problems. Moreover, the constant need
for armaments causes nations to compromise the
very independence they have fought so fiercely
to gain and hold. It makes the whole region a
cockj^it for the external rivalries of the great
powers, runs the risk of involving its people in
alien quarrels, and postpones indefinitely the
achievement of internal stability in the region
based on the determination and strength of its
own societies.

Tlie United States has made it unmistakably
clear that it is unalterably opposed to any re-
sumption of hostilities and that its full support
will be given to any procedure which gives
promise of fulfilling the principles of the Presi-
dent's statement of June 19th.

The efl'ort to translate those principles into a
program of negotiation took many months in
the Security Council, the General Assembly,
and the foreign offices of the entire world. Some
of the Arab states and other governments
fought tenaciously in the United Nations for a
resolution that would seek to restore the situa-
tion as it was on June 4th before any negotia-
tions could begin. As the President remarked on
.Tune 19tli, such a policy "is not a prescription
for peace but for renewed hostilities."

On the other hand, the movement from armi-
stice to peace could not condone expansionism.
As President -Johnson said on June 19:

... no nation would be true to the United Nations
Charter or to its own true interests if it should permit
military .success to blind it to the fact that its neigh-
bors have rights and its neighbors have interests of
their own. Each nation, therefore, must accept the
right of others to live.

The Security Council resolution of November
22, 1967, should permit discussions among the
parties for a settlement of the Arab-Israeli war
at long last to begin. It is 5 months late, but it is
nonetheless a welcome and constructive step.
The United States will of course actively sup-

JANUART 8, 196 8

47

port the negotiating process under that
resolution.

But peace between Israel and its neighbors is
only a beginning, though an indispensable be-
ginning, to the task of acliieving a stable and
progressive order in the area — an order resting
on internal stability not external force. The
bitter heritage of the past will not vanish over-
night. The risk of war cannot be exercised until
the environment is transformed by fundamental
changes in the relations of the states and peoples
of the region. Such transformations are occur-
ring m Europe, under the powerful influence of
the ideas and arrangements of the European
Community. Similar efforts have been launched
in other areas of the world — in Central America
and in Southeast Asia, for example.

Like efforts are needed to help the peoples of
the Middle East adapt their societies and econ-
omies to the level of their aspirations. The
Arabs of the area must themselves find the
means to restore the fertile gardens of their
past. In such an area effort they could have no
better partners than the Israelis, their ancient
cousins, who have struggled for centuries to pre-
serve their culture and adapt it to the tasks
of modem life. What a tragedy it would be if
the opportunity for so fruitful a partnership
should be lost in fratricide.

Our Government will persevere in the search
for peace. As President Johnson has said : ^°

If the nations of the Middle East tcIU turn toward
the works of peace, they can count with confidence upon
the friendship and the help of all the people of the
United States of America.

In a climate of peace we here will do our full share
to help with a solution for the refugees. We here will
do our full share in support of regional cooperation. We
here will do our share — and do more — to see that the
peaceful promise of nuclear energy is applied to the
critical problem of desalting water. . . .

But success in such efforts to achieve regional
cooperation — and cooperation between the
region and the rest of the world — can hardly be
taken for granted. It will not be easy for the
Middle East to become a stable and progressive
region, open to the world but free from outside
interference.

Success in that effort cannot be imposed from
without, either by the United States or by any-
one else. We and other friendly nations can dis-
courage the coercive designs of others. We can
and will encourage progressive forces and

"76iU, July 10, 1967, p. 31.

initiatives originating withm the region. We
can hope to see a gradual transformation of the
environment that will turn people away from
the quarrels of the past to the promise of the
future.

The Paradox of Interdependence

In these respects, the Middle East is like
much of the rest of what is called the "third
world." It is a region of promise and yet of
instability. There are many divisive forces na-
tive to the region which promote unrest and
intermittent turbulence. But these internal divi-
sions are frequently fueled from without and
thus prolonged. Tiu-moil of this kind prevents
the economic and social progress that might
in the end remake the whole environment. If
we turn away from these develojiments in the
third world, the result could be serious : harm
to our friends and to our vital interests.

Wliat the world faces, not only in the Middle
East but in the Far East, Latin America, and
Africa as well, is a race between the forces of
order and rational progress and the forces of
discord and retrogression. The problems of
building a stable world order will not go away.
For reasons of security — and reasons of hu-
manity— we must help these troubled peoples
to solve their problems of order and develop-
ment. If we and they fail, we could ourselves
be embroiled in the i-esulting turmoil.

We cannot solve these problems alone. We do
not have the wealth, the power, the wisdom,
or the imperial will to build a world after the
manner of the Romans. Ours is a better vision.
But it requires, above all, that other people
take the principal responsibility for solving
their own problems. We cannot ourselves build
a new order throughout the third world, but
we shall suffer along with the rest of mankind
if that order is not achieved. That is the para-
dox of interdependence in our nuclear world.
If we cannot command an end to the world's
problems, neither can we refuse to do our part
in solving them.

That lesson is hard for Utopians, who wish
to solve all problems immediately or else retreat
in disgust. But it is a lesson that should be
easier for lawyers. None of us should be sur-
prised that nature yields reluctantly to improve-
ment or that the world can be changed for the
better only by the slow, patient advance of
good sense and good habits.

i8

DEPARTMENT OF STATE BOXLETIN

North Atlantic Council Meets at Luxembourg

The North Atlantic CouTwil held its regular
ministerial meeting at Luxembourg December
12-H. Following are texts of the final com-
munique and annex tohich were released hy the
Council at the close of the meeting on December
I',.

Press release 293 dated December 15

TEXT OF FINAL COMAAUNIQUE

The first Ministerial Meeting of the North
Atlantic Council to be held at the new Brussels
headquarters ended on 14th December, 1967.

2. Ministers approved tlie report on the Fu-
ture Tasks of the Alliance, prepared in con-
formity with the decisions taken on 16th
December, 1966 on the initiative of the Belgian
Foreign Minister.^ The report is annexed to
this communique.

3. The Council examined developments in
the mternational situation since their last meet-
ing. Ministers reviewed the efi'orts made by
their governments to improve East/West re-
lations and noted tlic extensive bilateral con-
tacts made in recent months. They expressed
the hope that these eiYorts might lead to prog-
ress in the settlement of outstanding European
problems. Ministers also discussed long-range
policy questions, especially those covered in the
report on Future Tasks of the Alliance.

4. The Council discussed proposals presented
by the "North Atlantic Assembly" of Parlia-
mentarians at their recent meeting for closer
co-operation between themselves and the Coun-
cil. The Secretary General was authorised to
study ways and means for this purpose and to
submit suggestions to the Coimcil.

5. Ministers empliasised the importance of

' For text of a communique and annexes issued at
Paris on Dee. IG. 1966, see Bulletin of Jan. 9, 1967,
p. 49.

promoting progress in disarmament and arms
control, including concrete measures to pre-
vent tlie proliferation of nuclear weapons. The}'
reaffirmed their view that, if conditions permit,
a balanced reduction of forces on both sides
could constitute a significant step towards
security in Europe.

6. The Comicil recalled the views expressed
in tlie declaration on Germany issued on 16th
December, 1966. Ministers emphasised that the
peaceful settlement of the German question on
a basis which would take account of the Ger-
man peoi)le's fundamental right to re-unifica-
tion was an essential factor for a just and last-
ing peaceful order in Europe. In reviewing the
present state of the Geiinan question, INIinisters
were informed by their German colleague
about his Government's increased efforts to im-
prove relations with Eastern European coun-
tries and to promote East/West detente. He
emphasised that it was m tliis spirit that his
Government was also trying to handle the
problems arising from the division of Ger-
many. Considering the difficulties cf reaching
an early solution. Ministers agreed that at
present the only realistic possibility for progress
remained the step-by-step approach advocated
and applied by the Federal Government. With
regard to Berlin, the Ministers confirmed their
declaration of 16th December, 1958.^

7. Ministers noted the Secretary General's
report on his "Watching Brief" and invited
him to continue his activities in this sphere.
They expressed tlieir appreciation of the im-
portant role played by the Secretary General in
reducing the recent crisis concerning Cyprus
and Greek-Turkish relations. They expressed
satisfaction with the agreement between Tur-
key and Greece on the steps being taken to re-
solve the crisis, taking advantage, as appro-
priate, of the actions of the United Nations.

' For text, see ihid., Jan. 5, 1959, p. 4.

JANTJART 8, 1968
285-585—68

49

They reaffirmed their conviction that Turkey
and Greece should, in the spirit of the solidarity
of the Alliance, continue their efforts to facili-
tate a peaceful and rapid solution of the Cyprus
problem.

8. Ministers considered the report on Teclmo-
logical Co-operation prepared in response to
the Resolution adopted on 14th June, 1967 ^
on the initiative of the Foreign Minister of
Italy. They invited the Council in Permanent
Session assisted by competent organs of the
Alliance to continue its studies on the Alliance's
role in the field of technology, mcluding the
possibilities for applying defence teclmology to
civil needs. The aim is to encourage co-opera-
tion between member countries and to contrib-
ute towards narrowing the teclmological dis-
parities which may exist between these
countries. Ministers also invited the Council in
Permanent Session to develop the most effi-
cient and economical ways for co-ordinating
the various activities of the Alliance in the field
of defence technology.

9. Ministers considered and approved a re-
port on Civil Emergency Planning. Stressing
the vital importance of such planning, they
noted the progress which had been achieved
and the tasks which remained to be
accomplished.

10. Ministers met as the Defence Planning
Committee on 12th December 1967, to review the
work accomplished since their previous meeting
on 9th May 1967, and to give directions for fu-
ture work.

11. They agreed that one of the foundations
for achieving an improvement in East/West re-
lations and a peaceful settlement in Europe must
be NATO's contuiumg military strength and
capability to deter aggression. In this connection
they noted that the Soviet Union continues to
expend increasing resources upon its powerful
military forces and is developing types of forces
designed to enable it to achieve a significant
military presence in other parts of the world.
They also observed that during the past year
there has been a marked expansion in Soviet
forces in the Mediterranean.

12. Ministers recalled that at their previous
meeting they had given political, strategic, and
economic guidance to the NATO Military Au-
thorities for the development of an up-to-date
strategic concept and an up-to-date five-year
force plan covering the period up to the end of

' For text, see iUd., July 3, 1967, p. 15.

1972. They adopted the revised strategic con-
cept submitted by the INIilitary Committee fol-
lowing the first comprehensive review of
NATO's strategy since 1956. This concept,
which adapts NATO's strategy to current po-
litical, military, and teclmological develop-
ments, is based upon a flexible and balanced
range of appropriate responses, conventional
and nuclear, to all levels of aggression or
threats of aggression. These responses, subject
to appropriate political control, are designed,
first to deter aggression and thus preserve peace ;
but, should aggression unhappily occur, to
maintain the security and integi'ity of the North
Atlantic Treaty area within the concept of for-
ward defence.

13. Ministers also noted the force commit-
ments imdertaken by member nations for the
year 1968, and for the first time adopted a five-
year NATO force plan, covering the period
1968-1972. They gave directions for the develop-
ment in 1968 of a force plan for the period 1969-
1973 in accordance with the procedures for five-
year rolling planning adopted in December
1966.

14. Ministers devoted particular attention to
the security of the flank regions of Allied Com-
mand Europe.

15. They decided to transform the "Match-
maker" Naval Training Squadron into a Stand-
ing Naval Force Atlantic of destroyer-type
ships. This force, continuously operational,
will enhance existmg co-operation between the
naval forces of member countries.

16. France did not take part in the discus-
sions referred to in paragraphs 10 to 15 and did
not associate herself with the corresponding
decisions.

17. The regular Spring Ministerial Meeting
for 1968 will be held in Eeykjavik.

ANNEX TO COMMUNIQUE

Future Tasks of the Alliance
Report of the Council

A year ago, on the initiative of the Foreign Min-
ister of Belgium, the governments of the fifteen nations
of the Alliance resolved to "study the future tasks
which face the Alliance, and its procedures for fulfilling
them in order to strengthen the Alliance as a factor
for durable peace". The present report sets forth the
general tenor and main principles emerging from this
examination of the future tasks of the Alliance.

2. Studies were undertaken by Messrs. Schiitz,

50

DEPARTMENT OF STATE BULLETIN

Watson, Siiaak. Kohler and Patijn. The Council
wishes to express its appreciation and tbanlis to tliese
eminent personalities for their efTorts and for the
analyses they produced.

3. The exercise has shown that the Alliance is a
dynamic and vigorous organization which is con-
stantly adapting itself to changing conditions. It al.so
has shown that its future tasks can be handled within
the terms of the Treaty by building on the methods and
procedures which have proved their value over many
years.

4. Since the North Atlantic Treaty was signed in
1949 the international situation has changed signifi-
cantly and the political tasks of the Alliance have
assumed a new dimension. Amongst other develop-
ments, the Alliance has played a major part in stopping
Communist expansion in Europe; the USSR has
become one of tlie two \\()rld super jtowers but the
Communist world is no longer monolithic ; the Soviet
doctrine of "peaceful co-existence" has changed the
nature of the confrontation with the West but not the
basic problems. Although the disparity between the
power of the United States and that of the European
states remains, Europe has recovered and is on its
way towards unity. The process of decolonisation has
transformed European relations with the rest of the
world; at the same time, major problems have arisen
in the relations between developed and developing
countries.

5. The Atlantic Alliance has two main functions. Its
lirst function is to maintain adequate military strength
and political solidarity to deter aggression and other
forms of pressure and to defend the territory of mem-
ber countries if aggression should occur. Since its in-
ception, the Alliance has successfully fulfilled this
task. But the possibility of a crisis cannot be excluded
as long as the central political issues in Eurojie, first
and foremost the German question, remain unsolved.
Moreover, the situation of instability and uncertainty
still precludes a balanced reduction of military forces.
Under these conditions, the Allies will maintain as
necessary, a .suitable militar.v capability to assure the
balance of forces, ths'reb.v creating a climate of sta-
bility, security and confidence.

In this climate the Alliance can carry out its second
function, to pursue the search for progress towards
a more stable relationship in which the underlying
political issues can be solved. Militar.v securit.v and a
policy of detente are not contradictory but comple-
mentary. Collective defense is a stabilizing factor in
world politics. It is the neces.sar.y condition for effec-
tive policies directed towards a greater relaxation of
tensions. The way to peace and stability in Europe
rests in particular on the use of the Alliance construc-
tively in the interest of detente. The participation of
the USSR and the ISA will be necessary to achieve a
settlement of the political problems in Europe.

6. From the beginning the Atlantic Alliance has been
a co-operative grouping of states sharing the same
ideals and with a high degree of common interest.
Their cohesion and solidarity provide an element of
stability within the Atlantic area.

7. As sovereign states the Allies are not obliged to
subordinate their policies to collective decision. The
Alliance affords an effective forum and clearing house
for the exchange of information and views ; thus, each
of the Allies can decide his policy in the light of close

knowledge of each others' problems and objectives.
To this end the practice of frank and timely consulta-
tions needs to be deepened and improved. Each Ally
should play its full part in promoting an improvement
in relations with the Soviet Union and the countries
of Eastern Europe, bearing in mind that the pursuit of
detente must not be allowed to spUt the Alliance.
The chances of success will clearly be greatest if the
Allies remain on parallel courses, especially in matters
of close concern to them all ; their actions will thus
be all the more effective.

8. No peaceful order in Europe is possible without a
major effort by all concerned. The evoluticm of Soviet
and East European policies gives ground for hope that
those governments may eventually come to recognise
the advantages to them of collaborating in working
towards a peaceful settlement. But no final and stable
settlement in Europe is possible without a solution of
the German question which lies at the heart of present
tensions in Europe. Any such settlement must end the
unnatural barriers between Eastern and Western
Europe, which are most clearly and cruelly manifested
in the division of Germany.

9. Accordingly the Allies are resolved to direct their
energies to this purpo.se by realistic measures designed
to further a detente in East- West relations. The relaxa-
tion of tensions is not the final goal but is part of a
long-term process to promote better relations and to
foster a European settlement. The ultimate political
purpose of the Alliance is to achieve a just and lasting
peaceful order in Europe accompanied by appropriate
security guarantee.s.

10. Currently, the development of contacts between
the countries of Western and Eastern Europe is now
mainly on a bilateral basis. Certain subjects, of
course, require by their very nature, a multilateral
solution.

11. The problem of German reunification and its
relationship to a European settlement has normally
been dealt with in exchanges between the Soviet Union
and the three Western powers having special respon-
sibilities in this field. In the preparation of such
exchanges the Federal Republic of Germany has regu-
larly joined the three Western powers in order to
reach a common position. The other Allies will con-
tinue to have their views considered in timely dis-
cussions among the Allies about Western policy on
this subject, without in any way impairing the special
responsibilities in question.

12. The Allies will examine and review suitable
policies designed to achieve a just and stable order in
Europe, to overcome the division of Germany and to
fo.ster European .security. This will be part of a proc-
ess of active and constant preparation for the time
when fruitful discussions of these complex questions
may be possible bilaterally or multilaterally between
Eastern and Western nations.

13. The Allies are studying disarmament and prac-
tical arms control measures, including the possibility
of balanced force reductions. These studies will be
intensified. Their active pursuit reflects the will of the
Allies to work for an effective detente with the East.

14. The Allies will examine with particular atten-
tion the defence problems of the exposed areas e.g.
the South-Eastern flank. In this respect the current
situation in the Mediterranean presents special prob-
lems, bearing in mind that the current crisis in the

JANUARY 8, 1968

51

Middle-East falls within the responsibilities of the
United Nations.

15. The North Atlantic Treaty area cannot be treated
in isolation from the rest of the world. Crises and con-
flicts arising outside the area may impair its security
either directly or by affecting the global balance. Allied
countries contribute individually within the United
Nations and other international organisations to the
maintenance of international peace and security and
to the solution of important international problems. In
accordance with established usage the Allies or such
of them as wish to do so will also continue to consult
on such problems without commitment and as the case
may demand.

16. In the light of these findings, the Ministers
directed the Council in permanent ses.sion to carry out,
in the .years ahead, the detailed follow-up resulting
from this study. This will be done either by intensifying
work already in hand or by activating highly special-
ized studies by more systematic use of experts and
officials sent from capitals.

17. Ministers found that the study by the Special
Group confirmed the importance of the role which the
Alliance is called upon to play during the coming years
in the promotion of detente and the strengthening of
peace. Since significant problems have not yet been
examined in all their aspects, and other problems of
no less significance which have arisen from the latest
political and strategic developments have still to be
examined, the Ministers have directed the Permanent
Representatives to put in hand the study of these
problems without delay, following such procedures as
shall be deemed most appropriate by the Council in
permanent session, in order to enable further reports
to be subsequently submitted to the Council in Minis-
terial Session.

President Asks Senate Approval
of U.S. Membership in BEE

Letter of Transmittal'^

To the Senate of the United States :

With a view to receiving the advice and con-
sent of the Senate to accession, I transmit here-
witli a certified copy, in the antlientic French
text with an English translation, of the conven-
tion relating to international exhibitions signed
at Paris on November 22, 1928, together with
two protocols, signed on May 10, 1948 and No-
vember 16, 1966, modifying the convention. The
convention and protocols were signed in behalf
of certain States but not the United States of
America.

The convention established the Bureau of In-

' President Johnson's letter of transmittal and the
accompan.ving documents are printed in S. Exec. P,
90th Cong., 1st sess.

52

ternational Expositions, the "BIE", the purpose
of which is to provide basic rules regarding
international expositions.

The United States has never become a mem-
ber of the BIE mainly because of a concept that
international expositions, or "world fairs" as
they are popularly termed in this country,
should be left to the initiative of private groups
with the principal suppoi-t coming from city
and state governments, and more limited sup-
port and endorsement l)y the Federal Govern-
ment. However, the more the organization of
these complex undertakings is studied the more
the responsibility of the Federal Government
to play an active role in scheduling their ap-
pearance and in defining their basic character
is appreciated.

The subject of international expositions and
the role of the BIE is one that has been care-
fully reviewed in recent years. In 1959 the Sen-
ate Foreign Eelations Committee sponsored a
resolution (SR 169) seeking a study to deter-
mine, among other things, whether the United
States should consider membership in the BIE.
This was at a time when several cities in this
country were contemplating a major exposition
in the mid 1960's.

In May, 1963, the President directed the Sec-
retary of Commerce to develop criteria for an
expositions policy in view of the fact that the
number of cities in the United States with ex-
position plans under consideration had gi'own
to sixteen.

In May, 1964, as a result of interdepartmental
study, the President sent letters to the Secre-
taries of Commerce and State in which he em-
phasized the need to leave 1975-76 open for a
possible Bicentemiial Exposition to commemo-
rate American Independence. In these letters he
instructed the Secretary of State, in attempting
to protect the 1975-76 dates with the BIE, to
determine whether a reali.stic framework
existed for United States participation in that
organization.

In October, 1964, the Department of Com-
merce published in the Federal Register rules
governing official United States assistance to
sponsors of international expositions in the
United States. These rules were designed as a
further means of clearing the horizon for the
Bicentennial. They also clearly identified the
role of the BIE, and the importance of its sanc-
tion, in the organization of international
expositions.

During the past three years, discussions have

DEPARTMENT OF STATE BULLETIN

i

been held with representatives of the BIE on
all aspects of the 1928 Convention and the role
of the Bureau. These discussions indicate quite
clearly that there are no barriei-s to effective
United States participation in the BIE. In addi-
tion, senior BIE officials visited Washington in
September, 1966, for informal discussions with
officials of the Executive Branch and several
Members of Congress.

Following careful review of this matter since
1963 and for the reasons expressed by the Secre-
tary of State, it has been concluded that mem-
bership in the BIE would be in the best inter-
ests of the United States. That conclusion is
confiiTned by the example of Canada, a BIE
member, in staging Montreal's magnificent
Expo 67.

I, therefore, recommend that the Senate give
early and favorable consideration to the conven-
tion, and the two protocols.

Lyndon B. Johnson

The White House
November 28, 1967.

Department Seeks Criminal Penalties
on Travel to Restricted Areas

Press release 291 dated December 11

LETTER FROM ACTING SECRETARY KATZENBACH

December 11, 1967

Honorable John W. McCormack

Speaker of tlie House of Representatives
Washington, D.C.

De^vr Mr. Speaker : I have the honor to trans-
mit a bill authorizing the Secretary of State to
determine that travel to certain foreign countries
by United States citizens should te prohibited
and prescribing criminal penalties for those
who travel in violation of such a prohibition.

This proposed legislation is intended to fill a
gap in existing law. More than two years ago, in
Zemel v. Rusk, 381 U.S. 1, the Supreme Court
sustained the authority exercised by the Secre-
tary of State for over fifty years to endorse
passports as invalid for travel to specified coun-
tries or areas when travel to those regions would
seriously impair our foreign policy. Recognizing
that such a restriction might effectively prevent

travel by American citizens to the area, the
Court found nonetheless that an inhibition on
travel was a constitutionally permissible means
of implementing policies justified by "the
weightiest considerations of national security."

Such considerations of national security are
clearly illustrated by two current examples. At
a time when our military forces are engaged in
protecting South Viet-Nam against aggression
from the North, it would be plainly self-defeat-
ing to authorize imrestricted travel of our
citizens to Xorth Viet-Nam. Travel in these cir-
cimistances provides assistance and support in
derogation of the military effort to which the
nation has turned its energies.

The recent situation in the Middle East is
another illustration of the importance of effec-
tive limitations upon travel of American citizens
in times of extraordinary crisis. Wlien emer-
gency evacuation of American citizens from an
area is required by heightened tensions or armed
combat in that region — as was true of countries
in the Middle East — steps must be taken to keep
other Americans from the crisis area. Experi-
ence has demonstrated that the mere presence
of Americans in a country where passions have
been inflamed against the United States may
result in unintended incidents, and these may
have severe consequences to our foreign policy
and to the safety of the nation.

Until recently it was assumed that the pro-
visions of Section 215 of the Immigration and
Nationality Act of 1952 and the criminal penal-
ties provided therein applied to knowing viola-
tions of geographical passport restrictions in
times of national emergency. In January of this
3'ear, however, the Supreme Court determined
unanimously that Section 215 did not apply to
such conduct {United States v. Laub, 385 U.S.
475; Travis v. United States, 385 U.S. 491).

The Secretary of State has, pursuant to pub-
lished regulations been exercising the authority
to revoke passports of individual violators in
order to prevent repeated violations of area
restrictions. This administrative measure has,
however, proved inadequate to secure the for-
eign policy interests which are at stake. Our law
presently contains no effective and practical
deterrent for violations of travel restraints
deemed necessary in the implementation of our
foreign policy.

The proposed bill accomplishes five objectives :

1. It explicitly grants authority to the Secre-
tary of State, acting pursuant to such policies
as the President may prescribe, to specify for-

JANTJARY 8, 1968

53

eign countries or areas where travel by United
Statas citizens or nationals is prohibited ;

2. It defines tlie limits of that authority ;

3. It establishes a procedure whereby geo-
graphical restrictions are subject to contmuing
examination;

4. It grants authority to the Secretary to
permit travel to restricted areas by those whose
travel is deemed to be in the national interest;
and

5. It prescribes an enforceable and fair
criminal penalty for violations of geographical
restrictions.

Legislation affecting the travel abroad of
American citizens must, of course, take account
of the established constitutional principle that
travel is a "liberty" secured by the Fifth Amend-
ment to the United States Constitution. The
Supreme Court recently sustained a restriction
upon travel to Cuba, however, recognizing that
"the fact that a liberty cannot be inhibited
without due process of law does not mean that
it can imder no circumstances be inhibited." The
proposed bill accords full respect to the constitu-
tionally protected liberty to travel abroad; it
authorizes official restraints on such travel only
in the most compelling circumstances and after
a public announcement of the basis for the
restriction. And by requiring annual re-exami-
nations of the countries to which travel is re-
stricted, the bill ensures that the announced
limitations will be in keeping with current
needs.

It is the Secretary of State's present practice
to authorize certain categories of citizens, such
as professional journalists, scholars or doctors,
to travel to restricted areas notwithstanding
the passport limitations. The proposed bill per-
mits continuation of this practice by specifically
empowering the Secretary to grant exceptions
to the general prohibition for travel which is
"in the national interest."

Finally, the bill imposes a criminal sanction
for unauthorized travel by a citizen to a re-
stricted area irrespective of whether the traveler
uses or possesses a passport, and whether or not
limitations are endorsed in the travel document
he is carrying. The heart of the offense is not
the violation of a passport condition; the
citizen's entry to a restricted area is the act
which jeopardizes our foreign policy. It is
appropriate, therefore, that the statute define
the proscribed conduct directly and not to
relate it to passport restrictions.

I urge the Congress to give prompt and favor-
able consideration to this important legislation.

The Bureau of the Budget advises that enact-
ment of this legislation would be in accord with
the program of the President.
Sincerely yours,

Nicholas deB. Katzenbach

Acting Secretary

Enclosure ; A BUI

TEXT OF PROPOSED BILL

A BILL

To promote the foreign policy of the United States by
authorizing the Secretary of State to restrict the travel
of citizens and nationals of the United States where
unrestricted travel would seriously impair the conduct
of foreign affairs, etc.

Be it enacted by the Senate and House of Represent-
atives of the United States of America in- the Congress
assemhled, That,

(a) Chapter 45 of title 18 of the United States Code,
relating to foreign relations, is amended by adding at
the end thereof the following new section :

"§ 970. Travel in violation of area restrictions.

(a) Subject to such policy or policies as the Presi-
dent may prescribe for carrying out the authority
granted to the Secretary of State by this section,
the Secretary may restrict travel to a foreign country
or area by citizens and nationals of the United States
If he determines that the country or area is

(1) a country or area which is at war,

(2) a country or area where insurrection or armed
hostilities are in progress,

(3) a country or area whose military forces are
engaged in armed conflict with forces of the United
States, or

(4) a country or area to which travel must be re-
stricted in the national interest because such travel
would seriously impair the conduct of United States
foreign policy.

(b) Such restriction shall be announced by public
notice which shall be published in the Federal Register
and shall state the grounds for imposing the restric-
tion. The restriction shall expire at the end of one
year from the date of publication unless sooner re-
voked by public notice issued by the Secretary. Any
such restriction may be extended by public notice by
the Secretary for periods not to exceed one year at a
time.

(c) The Secretary may authorize travel to a re-
stricted country or area by any person when the Secre-
tary deems such travel to be in the national interest.
The authorization shall take such form as the Secretary
shall by regulation prescribe.

(d) Any citizen or national of the United States
who willfully enters or travels in or through any
country or area to which travel is restricted pursuant

54

DEPARTMENT OF STATE BULLETIN

to this section without having received the Secretary's
authorization for such travel shall be imnished by
imprisonment for a period not exceeding one year
or by a fine not exceeding $1,000, or both."

{b) The analysis of such chapter 45, Immediately
preceding section 951, is amended by adding at the
end thereof the following new item :

"970. Travel in violation of area restrictions."

Foreign Area Research
Guidelines Adopted

Press release 297 dated December 19

DEPARTMENT ANNOUNCEMENT

The follo^Ying sidelines have been adopted
by the Foreign Area Research Coordination
Group (FAR) to provide general guidance to
the FAR agencies. These agencies of the United
States Government — 21 in number — seek
through their voluntary association in FAR
"the systematic coordination of government-
sponsored foreign area and cross-cultural re-
search in the social sciences."

These guidelines deal witli two sets of j^rob-
lems: (A) those that arise when a Government
agency contracts with an academic institution
for beha\noral and social science research deal-
ing with foreign areas and international re-
lations and (B) those that arise when such con-
tracts call for the conduct by academic person-
nel of some or all of the research in foreign
countries.

It should be recognized that these guidelines
have been formulated and adopted by Govern-
ment departments and agencies that have a va-
I riety of missions and a great diversity of pro-
grams for supporting research. Thus not every
guideline will have equal applicability to all
research programs of every member agency.
The guidelines are meant to deal with what,
from the point of view of governmen<^-academic
relations, are usually perceived to be the most
troublesome cases of foreign area and foreign
affairs research involving the social and be-
havioral sciences. Typically, those cases involve
a contractual relationship between a policy or
operating department or agency of Govern-
ment and an academic institution in which the
latter undertakes to conduct research which the

former lias determined is pertinent to its policy
or action responsibilities in the foreign affairs
field. Though they may have some applicability,
tlie guidelines were not designed to deal with
consultant relations between an individual
scholar and a Government agency or with non-
contracttuil research grants made by a founda-
tion-like Government agency to academic in-
stitutions or individuals.

In formulating the first set of guidelines
(section A below), FAR members recognized
the importance in an open society of strong,
independent universities. FAR members worked
from the premise that the Government, in
carrying out various foreign affairs mi.ssions
on behalf of an open society, needs to seek con-
tributions from all sectors of American society,
including the resources of knowledge, analysis,
and insight available on university campuses.
The problem — in which the Government, the
universities, and society at large all have a
stake — is for Government agencies to arrange
to draw upon university resources for this pur-
pose without diminishing either those resources
or the status of the universities as centers of in-
dependent teaching and research. This problem
takes on added dimensions when scholars asso-
ciated with American universities go to foreign
countries to carry out government-supported
contract research. Thus the second set of guide-
lines (section B below) is designed to reflect the
desire of Government agencies to avoid adverse
effects on foreign relations as well as concern
with restrictions on the access of American
scholars overseas and increased difficulties in
carrying out many types of
research.

Many of the factors behind these latter re-
strictions and difficulties are not amenable to
government action, and certain of them should
not be. Some stem from the cultural and politi-
cal sensitivities of other nations, especially
newly independent ones. Others derive from the
relative scope, size, sophistication, and affluence
of American social science research, which have
resulted in high concentration in certain coun-
tries and in high visibility of research person-
nel. Still others result from the inadequate
preparation of the researcher himself or from
his personal characteristics. Insofar as the.se
problems lend themselves to solution, responsi-
bility must ordinarily lie with the academic
profession itself. Thus the Government looks
to the academic community to formulate its

foreign area

JANTJART 8, 1968

55

own standards of conduct in performinfr re-
search overseas and welcomes the initiatives
which have already been taken in this regard.
However, the Government recognizes that its
own research programs can sometimes affect not
only official U.S. foreign relations but also the
overseas relationships and access of private
scholars. The role of the Government is there-
fore significant and carries an obligation to in-
sure that government-supported foreign area
research is conducted in ways that reflect favor-
ably on the United States and on the integrity
of American scholarship.

FAR members hope through the promulga-
tion of these guidelines to alleviate some of the
difficulties encountered in government-sup-
ported foreign area research and to participate
with the academic community in constructive
and clarifying interaction. Through the FAR
and similar mechanisms, Government agencies
concerned with foreign area research will try
to strengthen their liaison with the scholarly
community. Wliile the guidelines will neither
solve every problem of relations between gov-
ernment and the academic world nor be appli-
cable to every situation, the process of applica-
tion by individual agencies and discussion with
the academic community should help to illumi-
nate the interests and obligations of the parties
concerned.

TEXT OF GUIDELINES

A. Guidelines for Research Contract Relations
Between Government and University

Al. The government has the responsibility
for avoiding actions that would call into ques-
tion the integrity of American academic insti-
tutions as centers of independent teaching and
research. A large portion of government-sup-
ported contract research carried out by Ameri-
can universities is long-range, unclassified and
of academic interest to the faculties concerned ;
it poses no more serious challenges to academic
integrity than do public and private research
grants. The issues of acknowledgment and
classification may pose problems and are dealt
with below in paragraphs A2 and A3. In addi-
tion, there are certain specialized research
needs — sometimes involving foreign sensitivi-
ties— for which government agencies should
continue to use or develop their own capabilities
or those of nonacademic institutions in order,

among other things, to avoid possible embar-
rassment to academic research personnel and
institutions.

A2. The fact of government research support
should always he aclcnowledged hy sponsor,
university, and researcher. Covert support to
institutions of higher education is contrary to
national policy,^ on the broad and vital principle
that it runs contraiy to the spirit of our mstitu-
tions, and on the pragmatic basis that it may
reduce the reliability and credibility of the re-
search project's conclusions and eventually re-
sult in damage to the reputation of our scholarly
community.

A3. Government-supported contract re-
search should in process and results ideally he
unclassified, hut the practical needs of the na-
tion in the modern world may require that some
portion he subject to classification; the halance
hetween making work public or classified
should incline lohenever possible toward mak-
ing it public. The free flow of ideas is basic to
our system of democracy and to academic free-
dom. There are other reasons why the govern-
ment should make generally available the re-
sults of its contract research ; to do so not only
results in the advancement of learning and pub-
lic enlightenment, but also subjects government-
supported research to the closest possible pro-
fessional scrutiny.

Nevertheless, other responsibilities of the
government sometimes must prevail. Material
which cannot be declassified must sometimes be
used in research required for important pur-
poses. There are other reasons why the use of
confidential limitations is as legitimate a prac-
tice in the government as it is in the private
sector, where the substance of information is
sometimes withheld even when its existence is
known. In exploring alternative courses of ac-
tion, the government often needs research-based
analysis and reflection which, if made public,
could produce serious misunderstandings and
misapprehensions abroad about U.S. intentions.
To abandon restrictions of these sorts alto-
gether would impose serious limitations on the
agencies' use of contract research.

However, to the maximum extent feasible,
agencies should design projects in such ways
that only those poiiions requiring restrictive

' As stated in the report of the committee chaired by
Under Secretary of State Katzenbach which was ac-
cepted by the President on Mar. 20, 1967 (Depnrtnimt
of State BtTLLETiN of Apr. 24, 1967. p. 665). [Footnote
in original.]

56

DEPARTMENT OF STATE BULLETIN

'i

treatment are so treated. If classification is
necessaiy, tlie university is its own judge of
whether or not it wishes to contract for re-
search in this category. In any case, the re-
searclier should always be notified in advance
of entering into the contract if the project is
to be classified or if the results will need to
undergo final review for possible security
classification or administrative control.

A4. As a general rule, agencies should en-
courage open publication of contract research
rew?f.^. Subject to the ordinary canons of con-
fidentiality and good taste which pertain in
I. sponsible privately-supported academic re-
st'urch, and subject to paragraph 3 above, open
publication of research results in government
or private media serves the greatest general
good, both at home and abroad. The best guar-
antee that government-supported research will
be of high quality is to have its results exposed
to peer-group judgment ; open publication is the
most effective means for this purpose. To assure
maximum feasible publication of research re-
sults and to minimize the risk that research
publications will be misconstrued as statements
or indicators of public policy, government agen-
cies should give careful attention to the lan-
guage and places in which their support is
acknowledged and their responsibility for ac-
curacy, findings, intei-pretations, and conclu-
sions asserted or disclaimed. The researcher
should be given a clear understanding of the
agency's position on these matters before enter-
ing into the contract.

A5. Government agencies that contract with
university researchers should consider designing
fJie/r projects so as to advance Jcnoiuledge as
II-, 11 as to meet the immediate needs of policy or
action. Few agencies have as their central mis-
sion the advancement of knowledge for its own
sake or for its general utility. Most agencies that
contract for research look to research — and
rightfully so — for assistance in carrying out
specific missions or tasks in policy or action, in
short, for applications of scholarly knowledge.
It is therefore often assumed that these agencies
consume a tailored product and do not con-
tribute to the nation's intellectual capital.
Consumers they certainly are; however, schol-
ars, as they work on applied problems, may also
collect new data and gain new insights into the
theoretical and methodological strengths and
weaknesses of their scholarly fields; thus they
generate as well as apply scholarly knowledge.

Agencies should entertain research proposals
and encourage research designs which permit
such contributions to basic knowledge to the
maximum degree consistent with the project's
sensitivity and mission-related purpose.

A6. The government agency has the obliga-
tion of informing the potential researcher of
the needs which the research should help meet,
of any special conditions associated with the
research contract, and generally of the agency^s
expectations concerning the research and the
researcher. The researcher has a right to prior
knowledge of the use to which the agency ex-
pects to put his research even though, as in the
case of privately-supported research, no assur-
ances can be given that it will in fact be used or
that other uses will not also be made of it, by
either the supporting agency or others.

Nothing is more conducive to bad relations
between researcher and government agency than
failure to establish mutual understanding in
advance concerning a research project. The best
research designs are often those that emerge
from extensive discussion between potential
contractor and supporting agency; if elements
of the design cannot or should not be completed
until the project is under way, this prospect
should be explicitly acknowledged and pro-
vided for.

A7. The government should continue to seeh
research of the highest possible quality in its
contract programs. As scholars have much to
contribute in assessing the quality of research
designs and the capabilities of colleagues, their
advice should be sought at key stages in the
formulation of projects. Advice can be obtained
through consultants, advisory panels, inde-
pendent review, or utilization of staff scientists.

B. Guidelines for the Conduct of Foreign Area
Research Under Government Contract

Bl. The government should take special steps
to ensure that the parties with which it contracts
have highest qualification'i for candying out
research overseas. Some of the points to be con-
sidered in assessing qualifications are profes-
sional competence, area experience, language
competence, and personal alertness to problems
of foreign sensitivity. Scholars in the same field
or discipline are usually in the best position to
judge the qualifications of a given researcher.
Whenever feasible, consultation with academic
experts should be a part of the process of con-
tracting for foreign area research.

JAKUART 8, 1968

57

B2. The government should work to avert or
minimize adverse foreign reactions to its con-
tract research frograms conducted overseas. All
other things being equal, government-supported
projects are more likely than private ones to be
misinterpreted by both government and non-
government institutions in foreign countries.
Sponsoring agencies should keep in mind that
ordinarily research supported by government
will be held abroad to ha\'e a very practical pur-
pose— often a purpose more immediate and di-
rect than the agency intended, or even imagined.
Thus, some combinations of topic, jilace, time,
and agency support result in sensitivity so great
as to make pursuit of some research projects ac-
tually harmful. Wliile the existing procedures
for review of government-supported foreign
area research projects in the social and behav-
ioral sciences have clarified and alleviated many
of the problems, the supporting agency should
always be on the watch to ensure that its re-
search projects do not adversely affect either
U.S. foreign relations or the position of the
private American scholar.

B3. When a project involves research abroad
it is particularly/ important that both the sup-
porting agency and, the researcher openly ac-
knowledge the auspices and financing of re-
search projects. (SeeparagraphAQ above.) One
source of difficulty for the scholar overseas is
the unfounded suspicion that all American re-
searchers are covertly supported by the U.S.
Government. A policy of full disclosure of sup-
port will help to eliminate the suspicion of all
American research — whether private or govern-
ment, classified or unclassified— and will allow
that which is supported by the government to
be judged on its own merits. If the research is
of such a character, as in opinion sampling, that
the objectivity of its research techniques is sub-
stantially destroyed when respondents know of
the project's auspices, then it is doubly impor-
tant that either the host government or col-
laborating local researchers, or both, be fully
infoi-med about the nature of the project.

B4. The govem.ment should under certain
circumMances ascertain that the research is ac-
ceptable to the host government. In most cases
the open acknowledgment of auspices and fi-
nancing discussed in paragraph B3 is sufficient
to satisfy the interest of the host government in
the research. In some cases it is desirable to take
specific steps to inform the host government. For
example, when the U.S. Government supports a
classified research project involving substantial

field work abroad by scholars associated with
American universities, sufficient infonnation
about the project should be communicated to the
host government to convey a true picture of the
character and purpose of the project. Similar
steps may often be desirable for imclassified
projects which either deal with very sensitive
matters or easily lend themselves to misunder-
standing and misrepresentation.

B5. The government should encourage coop-
eration with foreign scholars in its contract re-
search programs. Cooperation with local schol-
ars not only adds valuable viewpoints to
a foreign area research project, but also goes far
to remove antagonisms and suspicions. This
cooperation must, in large part, be the re-
sponsibility of the American scholars who
carry on the projects, but the government
should, where legislation permits, look favor-
ably upon research proposals that contain pro-
visions for cooperative ventures and should
otherwise seek to facilitate and encourage these
ventures within the limits imposed by local
resources and needs. The supporting agency
should encourage and assist American research-
ers to distribute to those foreign colleagues who
have cooperated in the research copies of open
publications arising fi-om the project. The sup-
porting agency should also consider distribution
of such publications to other interested persons
and institutions in the host country, either di-
rectly through appropriate sections of the U.S.
Embassy or by submitting co])ies to the FAR
Secretariat for transmittal to the Embassy.

B6. Government agencies should cont'vmie to
coordinate their foreign area research programs
to eliminate duplication and overloading of any
one geographic area. Agencies planning projects
will continue to make use of the various FAR
facilities for information exchange and con-
sultation in order to ascertain whether similar
projects have already been completed or are
underway and in order to coordinate with other
agency plans where feasible. Since the prolifera-
tion of American researchers overseas has been
one source of irritation, government agencies
should continue to ensure that their programs
do not arouse foreign sensitivities Ijy concen-
trating too many researchers and research proj-
ects in any one overseas area.

B7. Government agencies should collaborate
toith academic associations on problems of for-
eign area research. Professional scholarly asso-
ciations, both American and international, and
especially those related to specific areas, have

58

DEPARTMENT OF STATE BULLETIN

much experience witli the problems of research
abroad, and they liave an interest like that of the
government in ensuring that research relation-
ships across national boundaries flow smoothly.
Government agencies, thiough such mechanisms
as the FAR, should consult with these associa-
tions on the problems involved to arrive at
mutually agreeable procedures and solutions.

AGENCIES PARTICIPATING IN FAR

Press release 29" (Annex)

Agency for International Development
Arms Control and Disarmament Agency
Central Intelligence Agency
Department of Agriculture
Department of Defense

Advanced Research Projects Agency

Director of Defense Research and Engineering

International Security Affairs

Defense Intelligence Agency

Department of the Air Force

Department of the Army

Department of the Navy

Department of Health, Education, and Welfare

Department of Labor

Department of State

National Aeronautics and Space Administration

National Endowment for the Humanities

National Science Foundation

U.S. Information Agency

Executive Office of the President

National Academy of Sciences (Observer)

Peace Corps (Observer)

U.S. Participation in the U.N.
During 1966

Following is the text of a letter from, Presi-
dent John-son transmitting to the Congress the
annual report on U.S. participation in the
United Xatian-s for the calendar year 1966.^

To the Congress of the United States:

I am pleased to transmit the annual report on
United States participation in the United Na-
tions for the calendar year 1966.

This report documents our continuing sup-
port for the United Nations, and our efforts to
help it move toward the lofty goals set forth in
its Charter.

Its pages reflect encouraging progress in the
effort to further international peace and secu-
rity, economic and social progress, human

rights, and the rule of law among nations. They
also reveal some discouraging setbacks.

One outstanding accomplishment during
1966 was the succe,ssful negotiation of the Outer
Space Treaty,^ which bans weapons of mass
destruction from space and calls for peaceful
cooperation in its exploration and use. By unani-
mous vote, the General Assembly commended
the Treaty and urged all nations to adhere to
it.=

Not all progress made by the United Nations
was dramatic, or widely reported. Within the
U.N. system — as elsewhere — disputes and crises
make headlines, while the quiet works of peace
go largely imnoted. Yet, day by day, in the capi-
tals of more than a hundred nations and in thou-
sands of villages around the world. U.N. rep-
resentatives work with governments and peoples
to carry on man's endless struggle against ig-
norance, hunger and disease. About 80 percent
of the U.N. resources — not including those of
international financing institutions — are used
to promote economic and social development.

To improve these efforts, two particular U.N.
activities during 1966 deserve special attention :

— The United Nations Development Program
completed its first year of operation. Merging
two previously separate agencies, the new or-
ganization is designed to provide a more uni-
form and effective U.N. program of economic
assistance. It is becoming one of the key orga-
nizations for multilateral assistance.

— The General Assembly approved the
charter of the U.N. Industrial Development
Organization, which will help new nations
create industries best suited to their develop-
ment needs.

The General Assembly adopted two covenants
to protect basic rights of mankind. One per-
tained to civil and political rights, the other to
economic, social and cultural rights.^ Their
passage completed a task which the United
Nations set for itself in 1948 with its Universal
Declaration of Human Rights.

In addition. Ambassador Goldberg signed,

^ U.S. Participation in the UN: Report iy the Presi-
dent to the Congress for the Year 19GG (H. Doc. 180,
90th Cong., 1st sess.) ; Department of State publica-
tion 8276, for sale by the Superintendent of Documents,
U.S. Government Printing Office, Washington, D.C.
20402, price $1.50.

' For text, see Bulletin of Dec. 26, 1966, p. 953.

'For background and text of A/RES/2222(XXI)
adopted by the Assembly on Dec. 19. 1966, see ibid.,
Jan. 9, 1967, p. 78.

* For background and texts of the covenant!!, see
ibid., Jan. 16, 1967, p. 104.

JANUARY 8, 196 8

59

on behalf of the United States, the Convention
on the Elimination of All Forms of Racial Dis-
crimination.^ Our signature reflects this Gov-
ernment's commitment to promote the cause of
human rights and the end of racial discrim-
ination.

Race repression still exists, however ; and dur-
ing 1966 the United Nations was intensively
concerned with its manifestation in southern
Africa.

The United States proposed and supported
measures designed to deal with the problem
realistically, peacefully and with concern for
the provisions of the United Nations Charter.
We endorsed the limited economic sanctions
invoked by the Security Council against the
rebel regime in Southern Rhodesia.^ This was
an effort to deal in moderate but responsible
fashion with an emerging threat to the peace in
the region. It is this Government's hope that the
cumulative effect of the sanctions — and of the
aroused international opinion which produced
them — will persuade the Rhodesian regime to
return to constitutional rule.

The United States also supported responsible
efforts to enable the people of the former Man-
dated Territory of South- West Africa to ad-
vance toward self-determination and freedom
from race discrimination.'

We did not, however, join in extreme pro-
posals which we considered unrealistic and con-
sequently harmful to the United Nations and
the achievement of its human rights goals.

One great disappointment during the year
was the failure to find a peaceful solution to the
war in Viet-Nam.

The United States sought unsuccessfully to
obtain action on the problem in the Security
Council.^ It persistently encouraged the Secre-
tary-General and member states to do what they
could to bring about negotiations.

Those efforts have never abated. This nation
continues to search for an honorable settlement
in Viet-Nam. It continues to hope that the
United Nations will make its contribution
toward such a settlement.

Another setback was the failure to prevent
the violence which later broke out in the Middle
East.

Throughout 1966 there was evidence of in-
creased tension in that part of the world. The
Security Council met three times to consider
terrorism and reprisal raids on Israel's borders.^
The United States maintained the position that
the parties concerned should refram from the
use of violence, and instead use U.N. peace-

keeping machinery to seek redress.

As the world was to learn later to its sorrow,
counsels of moderation did not prevail.

Deep differences over the organization and
financing of future peacekeeping operations
continue. The constitutional and financial dead-
lock which had severely hampered the Orga-
nization during 1964 and 1965 no longer stood in
the way of day-to-day operations, but little
headway was made in settling financial prob-
lems for the future. The United States endeav-
ored to seek agreement — and will continue to,
for fundamental issues of peace are clearly
involved.

On other financial matters, the United
Nations made greater progress. In March, I
directed the Secretary of State to help the
Organization achieve the greatest possible
efficiency in the planning and operation of its
programs. Pointing out that the United States
is the largest single contributor to U.N. pro-
grams, I said in that directive : ^^

If we are to be a constructive influence in helping
to strengthen the international agencies so they can
meet essential new needs, we must apply to them the
same rigorous standards of program performance and
budget review that we do to our own Federal programs.

In line with this objective, the General As-
sembly approved recommendations to introduce
a more effective use of funds and better coordi-
nation into its operation.

Our national interest and the high ideals of
our tradition combine in American support of
the United Nations.

Like other U.N. members, we seek to advance
our own interests in this international forum.

But using the processes of persuasion, we also
seek to foster that wide community of interest
among nations which is man's best hope of
establishing peace with honor and jDrogress with
justice.

We shall continue that search in the years
ahead.

Lyndon B. Johnson

The White House, November 15, 1967.

° For a statement by Ambassador Goldberg on Sept
28, 1966, see ihid., Oct. 24, 1066, p. 6.53.

"For background and text of S/RES/232 (1966)
adopted by the Council on Dec. 16, 1966, see ibid., Jan.
9, 1967, p. 73.

' For background, see Hid., Oct. 31, 1966, p. 690, and
Dec. 5, 1966, p. 870.

' For background, see i'bid., Feb. 14, 1966, p. 229.

' For background, see iUd., Aug. 29, 1966, p. 313. and
Dec. 26, 1966, p. 969 and p. 974.

" For text, see iUd., Apr. 11, 1966.

60

DEPARTMENT OF STATE BULLETIN

INTERNATIONAL ORGANIZATIONS AND CONFERENCES

Calendar of Internationa! Conferences ^

Scheduled January Through March 1968

Conference of the Eighteen Nation Committee on Disarmament (to be Geneva Mar. 14, 1962-

resiimed Jan. 18, 196S).

International Conference on Input and Output Techniques Geneva Jan. 8-13

ECAFE Seminar on the Development of Building Materials Bangkok Jan. 8-15

International Coffee Council: 12th Session London Jan. 8-17

ECE Working Group on Acti\-ity and Commodity Classifications . . . Geneva Jan. 8-19

ICAO Panel on Economics of Route Navigation Montreal Jan. 8-19

ECOSOC Commission on Narcotic Drugs: 22d Session Geneva Jan. 8-26

OAS Symposium on Nuclear Energy and Agricultural Productivity . . Vina del Mar . . . Jan. 9-12

OECD Science Policy Committee Paris Jan. 9-12

UNDP Governing Council: 5th Session New York .... Jan. 9-26

ECE Inland Transport Committee: 27th Session Geneva Jan. 15-18

ECE Preparatory Group for Meeting of Senior Economic Advisers . . Geneva Jan. 15-20

Inter- American Committee on the Alliance for Progress: Working Group Washington .... Jan. 15-26

of Government Experts on Financing of Integration.

OECD Special Committee for Oil Paris Jan. 16-17

IMCO Subcommittee on Ship Design and Equipment London Jan. 16-19

IC.\0 Panel on Obstacle Clearance Montreal Jan. 16-31

ECAFE Trade Committee: 11th Session Bangkok Jan. 18-26

OECD Program Committee of Conference on Thermoionic Electrical Paris Jan. 23-24

Power Generation.

ECE Group of Rapporteurs on Automation Geneva Jan. 23-26

OECD Fiscal Committee Paris Jan. 23-26

FAO Consultative Subcommittee of Study Group on Hard Fibers . . . Rome Jan. 23-26

IMCO Subcommittee on Oil Pollution: 4th Session London Jan. 23-26

WHO Executive Board: 41st Session Geneva Jan. 23-Feb. 2

OECD Industry Committee Paris Jan. 24-26

FAO Consultative Committee of Study Group on Jute, Kenaf, and Rome Jan. 29-31

AUied Fibers.

ECAFE Inland Transport and Communications Committee: 16th Bangkok Jan. 29-Feb. 5

Session.

ECOSOC Commission on the Status of Women Geneva Jan. 29-Feb. 19

U.X. Commission on International Trade Law New York .... Jan. 29-Feb. 23

International Commission for the Northwest Atlantic Fisheries: Standing London Jan. 30-Feb. 1

Committee on Regulatory Measures.

IMCO Subcommittee on Bulk Cargoes London Jan. 30-Feb. 2

ECE Experts on the Study of Market Trends and Prospects for Chemical Geneva Jan. 30-Feb. 2

Products: 3d Meeting.

U.N. Legal Subcommittee on Peaceful Uses of Outer Space Geneva January

BIRPI Working Group on a Patent Cooperation Treaty: 1st Session . Geneva January

Ad Hoc Meeting of Food Aid Convention Signatories London January

United Nations Conference on Trade and Development: 2d Session . . New Delhi .... Feb. 1-Mar. 25

IMCO Subcommittee on Tonnage Measurement: 9th Session London Feb. 5-9

' This schedule, which was prepared m the Office of International Conferences on Dec. 15, 1967, lists inter-
national conferences in which the U.S. Government expects to participate officially in the period January-March
1968. The list does not include nmnerous nongovernmental conferences and meetings. Persons interested in those
are referred to the World List of Future International Meetings, compiled by the Library of Congress and available
from the Superintendent of Documents, U.S. Government Printing Office, Washin^on, D.C. 20102.

Following is a key to the abbreviations: BIRPI, International Bureaus for the Protection of Industrial and
Intellectual Property; CCITT. International Telephone and Telegraph Consultative Committee; CENTO, Central
Treaty Organization; ECAFE. Economic Commission for Asia and the Far East; ECE, Economic Commission
for Europe ; ECLA, Economic Commission for Latin America ; ECOSOC, Economic and Social Council ; FAO, Food
and Agriculture Organization ; IAEA, International Atomic Energy Agency ; lA-ECOSOC, Inter-American
Economic and Social Council : IBE. International Bureau of Education ; ICAO, International Civil Aviation
Organization ; ILO, International Labor Organization ; IMCO, Intergovernmental Maritime Consultative Organi-
zation; ITU, International Telecommunication Union; OAS, Organization of American States; OECD, Organiza-
tion for Economic Cooperation and Development; SEATO, Southeast Asia Treaty Organization; U.N.. United
Nations ; UN'DP. United Nations Development Program ; UNESCO, United Nations Educational, Scientifie and
Cultural Organization ; WHO. World Health Organization ; WMO, World Meteorological Organization.

JAXUART 8, 1968 61

Calendar of International Conferences — Continued

Scheduled January Through March 1968 — Continued

ECE Working Group on Population Censuses

ECE Group of Rapporteurs on Safety Provisions

ECOSOC Commission for Social Development

ECOSOC Human Rights Commission

International Commission for the Northwest Atlantic Fisheries: Special
Subcommittee on Finance and Administration.

ILO Governing Body: 171st Session

ECE Working Group on Housing Censuses

ECE Symposium on Factors Influencing the Consumption of Wood-
Based Panel Products.

ECAFE Asian Industrial Development Council: 4th Session

ICAO Limited European and Mediterranean Conference on Rules of the
Air and Air Traffic Control and Communications.

Inter-American Cultural Council

13th International Diplomatic Conference on Maritime Law

ECE Group of Rapporteurs on Customs Questions Affecting Transport .
FAO Conference on Pig Production and Diseases in the Far East ....

FAO/WHO Codex Alimentarius Commission: 5th Session

ECE Committee on Gas

IMCO Fire Protection Subcommittee: 7th Session

IAEA Board of Governors

ECAFE Committee on Industry and Natural Resources: 20th Session .

ECOSOC Statistical Commission

CENTO Countersubvcrsion Committee

UNESCO Special Committee of Government Experts to Prepare Draft

Recommendation on Preservation of Cultural Property Endangered

by Public and Private Works.

IBE Executive Committee: 4.5th Meeting

IAEA Scientific Advisory Committee

8th Inter-American Conference on Social Security

SEATO Intelligence Assessment Committee

General Assembly of the International Institute for the Unification of

Private Law.
ICAO Joint Frequency Conference on North Atlantic Ocean Station . .
ECE Ad Hoc Group of Experts on Air and Water Pollution Arising in the

Steel Industry.

OECD Ministers of Science

ECLA Committee of the Whole

ECOSOC Council Committee on Nongovernmental Organizations . . .

IMCO Maritime Safety Committee: 17th Session

ECE Working Party on the Construction of Vehicles

ITU/CCITT Working Party on Reviewing ITU Teletype Regulations .

IMCO Subcommittee on Safety of Navigation: 5th Session

U.N. International Conference of Plenipotentiaries on the Law of

Treaties.
UNESCO Intergovernmental Oceanographic Commission: lat Meeting

of Coordinating Group for the International Tsunami Warning System

of the Pacific.
OAS Permanent Technical Committee on Ports: Seminar on Container-

ization.

North Pacific Fur Seal Commission and Standing Committee

ICAO Legal Committee

IMCO Legal Committee

UNCTAD Trade and Development Board: 6th Session

WMO Commission for Hydrometeorology: .3d Session

BIRPI Working Group on a Patent Cooperation Treaty: 2d Session . .
6th Annual lA-ECOSOC Meeting at the Ministerial and Expert Level .

Inter-AmericanSpecialCommitteeonLabor Affairs: 4th Meeting . . .

Geneva Feb. 5-9 j

Geneva Feb. .5-9 I

New York .... Feb. .5-Mar. 1 (

New York .... Feb. 5-Mar. 8

Dartmouth, Feb. 7-8 j

Nova Scotia. i

Geneva Feb. 7-Mar. 1 |

Geneva Feb. 12-16 j

Geneva Feb. 12-16 ,

Bangkok Feb. 12-19 !

Paris Feb. 12-Mar. 2 j

Maracay, Feb. 15-22
Venezuela.

Brussels Feb. 18-26

Geneva Feb. 19-23

Bangkok Feb. 19-24

Rome Feb. 19-Mar.

Geneva Feb. 20-23

London Feb. 20-23

Vienna Feb. 20-23

Bangkok Feb. 20-27

New York .... Feb. 26-Mar.

Washington .... Feb. 28-Mar.

Paris February

8
15

Geneva February

Vienna February

Panama City . . . February

Bangkok February

Rome February

Paris . .
Geneva

Mar. 5-22
Mar. 11-12

Paris Mar. 11-12

Santiago Mar. 11-13

New York .... Mar. 11-15

London Mar. 11-15

Geneva Mar. 18-22

Geneva Mar. 18-29

London Mar. 19-22

Vienna Mar. 24-May 28

Honolulu

Mar. 25-28

Bogotd Mar. 25-30

Moscow Mar. 25-Apr. 11

Montreal Mar. 25-Apr. 11

Montreal Mar. 26-29

Geneva Mar. 26-30

Geneva Mar. 26-Apr. 5

Geneva March

Trinidad and March or April

Tobago.

Trinidad and March or April

Tobago.

62

DEPARTMENT OF STATE BCXLETIN

United States Reviews Problems of Control
of Peaceful Uses of Atomic Energy

Statement by Joseph J. Sisco

Assistant Secretary for International Organization Affairs ^

Within the last few days we have passed the
25th anniversary of the first atomic cliain reac-
tion, an event which placed in man's hands the
awesome power of the universe and the awesome
responsibility of using this power for the bene-
fit of all mankind.

The International Atomic Energy Agency
has played an important part in the contin-
uing development of the power of the atom
for peaceful purposes. The United States ex-
presses its appreciation to Dr. Eklund [Sigvard
Eklund, Director General of the IAEA] for
the statement he has made to us today and for
the able leadership he has exercised in the In-
ternational Atomic Energy Agency. The United
States supports the draft resolution submitted
by Argentina, Bulgaria, and Indonesia.^

The history of man is in many ways the
history of his search for the energy he needs
to build a better life. Today he stands close to
realizing his age-old dream of having at his
service all the energy he can use. Already, the
atom is being used by man :

— to produce the energy which illuminates
our cities, drives the machines of industry, and
may increasingly be used to convert sea water
into fresh water ;

I 'Made in the U.N. General A.^sembly on Dec. .5

I (U.S./U.X. press release 228) .

*The draft resolution (D.N. doc. A/L..534), taking
note of the report of the International Atomic Energy
Agency to the General Assembly for the year 106&-
67 (t7.N. doc. A/6679), was adopted without objec-
tion by the Assembly on Dec. 5 (U.N. doa A/RES/2284
(XXII)).

—to improve and increase the supply of food
through new methods of processing and preserv-
ing food, of combating plant and animal disease,
and of carrying out research on the more effec-
tive use of fertilizer and the use of conserva-
tion of water.

— to guard and improve human health
through the use of radiation and radioisotopes
and tecliniques for the diagnosis and treatment
of disease.

The International Atomic Energy Agency
has contributed to the practical application of
knowledge in each of these areas. It has carried
out important programs for the exchange of in-
formation and has provided technical assistance
and training to scientists and teclinicians from
all parts of the world. The United States con-
gratulates the IAEA on the continuing work
it has done in these fields during the past year.

In response to man's increasing knowledge of
the peaceful iises of atomic energy, nuclear
reactoi-s are today being built in almost all
parts of the world. More than 70 additional
nuclear powerplants are planned or under con-
struction in the United States alone. The total
electric output of these plants will equal about
20 percent of all electrical power produced in
the United States today — enough to meet the
requirements of 45 million people. Other nuclear
reactors are being planned and built on almost
every continent of the earth. Although the pur-
pose of these plants is peaceful, the fact remains
that if only a small part of the plutonium they
create was diverted to the making of weapons.

iJANUART S, 1968

63

the dangers of a new arms race throughout the
world would be greatly increased.

By 1970 about a dozen covmtries will be pro-
ducing quantities of plutonium which could
be used by them for nuclear weapons.

As has been noted by Dr. Eklimd, by 1980 the
world will be producing plutonium at a rate of
several hundred kilograms a day — enough to
produce thousands of bombs per year.

The original drafters of the statute of the
IAEA had the wisdom and foresight to couple
two objectives: The first was to promote and
enlarge the peaceful uses of atomic energy ; the
second was to assure that the nuclear materials
mider its safeguards system are used only for
peaceful purposes. One of the greatest achieve-
ments of the Agency has been its progress in
developing the means to fulfill this mandate.

During the past year, the Agency's program
for the development of safegTiards has con-
tinued to shift from theoretical studies to the
development of practical equipment and
techniques.

Tlie Agency has also extended its system by
development of practical procedures for the ap-
plication of safeguards to chemical reprocessing
plants. The first inspection of a chemical reproc-
essing plant was carried out during Augi;st and
September of this year at the Nuclear Fuel
Services plant near Buffalo, New York. The in-
spection demonstrated that the procedures de-
veloped are fully satisfactory and that the
Agency can safeguard fuel reprocessing
facilities effectively.

We note with satisfaction that the Board of
the IAEA approved last September our re-
quest to apply Agency safeguards to bilateral
transfer agreements between the United States
and Colombia, Korea, and Venezuela. There are
now 29 countries which have nuclear facilities
under Agency safeguards. As the Agency's I'e-
port indicates, all existing peaceful nuclear
facilities in Agency member states in Latin
America, the Far East, Southeast Asia, and
the Pacific are or will soon come under Agency
safeguards.

For its part the United States strongly
favors the application of international safe-
guards to all nuclear activities dedicated to
peaceful purposes. This would be a meaningful
contribution to the security of the world and to
the continued development of atomic energy
for peaceful purposes.

As a country with nuclear projects imder

IAEA safeguards, the United States can testify
that these safeguards are fairly and competently
administered, with no interference with the nor-
mal operation of the facility, and that the safe-
guards do not involve undue bm-dens or risks
to the host country.

In a speech last Saturday, on the 25th an-
niversaiy of the first atomic reaction, Presi-
dent Jolmson spoke of the promise of the atom
and of the importance that the United States
places on the successful conclusion of an effec-
tive nonproliferation treaty for nuclear
weapons. On that occasion President Johnson
said : ^

We are trying so hard to assure that the peaceful
benefits of the atom will be shared by all mankind—
without increasing, at the same time, the threat of
nuclear destruction.

We do not believe that the safeguards we propose
in that treaty will interfere with the peaceful ac-
tivities of any country.

And I want to make it clear, very clear, to all the
world that we in the United States are not asking any
country to accept safeguards that we are unwilling to
accept ourselves.

My own country's experience with the IAEA
safeguards has involved both our own nuclear
facilities and our bilateral programs for the j
supply of nuclear fuel to other countries for j
peaceful purposes. The most tangible evidence j
of our satisfaction that the IAEA safeguards
have not hindered our peaceful nuclear pro-
grams is indicated by President Jolmson's an-
nouncement last week. The President announced
that the United States will permit the IAEA to
apply its safeguards to all nuclear activities in
the United States, excluding only those with
direct national security significance, when safe-
guards are applied under an effective nonpro-
liferation treaty.

The plants opened to IAEA inspection and
safeg-uards under this offer will cover a broad
range of United States nuclear activities, both i
governmental and private, including the fuel in '
nuclear-power reactors owned by utilities for
generating electricity, and the fabrication and
chemical reprocessing of such fuel. The facili-
ties opened to inspection will include many
which are among the most advanced and com-
plex of their kind in the world.

Mr. President, there is no greater challenge
faced by our generation than the challenge to

' BULLETIN of Dec. 25, 1967, p. 862.

64

DEPARTMENT OF STATE BTJIiLETIN

devote the power of the atom to the benefit of
man and not to his destrnction. The Interna-
tional Atomic Energy Agency, through its sys-
tem of safeguards, has developed valuable
means to help insure that the atom will indeed
be a blessing and not a curse — and that the new
plants which are now being designed and built
for the peaceful use of the atom will not be
diverted from the purposes of peace for which
they are intended.

I reaffirm here today the determination of the
United States that the power of the atom will
be dedicated not to death but to life.

And — as President Johnson has said — we in-
vite the world's nations to join with us.

Southern Yemen Admitted
to United Nations

, Statement by Arthur J. Goldberg

\ UjS. Representative in the Security Council ^

ilr. President, in turning to the item on the
agenda, my Govermnent cordially welcomes the
application of the People's Republic of South-
em Yemen to become a member of the United
Nations.

We are particularly pleased that the distin-
guished Foreign Minister of Southern Yemen
[Saif al-Dhalai] is with us in this Council
chamber as we perform our very important duty
of passing to the Assembly the credentials of a
new nation. I have had the pleasure of meeting
and talking with the distinguished Foreign
Minister: and I should like to say to him here
publicly in the Council what I have said to him
privately : In our capacity as the host govern-
ment to the United Nations, we extend to you,
Mr. Foreign Minister, the hand of friendship ;
and we of the United States are anxious to do
everything in our power to make your sojourn
in New York and that of your countrymen as
comfortable and enjoyable as possible.

Mr. President, in its application the Govern-
ment of Southern Yemen has declared its inten-
tion to accept the obligations of membership
contained in the United Nations Charter. My
Government, believing that Southern Yemen is
both willing and able to carry out these obliga-

'Made in the Security Cotmcil on Dec. 12 (TJ.S./TJ.N.
press release 235).

tions, will be happy to vote in favor of the
draft resolution which has been tabled.

Like so many of the present members of the
United Nations, now probably a majority,
Southern Yemen has achieved independence in
the course of the worldwide independence move-
ment which is one of the great and hopeful
political phenomena of our age. The birth of
this new nation, like the birth of all new nations,
has not been easy. The fact that it has now been
fully accomplished is a credit to all concerned —
to the people and leaders of the new state, who
have shown their courage and their determina-
tion to be free ; to the United Nations, which has
concerned itself with the problems of this new
state ; and also to the United Kingdom, whose
statesmanship has contributed much to this
historic development.

Like every independent state. Southern
Yemen will face many pi'oblems in the years
ahead. But it has a most substantial asset,
among others, which it brings and will bring to
the solution of these problems. Now, that most
substantial asset is the people of the country. No
asset can be greater than this. Its people, be-
cause of their location on a historic crossroads
of international commerce and travel, have long
been a part of the wide community of nations, in
touch with the cultures and civilizations of Asia,
Africa, and Europe. And they include able and
experienced people in the civil service, in the
educational system, in the military and police
services, in the labor unions, and in the business
community. And this is a very substantial asset
indeed for any new country or old coimtry. And
these people have already made clear their com-
mitment to popular self-government, as indi-
cated in the stated intention of the new govern-
ment of Southern Yemen to draw up a new
constitution based on this great principle.

The United States has longstanding ties with
the people of Southern Yemen, having had offi-
cial representation in the area for over 80 years.
And my Government now looks forward to
developing friendly and mutually beneficial
relations with the sovereign People's Republic
of Southern Yemen. And we wish its people and
its Government godspeed in their new
independence.^

'The Council on Dee. 12 unanimously recommended
that the People's Republic of Southern Yemen be ad-
mitted to the United Nations, and on Dec. 14 the
General Assembly adopted that recommendation by
acclamation.

JAXUAEY 8. 1968

65

TREATY INFORMATION

Income Tax Conventions
Enter Into Force

CANADA

Press release 300 dated December 20

On December 20 the American Ambassador
at Ottawa and the Canadian Secretary of State
for External Affairs exchanged mstraments of
ratification with respect to the supplementary
convention between the United States and Can-
ada,, sifrned at Washino;ton on October 25, 1966,
modifying and supplementing the convention
of March 4, 1942, for the avoidance of double
taxation and the prevention of fiscal evasion m
the case of income taxes, as modified by supple^
mentary conventions of June 12, 1950, and
August 8, 1956.^

The supplementary convention of October 25,
1966, was brought into force by the exchange of
instruments of ratification.

Paragraph 1 of article XI of the 1942 con-
vention'^as modified by the 1950 and 1956 con-
ventions provided :

1 The rate of income tax imposed by one of the con-
tracUng States, in respect of income (other than earned
income) derived from sources therein, upon individ-
uals residing in, or coriwrations organized under the
laws of, the other contracting States, and not having
a permanent establishment in the former State, shall
not exceed 15 percent for each taxable year.

The supplementary convention of October 25,
1966, modifies paragraph 1 by adding paragraph
6 as follows :

6. Paragraph 1 of this Article shall not apply in re-
spect of income derived from sources in one of the Con-
tracting States and paid to a corporation organized
under the laws of the other Contracting State if such
corporation is not subjec't to tax by the last-mentioned
Contracting State on that income because it is not a
resident of the last-mentioned Contracting State for
purposes of its income tax.

^ 56 Stat. 1399 and Treaties and Other International
Acts Series 2347. 3916.

TRINIDAD AND TOBAGO

Press release 301 dated December 21

On December 19 the American Ambassador
at Port of Spain and the Permanent Secretary
of the Ministry of External Affairs of Trini-
dad and Tobago exchanged mstruments of rati-
fication with respect to the convention between
the United States and Trinidad and Tobago,
signed at Port, of Spain on December 22, 1966,
for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes
on income and the encouragement of interna-
tional trade and investment.

The convention was brought into force by the
exchange of instruments of ratification.

Limited in scope, the convention is designed
primarily as an interim measure, pending the
negotiation of a more comprehensive convention,
to pennit corporations of one of the coimtries to
receive dividends from their subsidiary corpora-
tions operating in the other coimtry at a reduced
rate of withholding tax. (A subsidiai7 for this
purpose is a corporation at least 10 percent of
the outstanding shares of voting stock of which
is o\vned by the recipient corporation.) Under
existing internal law of each coimtry, dividends
paid by a corporation of one country to a resi-
dent of the other country are subject to a 30-
percent withholding tax. Subject to prescribed
conditions, the convention will have the effect
of reducing this withholding rate to 5 percent
with respect to such dividends.

In addition to its corporation tax which is
imposed at a rate of 44 percent, Trinidad and
Tobago imposes, under its Finance Act of 1966,
a tax of 30 percent on profits (after payment of
the corporation tax) derived in Trinidad and
Tobago by a permanent establishment of a for-
eign corporation unless such profits are invested
within Trinidad and Tobago. Subject to pre-
scribed conditions, the convention will have the
effect of reducing the rate of this "branch prof-
its" tax to 5 percent in the case of a permanent
establishment of a United States corporation.

In general, therefore, the convention pre-
scribes a 5-percent rate limitation on the tax
that can be imposed by the source country on
dividends derived from sources within that
country to certain corporations of the other
country. It prescribes a 25-percent rate limita-
tion on the tax that can be imposed by the source
country on dividends derived from sources

66

DEPARTMENT OF STATE BULLETIN

within that countiy to other corporations and
individual residents of the other countiy.

In article 5(3) of the convention it is provided
in effect that the convention shall tenuinate on
December 31, 1967, unl&ss the two contractmg
states, on or before that date, agree by notes
exchanged through diplomatic channels to con-
tinue the convention in effect for the following
year. Immediately following the above-men-
tioned exchange of instruments of ratification,
the American Ambassador and the Minister of
External Affaii-s of Trinidad and Tobago ex-
changed notes whereby the two contracting
states agree that the convention of December 22,
1966, shall continue to be effective during the
year 196S.

U.S. and U.S.S.R. Extend
Fisheries Agreements

The Department of State announced on De-
cember 19 (press release 298) that the United
States and the Soviet Union on December 18
concluded an agreement extending for 1 year
the pro-visions of two fishery agreements be-
tween the two countries in the northeastern
Pacific Ocean. Delegations of the two countries
liad reviewed the operation of the agreements
in talks in Washington, D.C., beginning Decem-
ber 7.

The first of these agreements, signed Decem-
l)er 14, 1964,^ established certain areas near Ko-
diak Island, Alaska, in which fishing with
mobile gear would not take place during certain
months of the year in order to reduce incidents
of damage to fixed fishing gear. The second
1 agreement, signed in February of this year,^
established a number of areas of the high seas
off "Washington and Oregon in which Soviet
fishing does not take place in order to permit
laccess of U.S. vessels to certain key fishing
grounds for ocean perch. It also established
areas of substantial total size within the U.S.
(Contiguous fishery zone, particularly near the
Aleutian Islands, in which Soviet vessels are
permitted to fish and/or conduct cargo transfer
joperations.

In considering the agi-eements each side felt
that some modifications were desirable. The
U.S. delegation wanted some expansion of and

additions to the high seas areas in which Soviet
fishing does not take place off Oregon and
Washington, since certain areas important to
the U.S. trawl fisheries are not covered. The
U.S. side also desired, in view of the growing
king crab fisheries in Alaska in areas other than
Kodiak, to add to the agreement some seasonal
protective measures to minimize gear conflicts
in these areas. Also, in view of developments
in the Kodiak crab fishery, the United States
wished to obtain further protection through
both some expansion of the areas closed and
extension of the period of closure.

On the other hand, the Soviet delegation
took the position that tlie concessions the
U.S.S.R. had made had been inadequately com-
jiensated. They therefore wanted certain ad-
ditional areas within the U.S. contiguous fish-
eiT zone in which they could fish and/or con-
duct cargo loading operations.

During the discussions the various viewpoints
were explored at some lengtli but inconclusively.
Consequently, it was decided that the agree-
ments should be continued unchanged for an-
other year. It was understood that since the
king crab quota agreement in the Eastern Ber-
ing Sea would be coming up at the same time,
all three of these agreements would necessarily
be considered together.

The new agreement was signed for the United
States by Donald L. McKernan, Special As-
sistant for Fisheries and Wildlife to the Secre-
tary of State, and for the Soviet Union by
M. N. Sukhonichenko, Deputy Minister of Fish-
eries of the U.S.S.R.^

Current Actions

MULTILATERAL

Customs

Customs convention on containers, with annexes and
protocol of signature. Done at Geneva May 18, IO.'jG.
Entered into force August 4. 10.59.'
Accessions deposited: Israel, November 14, 1967 ;

Romania (with declarations and statements),

November 1, 1967.

'Treaties and Other International Acts Series 5703.
= TIAS 621S.

'For names of members of the U.S. delegation, see
Dep.artment press release 298.
*Not in force for the United States.

rAJTCTART 8, 1968

67

Diplomatic Relations

Vienna convention on diplomatic relations. Done at
Vienna April 18, 1961. Entered into force April 24,
1964 ^
Accession deposited: Spain, November 21, 1967.

Postal Matters

Constitution of the Universal Postal Union with final
protocol, general regulations with final protocol, and
convention with final protocol and regulations of exe-
cution. Done at Vienna July 10. 1964. Entered into
force January 1, 1966. TIAS 5881.
Ratifications deposited: Liechtenstein, October 5,
1967 ; San Marino, October 11, 1967.

Space

Treaty on principles governing the activities of states
in the exploration and use of outer space, including
the moon and other celestial bodies. Opened for sig-
nature at Washington, London, and Moscow January
27, 1967. Entered into force October 10, 1967. TIAS
6347.
Accession deposited: Morocco, December 22, 1967.

Sugar

Protocol for the further prolongation of the Interna-
tional Sugar Agreement of 1958 (TIAS 4389). Done
at London November 14, l!;t66. Open for signature at
London November 14 to December 30, 1966, inclusive.
Entered into force January 1, 1967.^
Senate advice and consent to ratification: December
6, 1967.

Trade, Transit

Convention on transit trade of landlocked states. Done
at New Tork July 8, 1965. Entered into force June 9,
1967.'

Ratification deposited: Hungary (with a reservation
and a declaration), September 20, 1967.

Ratifications exchanged: December 20, 1967.
Entered into force: December 20, 1967.

Cyprus

Convention and supplementary protocol relating to the
avoidance of double taxation and the prevention of
fiscal evasion with respect to taxes on income, signed
by the United States and the United Kingdom at
Washington April 16, 1945 (TIAS 1546), modified by
supplementary protocols of May 25, 1954, and August
19, 1957 (TIAS 3165, 4124), and extended to Cyprus.
Entered into force for Cyprus July 28, 19.59.
Termination: As respects U.S. tax, for the taxable
years beginning on or after January 1, 1968 ; as
respects Cyprus income tax, for any year of assess-
ment beginning on or after January 1, 1968.

Trinidad and Tobago

Convention for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on
income and the encouragement of international trade
and investment. Signed at Port of Spain December
22, 1966.

Ratifications exchanged: December 19, 1967.
Entered into force: December 19, 1967.

Union of Soviet Socialist Republics

Agreement extending the agreement of February 13,
1967, on certain fishery problems in the northeastern
part of the Pacific Ocean ofC the coast of the United
States (TIAS 6218). Signed at Washington Decem-
ber 18, 1967. Entered into force December 18, 1967.

Agreement extending the agreement of December 14,
1964, relating to fishing operations in the north-
eastern Pacific Ocean (TIAS 5703). Effected by
exchange of notes at Washington December 18, 1967.
Entered into force December 18, 1967.

BILATERAL

Canada

Supplementary convention further modifying and sup-
plementing the convention and accompanying proto-
col of March 4, 1942, for the avoidance of double
taxation and the prevention of fl.scal evasion in the
case of income taxes, as modified by supplementary
conventions of June 12, 1950, and August 8, 1956 (56
Stat. 1399, TIAS 2347, and 3916) . Signed at Washing-
ton October 25, 1966.

DEPARTMENT AND FOREIGN SERVICE

' Not in force for the United States.

Confirmations

The Senate on December 15 confirmed the nomina-
tion of Charles E. Bohlen to be a Deputy Under Secre-
tary of State.

68

DEPARTMENT OF STATE BULLETUT

INDEX January 8, 1968 Vol. LVIII, No. U89

Atomic Energy. United States Reviews Prob-
lems of Control of Peiicoful Uses of Atomic-
Energy (Sisco) 63

Canada. Income Tax Conventions Enter Into

Force (Canada, Trinidad and Tobago) ... (iC

China. "A Conversation With the President"

(excerpts from television interview) ... 33

Congress

Confirmations (Bohlen) 68

Department Seeks Criminal Penalties on Travel
lo Restricted Areas (text of letter and pro-
posed bill) 53

President Asks Senate Approval of U.S. Mem-
bership in BIE 52

U.S. Participation in the U.N. During 1966

(Johnson) 59

Department and Foreign Service. Bohlen con-
firmed as Deputy Under Secretary .... 68

Economic Affairs

Income Tax Conventions Enter Into Force (Can-
ada, Trinidad and Tobago) 66

U.S. and U.S.S.R. Extend Fisheries Agree-
ments 67

Educational and Cultural Affairs

Foreign Area Research Guidelines Adopted

(text) 55

President Asks Senate Approval of U.S. Mem-
bership in BIE 52

Europe. "A Conversation With the President"
(excerpts from television interview) ... 33

France. "A Conversation With the President"
(excerpts from television interview) ... 33

International Organizations and Conferences.

Calendar of International Conferences . . 61

Israel. "A Conversation With the President"

(excerpts from television interview) ... 33

Near East

"A Conversation With the President" (excerpts

from television interview.) 33

The Middle East Crisis and Beyond (Rostow) . 41

North Atlantic Treaty Organization

"A Conversation With the President" (excerpts
from television interview) 33

North Atlantic Council Meets at Luxembourg
(final communique and annex) 49

Passports. Department Seeks Criminal Penal-
ties on Travel to Restricted Areas (text of
letter and proposed bill) 53

Presidential Documents

.\iiierica Will Stand Firm in Viet-Nam ... 35

"A Conversation With the President" (excerpts
from television interview) 33

President Asks Senate Approval of U.S. Mem-
bership in BIE 52

L'.S. Participation in the U.N. During 1966 . . .j9

Southern Yemen. Southern Yemen Admitted to
United Nations (Goldberg) 65

Treaty Information

Jnrrent Actions 67

income Tax Conventions Enter Into Force (Can-
ada. Trinidad and Tobago) 66

'resident Asks Senate Approval of U.S. Mem-
bership in BIE 52

■.S. and U.S.S.R. Extend Fisheries Agree-
ments 67

Trinidad and Tobago. Income Tax Conventions
Enter Into Force (Canada, Trinidad and
Tobago) 66

U.S.S.R.

•'A Conversation With the President" (excerpts
from television interview) 33

U.S. and U.S.S.R. Extend Fisheries Agree-
ments 67

United Nations

The Middle East Crisis and Beyond (Rostow) . 41
Southern Yemen Admitted lo United Nations

(Goldberg) 65

U.S. Participation in the U.N. During 1966

(Johnson) 59

United States Reviews Problems of Control of

Peaceful Uses of Atomic Energy (Sisco) . . 63

Viet-Nam

America Will Stand Firm in Viet-Nam (John-
son) 35

"A Conversation With the President" (excerpts
from television interview) 33

Name Index

Bohlen, Charles E 68

Goldberg, Arthur J 65

Johnson, President 33, 35, 52, 59

Rostow, Eugene V 41

Sisco, Joseph J 63

Check List of Department of State
Press Releases: December 18-24

Press releases may be obtained from the OflSce
of News, Department of State, Washington, D.C.
20520.

Releases issued prior to December 18. which
appear in this issue of the Bulletin are Nos. 289
of December 10, 291 of December 11, and 295 of
December 15.

No. Date Subject

*296 12/18 Martin appointed Special Assistant
for Refugee and Migration Af-
fairs to the Secretary of State
(biographic details).
297 12/19 Foreign Area Research Guidelines.

297 12/19 List of agencies participating in
(Annex) Foreign Area Research Coordi-
nation Group.

298 12/19 U.S. and U.S.S.R. extend fisheries

agreement (rewrite).
t299 12/20 Termination of U.S.-Cyprus in-
come tax convention.

300 12/20 Entry into force of supplementary

income tax convention with
Canada.

301 12/21 Entry into force of income tax

convention with Trinidad and
Tobago.

*Not printed.

tHeld for a later issue of the Bulletin.

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DEPARTMENT

OF

STATE

BULLETIN

Vol. LVIII, No. im

January 15, 1968

PRESIDENT JOHNSON'S CHRISTMAS MESSAGE TO THE NATION 79

UNITED NATIONS ENDORSES TEXT OF AGREEMENT ON RESCUE

AND RETURN OF ASTRONAUTS AND SPACE VEHICLES

U.S. /Statements and Texts of Resolution and Agreement 80

U.N. CONDEMNS SOUTH AFRICA'S VIOLATION
OF RIGHTS OF SOUTH WEST AFRICANS
Statement by Ambassador Goldberg and Text of Resolution 92

PRESIDENT JOHNSON VISITS AUSTRALIA, THAILAND, SOUTH VIET-NAM,
PAKISTAN, AND ITALY IN 41/0-DAY ROUND-THE-WORLD JOURNEY 69

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII No. 1490
January 15, 1968

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The Department of State BULLETIN,
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President Johnson Visits Australia, Thailand, South Viet-Nam,
Pakistan, and Italy in 4y2-Day Round-the-World Journey

President Johnson left Washington on December 19 to attend
memorial services for the late Australian Prime Minister Uarold
Holt at Melbourne, Australia. After stopovers at Honolulu and Pago
Pago, the President arrived at Canberra, Australia, on December £1,
lohere he was met by Prime Minister John McEwen and where later
that day he met with the Australian ministers, with President Pah
Chung Hee of Korea, and with President Nguyen Van Thieu of South
Viet-Nam. President Johnson was in Melbourne for the memorial
services on December 22. On December 23 the President made four
stops: at Khorat, Thailand, and Cam Ranh Bay, South Viet-Nam,
where he talked with U.S. servicemsn; at Karachi, Pakistan, where
he met with President Mohaimned Ayub Khan; and at Rome, where
he met with President Giuseppe Saragat and other Italian Govern-
ment officials, and with His Holiness Pope Paul VI. President
Johnson returned to Washington on December 24- Following in
chronological order is the documentation of the Presidents trip.

VISITS EN ROUTE TO AUSTRALIA

Arrival Remarks, Honolulu International

Airport, Hawaii, December 19

White Honse press release (Honoluln, Hawaii) dated Decem-
ber 19

I am glad you have come out here in this
inclement weather to greet us on our way down
under.

Geographically, you are the closest American
State to Australia. You understand, as Aus-
tralians imderstand, the web of ties that makes
the Pacific nations one family.

You knew, before most of your fellow
countrymen knew, that the Pacific is an avenue,
not a barrier.

Long ago you knew how important it was
to have brave friends in the Pacific, friends who
would share the burdens and the opportunities
of freedom.

America had such friends in Australia in

1941 when the clouds of war rose over Pearl
Harbor. We have such friends in Australia
now when a new threat to peace looms over all
of Asia.

Tragically, one of our best Australian friends
has fallen. A leader in the prime of his life has
been taken from his countrymen and from us,
his friends and partners. Harold Holt was a
statesman who believed that Australia's destiny
was bound up with that of her neighbors in the
Pacific.

In the tradition of his great predecessor. Sir
Robert Menzies, Harold Holt called on his
people to meet the responsibilities that freedom
always brings. He asked them to join with the
people of South Viet-Nam, with the people of
the United States, and with five other nations
to turn back the new aggressor in Asia. His
people responded as Australians always have
responded in the hour of need. Their men are
with us in battle at this hour, standing shoulder
to shoulder and side by side with ours.

JANtJAKY 15, 1968

Harold Holt's vision of Asia — and of Aus-
tralia's role there — was not limited to the bat-
tlefield. The end he sought was not military
conquest. It was the building of a new Asia,
where nations with a common interest in peace
might help one another build the foundations
of peace: better lives for their people.

We mourn the loss of this good man, this
brother in arms, this friend in the works of
peace. "What he was cannot be replaced, though
what he built will always endure.

I am going many thousands of miles to join
his countrymen, and leaders from all over Asia
and the Commonwealth, to pay tribute to
Harold Holt. I carry with me the affection and
admiration of the American people for the
people of Australia. And I know that I carry
your deep regret that your fellow citizen of the
Pacific has been taken from us at a critical
hour when the work he shared with us is begin-
ning to bear fruit.

Arrival Remarks, International Airport,
Pago Pago, American Samoa, December 20

White House press release (Pago Pago, American Samoa)
dated December 20

We have enjoyed very much your entertain-
ment this evening. We thank all of you for com-
ing here and giving us this very warm greeting.

We ijrize very highly the friends that we
have here. We recall very vividly when Mrs.
Jolmson and I dedicated the school you had
been generous enough to name in her honor.

I remember many months ago first hearing
of the great success you had made with your
educational TV and how it excited the interest
of many of our people in our counti-y and in
the Congress. I am glad to tell you now that
we are trying to follow in your footsteps. Very
shortly we will set up a public TV of our own.

"Wliat you are doing here in the way of
schools and education is something we are very
proud of, as we are proud of the new hospital
that you will shortly be dedicating.

Governor [Owen S.] Aspinall referred to the
contribution that your men are making in our
armed services. We salute them, and we thank
them.

Our concern always will be with your
health, with your education, and with your
advancement.

We want each of you to know that we do
care, that we are happy that you are makmg
progress. We trust that the good Lord will give
us the strength and the leadership to permit
us to continue to move ahead.

Thank you so much for your wonderful en-
tertainment. I have enjoyed it. I appreciate
your interest in coming here at this late hour.
I thank you all very much.

THE VISIT TO AUSTRALIA

Exchange of Arrival Remarks, Fairbairn RAAF
Base, Canberra, December 21

White House press release (Canberra, Australia) dated De-
cember 31

Prime Minister John McEwen

It is with great sadness in all our hearts that
you come to Australia. But it is for me, sir,
speaking for my government and for the Aus-
tralian people, to say what a tremendous trib-
ute you pay to our colleague Harold Holt, your
friend Harold Holt, your associate Harold Holt,
in making this tremendous journey across the
world to come to Australia to pay your tribute
to Harold Holt.

For this, sir, I thank you for myself, for my
government, and for every Australian.

President Johnson

It is most gracious of all of you to meet us
at this hour, and I thank you veiy much.

I come in sadness on a sorrowful mission — to
pay my personal respects to a man who was my
cherislied friend and who led a nation which is
the trusted friend of the United States.

I bring with me to all the people of Australia
the sympathy of my countrymen, who wish you
to know that your loss is not a loss you bear
alone.

The gathering together, here in Australia, of
leaders from north and east and west tells much
of the kind of man Harold Holt was, of the kind
of leadershijo he brought so freshly and so force-
fully to the community of free nations, and to
the kind of world he was helping to shape.

He was steady. He was courageous. In deed,
as in word, he embodied the resoluteness of the
people he led. He was there when he said he

70

DEPARTMENT OF STATE BTTLLETIN

would be there. He did not move across the stage
of world atl'airs seeking a way out or a way back
from difficult and demanding duty. Harold Holt
moved among us seeking to find and to open the
way ahead toward a saner and safer world.

AVhile his days were cruelly short, his vision
was long. He saw that we had to begm, we had to
begin now, to build a new community in Asia
and in all the Pacific- — a community of nations
dedicated together to the works of security, the
works of progress, and the fulfillment of all
their peoples.

A sense of that community already is coming
into being among us. In the years and genera-
tions ahead, that community will grow and
flourish as common purpose and common en-
deavor become the common cause of the Pacific's
peoples. Other men, other leaders, will carry
that cause forward in this and all the other
lands that rim this great ocean. But history is
going to reserve a very honored place in its
memory for the name and the role of Harold
Holt. At a critical time, it was he who saw the
vision, assumed the leadership, and imbued us
all with a new spirit and a fuller faith.

Mr. Prime Minister, you have lost a leader.
My country and I have lost a friend. The world
has lost a very great man, but we have not lost
and we shall not lose his vision and his
inspiration.

This morning, the hearts of my people in

America go especially to Mrs. Holt and to the

members of the family in their hours of sorrow.

I! We wanted very much to be with you during

this trial.

President Johnson's Meetings With Leaders
of Other Governments, Canberra, December 21

U.S.- Australian Joint Annmmcement

White House press release (Canberra, Australia) dated De-
cember 21

Tlie President and the Prime Minister took
the opportunity this morning, both in the Prime
Minister's office and m a wider meeting in the
Cabinet room, to exchange views on a range of
current matters. As was made clear in advance,
the meeting took the foi-m of conversations
about these matters rather than a formal
conference.

President Johnson Mourns Death
of Prime Minister Holt of Australia

statement by the President

White House press release Oated December 18

The American people are proud of the friend-
ship that they enjoyed with Prime Minister
Harold Holt. We moum him with all the grief
that Australians feel.

It is a cruel tragedy that he has been taken
from us by this terrible accident. For so many
of his days were devoted to guarding a nation
and a world against hazards. His dream was to
bring order and de.sign to man's brightest hopes.
He fought with rare courage, great tenacity,
and always enlightened vision to assure that
men would live safe from peril in the promise of
freedom.

My personal loss is heavy. Harold Holt was
generous with the gift of a warm and a wise
heart. I found comfort in his friendship and
strength in his partnership. He and the i)eople
for whom he spoke were always dependable and
always unshakable. Those blessings of his ex-
ample cannot be removed. They are as eternal
as the sea that has taken this good and gallant
champion away.

Mrs. Johnson and I — and all the American
people — moum his death.

Those present in the Cabinet room included
the United States Ambassador (Mr. [Edward
A.] Clark), Mr. William Bundy and Mr. Walt
Rostow, and on the Australian side the Treas-
urer (Mr. [William] McMahon), the Minister
for External Affairs (Mr. [Paul] Hasluck), the
Minister for Defense (Mr. [Allen] Fairhall)
and the Leader of the Government in the Sen-
ate (Senator [Jolm Grey] Gorton).

The principal topic touched on by the Presi-
dent and the Prime Minister and his colleagues
was Vietnam. Tlie President presented for the
information of the Australian Ministers an ac-
count of the present military situation and polit-
ical and economic development programme in
Vietnam. The Prime Minister assured the Presi-
dent, as he had yesterday assured the Austra-
lian people, that there will be no change in
Australia's commitment to stay steadfast with
the Republic of Vietnam and the United States
and with other Allies in Vietnam until a just
peace is won.

JANtTART 15, 1968

71

V.S.-Korea Joint Statement

White House press release (Canberra. AustraUa) dated
December 21

President Pak Chung Hee of the Republic of
Korea and President Lyndon B. Johnson of the
U S A. met for informal private discussions at
lunch today. Members of their governments and

staffs were present. j c„u„

President Pak described the agent and sabo-
tage activities being conducted against his coun-
try by the regime in North Korea and the
iSasures being taken to ensure that this threat
continued to be dealt with effectively.

President Pak also conveyed the thanksot
his government for U.S. emergency food assist-
ance to meet the drought crisis of recent months
in Korea, and for the continuing economic de-
velopment assistance being provided. He de-
scribed the economic gains that the Republic of
Korea continued to make at high growth rates
The two Presidents exchanged views on all
aspects of the Vietnam situation, reaffirming
their respective policies of strong and unswerv-
in<r support for the independence of South Viet-
nam and the freedom of its people to determme
their futui-e without external interference.

U.S.-South Viet-Nam Joint Statement

White Honse press release (Canberra. Australia) dated
December 21

President Nguyen Van Thieu of the Republic
of Vietnam and President Lyndon B. Johnson
of the United States held an informal working
dinner this evening, both being present m Can-
berra for the memorial service for the late Prime
Minister Harold Holt.

There was a full exchange of views on all as-
pects of South Vietnam's struggle to defend its
freedom from external force. _

The military situation was reviewed and
found to show good progress.

Progress was also noted in the work of pacib-
cation and of economic reconstruction with the
intention that this could be speeded up m the
coming months.

President Johnson congratulated President
Thieu on the completion of a constitution, the
holding of successful national elections, and the
installation of a constitutional government.

It was recognized that many problems re-
mained to be overcome and President Thieu out-
Imed the plans of his government to deal with

these problems along the lines of his maugural |
speech and the later program presented to the I
people of South Vietnam by Prime Mmister
[Nguyen Van] Loc. . , . .•

Both Presidents agreed that their objective
remained an honorable and secure peace in ac- j
cordance with the basic statement of the South [
Vietnamese position contained in the Manila ,
commvmique of October 1966 ^ and supported |
by the other participants. They regretted that |
there was no sign that North Vietnam was pre- \
pared to take any of the many avenues to peace j
that had been opened. They agreed that in these i
circumstances there was no alternative to con-
tinuing appropriate military actions. _ j
President Thieu once again explained his gov- |
ernment's policy of reconciliation enunciateci at i
Honolulu in February 1966.== In the light of elec-
tions which subsequently have taken place, he
noted that the Government of Vietnam is now ;
prepared to grant fuU rights of citizenship to |
those now fighting against the government who j
are prepared to accept constitutional processes >
and to live at peace under the constitutionally
elected government. i

President Thieu likewise reaffirmed a willing-
ness to discuss relevant matters with any m- I
dividuals now associated with the so-called I
National Liberation Front while making clear ,
that his government could not regard the Front I
as an independent organization in any sense.
He noted that it was not useful to attempt
constructive discussions with any elements ,
in South Vietnam committed to violent
methods to obtain their political ends. Not-
ino- press comment on President Johnsons
fiv^'e points as stated in his television broadcast
of December 20,^ President Thieu affirmed that
they were fully consistent with a policy on
which the Government of Vietnam and the Gov-
ernment of the United States have long a^eed.
President Johnson stated the intent of the
United States to continue its support for this
policy of national reconciliation. _ .

Both Presidents agreed that the basic prmci-
ple involved was the right of the South Viet-
namese people to determine their own future
throu<^h democratic and constitutional processes
noted'in the principle of one man-one vote.

' BuixETiN of No V. 14, 1966, p. 730.

•For background, see iUA., Feb. 26, 1966, p. 302.

' lUd., Jan. 8, 1968, p. 33.

72

DEPARTMENT OF STATE BTTLLETIK

They further agreed that the removal of ex-
t«mal interference and the acceptance of this
principle by all citizens of South Vietnam were
fundamental elements in an enduring and hon-
orable peace in South Vietnam. They agreed
that these elements were totally consistent with
the spirit and essential terms of the Geneva
Agreements of 1954 and the Geneva Agi'eements
of 1962 respecting Laos.

VISITS TO THAILAND AND SOUTH VIET-NAM

Remarks to U.S. Combat Pilots, Royal Thai Air
Force Base, Khorat, December 23

White House press release (Khorat, Thailand) dated Decem-
ber 23

Gentlemen, I apologize for coming so early.
I am deeply moved by your welcome, and I
thank you very much.

On yesterday, it was my sad duty to cross the
Pacific to the capital of a great and faithful
ally to pay my last respects to a man who was
my friend and your friend, too — the late Prime
Minister of Australia Harold Holt. As I said
to his countrymen, Harold Holt was courageous
and he was steadfast, he was there when he said
he would be there — and that is the kind of leader
the cause of freedom requires.

On tomorrow, I will return to Washington,
but I could not come so near without coming on
here to be witli all of you, even for a very short
time. I know that, at this season of the year espe-
cially, I bring with me the love of your families
and the affection of your friends, who are think-
ing of you, who are all praying for your safe-
keeping every waking hour. I bring with me,
also, the gratitude of the Nation you serve so
honorably, so loyally, and so well.

But I come to this American Air Force
Base — on the soil of a gallant and independent
nation — to express to each of you the respect,
the admiration, and the abiding affection held
for you by your Commander in Chief. Our na-
tion has never been more ably or honorably
served than by all the men who are serving
here.

I especially want to tell you of the very great
importance of what all of you are doing to
shorten the war.

In the history of air power no such difficult

set of tasks has ever been assigned as those as-
signed to you and those assigned to your com-
rades in the Army, the Navy, and the Marines.
Guerrilla combat provides no easy targets. That
is why aggressors, here as elsewhere, have been
tempted to choose guerrilla tactics as the means
of their aggression. Yet here, for the first time,
airpower is actually depriving the aggressor of
his advantage.

Through the use of airpower, a mere hand-
ful of you men — as military forces are really
reckoned — are pinning down several hundred
thousand — more than half a million — North
Vietnamese. You are increasing the cost of in-
filtration. You are imposing a very high rate of
attrition when the enemy is engaged, and you
are giving him no rest when he withdraws. Air-
power is providing the mobility which meets
and matches the stealth of an enemy whose tac-
tics are based on sudden hit-and-run attacks.

Woi'king with the Vietnamese and our other
fighting allies, we are defeating this aggression.
We are doing it with a proportion of forces at
least half that usually required to cope with a
guerrilla enemy of such size. The use we are
making of airpower in all its forms is a major
reason the plans of the enemy are now doomed
to complete failure.

It is a factor of utmost importance to the fu-
ture of the peace of Asia — and for that matter,
the peace of the world — that aggressors never
again will be able to assume that aggression
through brutal and sadistic "wars of national
liberation" will ever be either economic or suc-
cessful.

Airpower is denying aggression access to
cheap success or to ultimate victory.

Whether men fly B-52"s, light spotter planes,
fighter bombers, helicopters, sea-and-air rescue,
the tankers, or the reconnaissance — whether
they serve in the cockpit or on the ground, in
communications or in supply — whether in the
Air Force, the Army, the Navy, or the
Marines — your Commander in Chief salutes
you, each of you, one and all. You are manifest-
ing a courage and skill, a discipline and a re-
straint, an imagination and a patriotism which
adds to our admiration and our esteem every
day. I know, as I am sure you know, that your
missions are bringing closer every week the
time of peace for which we and all of your
coimtrymen pray each day.

JANUARY 15, 1968

73

I am glad I can be with you early this morn-
ing, as I am with you every single day of every
month in spirit.

I cannot promise — and you above all others
know that no man rightly could promise — that
the way ahead will be easier or that our tasks
we may soon lay down.

To this generation of Americans, much has
been given. Of us all much is asked. We shall
know other great trials. We shall be faced by
other great tasks. The life of free men is never
again going to be a life of ease. It is not ease,
though, that we Americans seek. It is justice
and peace in a world where aggression is denied
its victory and oppression is deprived of its
dominion.

Let no man in any other land misread the
spirit of America. The spirit of America is not
to be read on the placards or the posters. It is a
spirit that is manifest in the steadfastness and
the resolve of a nation that is holding firmly and
faithfully to its course.

No man can come here for even a short period
and shake your hand or look you in the eye and
l\ave the slightest bit of doubt for a moment
that America is going to hold firm and that
America is going to stay faithful throughout
the course until an honorable peace is secured.

From our course, none of us shall ever turn.

So as I meet you and greet you and leave you
this morning, I say on behalf of your families
and your friends, on behalf of all the American
people and our allies and freedom- and liberty-
loving peoples everywhere, God bless you, God
keep you, every one of you.

We shall always be deeply in your debt. Thank
you and good morning.

Remarks to U.S. Senior Unit Commanders,
Cam Ranh Bay, December 23

White House press release (Cam Ranh Bay, South VIet-Nam)
dated December 2.S

Gentlemen, I don't want to take too much of
your time.

I came here this morning to tell you what
your families and your loved ones would like
to tell you; that is, we want you home for
Christmas. We wish you could be there.

We are very proud that you are doing the job
that you are doing. We know that no military
force is any better than the man at the top.
Everybody in our countiy, and the world, has
great respect and confidence in General [Wil-

liam C] Westmoreland. He has assembled here
this morning the men that make him what he
is — the men who support him and the men who
give him the substance and sustenance that per-
mits him to do the job that he does. We are so
very proud of you.

The leadership you have given has been un-
equaled. General Westmoreland tells me that
the men who you have produced and the men
who you lead have never been excelled. That in
itself ought to give you great satisfaction.

Your cause is just. Your objective is peace.
The day is not far away when you will succeed.
I wish I had things in as good shape at home
as you have them here.

All I can say is we have set our course. We are
not going to yield. We are not going to shimmy.
We are going to wind up with a peace with
honor which all Americans seek. Then we will
come home and spend a happy Christmas again
with our loved ones.

My wish is that you could be with us. Your
Commander in Chief is veiy, very proud of
you. I wish I could personally show you that
admiration and that affection I feel for the
gallant men who lead the best military force
ever put on the battlefield. But please know that
we are with you. We are for you. We will be
there until the end.

Thank you very much.

Remarks to U.S. Service Personnel,
Cam Ranh Bay, December 23

White House press release (Cam Sanh Bay, South Vlet-Nam)
dated December 23

I hope that all of you will stand at ease.

This week I traveled halfway aroimd the
world to come to this section of the world to pay
tribute to an old friend — the late Prime Minis-
ter Harold Holt of Australia.

I made that long trip for deeply personal
reasons. Prime Minister Harold Holt was a
close and a trusted friend.

I made that trip also for our country — and
for you. For it was Harold Holt who led
Australia into the fight for freedom that is
taking place here in South Viet-Nam. It was he
who asked his people to live up to their re-
sponsibilities and to meet them in Asia — ex-
actly as you are meeting ours : with blood, with
sweat, and with bravery.

Last night I sat and talked until after mid-
night with our gallant airmen in Thailand.

74

DEPARTirENT OF STATE BULLETIN

TIlis is not the shortest route back to the Wliite
IIou^:e from Australia — through Viet-Nam. But
it is ahnost Cliristmas and because my spirit
would be here with you anyway, I had to come
over here this morning.

I wish I could have brought you something
more than just myself.

I wisli I could have brought you some tangi-
ble symbol of the great pride that the American
people feel in you, back home.

I wish I could have brought you some gift
that would wrap up the care and the concern
of your families and your loved ones.

All the debate that you read about can never
obscure that pride. The slogans, the placards,
and the signs cannot diminish the jjower of that
love.

You Mill all know that personally when you
put your feet back on America's shores — all of
you, God willing.

I wish I could have brought you, too, some
sign that the struggle that you are in will soon
be over — some indication from the other side
that he might be willing to let this suffering
land finally heal its wounds.

I can bring you the assurance of what you
have fought to achieve : The enemy cannot win,
now, in Viet-Xam. He can harass, he can ter-
rorize, he can inflict casualties — while taking
far greater losses himself. But he just cannot
win.

I can bring you something more: news of a
victoiy that is being won not on a battlefield
but in the cities and the villages all over Asia.
I was stimulated and glad to hear what dis-
tinguished Vice President [Nguyen Cao] Ky
told me of the progress that they are making,
and in the days ahead what they expect as a
result of the planning and the efforts that the
new government is making.

It is a victory of confidence. Because of what
you and our gallant allies are doing, men
throughout Asia are also beginning to feel con-
fident that the future belongs to them — the fu-
ture belongs to those who love peace.

The greater that confidence, the more seciire
this vast region of the world will become, and
the greater will be our children's chances to live
in peace and to live in security.

Because of what you men are doing here to-
day, you may very well prevent a wider war, a
greater war, a world war III.

You have come a long way from your homes
to fight for a decent world.

There must have been times when you wished
that this cup might pass from you — that it
might have come in some other place, at some
other time, or to some other generation.

But it didn't. It came here, and it is with us
now.

You have taken it with your chins up and
your chests out. You have taken it with courage
that makes all of your countrymen proud of
you.

This Christmas, like many Christmases that
we have known, comes at a time of great testing
for our nation. This time it is a test of will :
whether we have the vision and the steady hand
to see us through a grave challenge to our free-
dom and our liberty. You have met that test.
There is no doubt about it.

The last thing that I can bring to you is the
promise that your fellow Americans are going
to meet that test, too. They may need your help.
Sometimes we seem almost frail and weak com-
pared to you sturdy, strong men who are mak-
ing the sacrifices here. But I can tell you we
shall not fail you. What you have done will not
have been done in vain.

I pray that you will be strengthened, this
Christmas day in wartime, by the love of your
loved ones and your people, by the great confi-
dence that you are inspiring in other people,
and by your own great steadfast courage.

I know that just being here among you, walk-
ing down your hospital corridors, riding on the
back of your jeep — I know that gives me
strength — and I need all I can get. For that
strength that you have given me, I am very
grateful to each of you.

Now may God bless you and may God keep
each of you.

Each of you, when you return, will wear the
badge of honor that the greatest Republic in
the world can confer.

This morning, as I went along the hospital
beds and distributed the Purple Heart, to dozens
who had given their limbs and their bodies in
line of battle, as I marched down the rows with
the Distinguished Sersnce Crosses and the Sil-
ver Stars and passed them out to your leaders,
I remembered so vividly what General West-
moreland had told me when I was here the last
time.

He said, "Mr. President, there are here in
Viet-Nam assembled the best armed forces that

JAXUARY 15, 19G8

75

any commander in chief ever commanded in
all the history of the world."

This is clearly supported by the results that
have been achieved since the dark days of 1965.

The distinguished Vice President this morn-
ing reminded me, notwithstanding all the com-
plaints we hear, just how far we had come from
the valleys and the depths of despondency to
the heights and the cliffs, where we know now
that the enemy can never win.

But the oldest and most firmly grounded
military maxim is tliis : A military force is only
as good as the quality of its leadership at the
top.

Now that I have walked among you, in the
hospitals and out on that concrete, I am going
to ask you to indulge me a moment while I pay
tribute to that leadership.

Our leaders have had to meet an enemy that
is hardened by experience of over 20 years
of fighting — an enemy using his knowledge of
the terrain to strike, to move, and to strike again.
We have come from way behind.

All the challenges have been met. The enemy
is not beaten, but he knows that he has met his
master in the field. He is holding desperately —
he is trying to buy time — hoping that our na-
tion's will does not match his will.

For what you and your team have done. Gen-
eral Westmoreland, I award you today an Oak
Leaf Cluster to the Distinguished Service
Medal you have already proudly earned.

But leadership in modern war requires a
team, not just one man of great quality.

The military team that your Commander in
Chief has selected and has dispatched to Viet-
Nam represents the best I can find in the entire
United States.

Now I take the greatest pride in awarding
also to General Creighton Abrams the Distin-
guished Service Medal. General Abrams, the
quality of your service has rarely been equaled
and never excelled.

Now the Distinguished Service Medal

— To General Bruce Palmer, who has served
us honorably and with great efficiency;

—To that leader in the skies, General Wil-
liam Momyer, who paves the way and saves
you fellows a lot of problems;

— To Admiral Kenneth Veth ;

—To Admiral "Bush" Bringle.

I shall present to you later your individual

citations; for the contribution of each of you
has been unique as well as distinguished.

I am very proud — as all Americans can be
proud — of the very complete and intimate col-
laboration. General Westmoreland and your
team, between the military and the civil arms
of policy here at the front. Even as the enemy
is being met, a nation is also being built — a new,
modern nation is emerging. Of this, we are very
proud. For this, we are grateful.

In the civilian team now in Viet-Nam we
have men who fully match the quality of our
military leaders. These men have demonstrated
wisdom and dedication, tougliness and compas-
sion, imagination and efficiency.

Tlierefore, to you. Ambassador [Ellsworth]
Bunker — for the second time in your most dis-
tinguished career — your President awards you
the Medal of Freedom.

I award the Medal of Freedom to Ambassa-
dor Eugene Locke, your loyal and energetic
deputy, who is unavoidably not here today.

I award the Medal of Freedom also to your
able Ambassador Robert Komer, who has pio-
neered a unique experiment in serving under a
military commander to unify all our civil assets
in the task of pacification — which is simply
another name for nationbuilding.

These citations will be presented to you per-
sonally at an appropriate time.

Now to all of this marvelous team of Ameri-
cans, military and civilian alike, and to every
gallant man who is out here this morning and
to all those who are not privileged to be here —
I want you to carry to them a message.

Say to them: You and they have the grati-
tude of your nation and the pride and apprecia-
tion of your President.

God bless each of you.

God keep you all.

Tliank you.

U.S.-PAKISTAN JOINT STATEMENT
KARACHI, DECEMBER 23

White House press release (Karachi, Pakistan) dated Decem-
ber 23

On the occasion of President Johnson's re-
fueling stop at Karachi, President Ayub joined
him for a discussion which covered both bi-
lateral matters and issues of common concern
on the world scene.

76

DEPARTMENT OF STATE BULLETIN

President xVyub outlined the rapid progress
beinjr made in agricultural as well as industrial
development in Pakistan. The two Presidents
discussed Pakistan's additional needs of wheat
and vegetable oils and agreed to ask a staff
study to be made available at an early date.

President Johnson congratulated President
Ayub on Pakistan's continuing progress, and
especially for the success of Pakistan in intro-
ducing new wheat strains, expanding human
consumption of maize, and expanding both ir-
rigation and chemical fertilizer application.

President Jolmson expressed gratification at
the inauguration of the Jlangla Dam and the
prospects for other such projects.

The two Presidents then reviewed the world
situation with special emphasis on the possi-
bility of moving toward peace in Vietnam.

President Johnson conveyed his impression
of discussions earlier that day in Vietnam and
earlier in Australia with several Asian leaders.

Both Presidents shared the deep hope that
peace would soon be achieved in Vietnam, and
agreed that every avenue should continue to be
explored.

THE VISIT TO ROME, DECEMBER 23
Arrival Remarks

White House press release (Rome, Italy) dated December 23

It is a miracle of the age that within the space
of 414 days I will have circumnavigated the
globe. But it is a tragedy of the time that sad-
ness is swifter than flight.

In Australia I listened in grief to the cathe-
dral hymn that sang the memory of a brave
friend and ally.

In Viet-Nam, I saw the strong, clear faces
of young Americans who must spend a part of
their youth in battle to find a peace for us.

But now I am in Italy at Christmastime.
Here the Italian people, whose blood runs in
the veins of so many Americans, feel the theme
of Christmas because so much of what it means
and exalts resides in the ageless courage of the
Church.

Saint Paul taught us that we walk by faith
and not by sight.

And Pope Paul inspires us to believe that
man's faith will prevail in the darkest hours.

The Pope and I will talk of peace, of how
it might be achieved and preserved. Peace is

his mission and constant concern, as it is of the
hundreds of millions of people throughout the
world who call him Holy Father.

He has reemphasized to aU of us quite re-
cently his deep and passionate desire to do what-
ever he can, whenever he can, "towards the re-
establishment of peace." Not only the Church
he heads but the moral force he exerts are assets
which should be employed in constructing a
future without war.

This is a task that must also be undertaken
in the councils of government, in the churches,
in the neighborhood, and in the privacy of our
faith, so that one day the morning will come
when "no war or battle's sound will be heard the
world around."

If we can put away violence and greed and
ungoverned ambitions, then we can be about
the work that urgently needs to be done — to
feed the hungry, to teach the ignorant, and heal
the sick.

Statement After Meeting With Pope Paul

White House press release (Rome, Italy) dated December 23

I have come around the world to call on His
Holiness Pope Paul in the spirit of his offer of
"unarmed cooperation . . . towards the re-estab-
lishment of true peace."

No man can avoid being moved to try harder
for peace at Christmastime.

We discussed possible paths to peace and the
efforts that have been made in recent years, so
far without success.

We agree with His Holiness that "an honor-
able settlement of the painful and threatening
dispute is still possible." I received his judg-
ment to this end, and I deeply appreciate the
full and free manner in which it was given.

His Holiness has suggested a principle of
mutual restraint. If this principle was accepted
by both sides, there would be rapid and solid
progress toward peace.

We would be willmg to stop the bombing
and proceed promptly to serious and productive
discussions.

A total end to the violence would be our ur-
gent objective.

We support informal talks with the South.

We are ready for formal talks with the North.

We will agree to any proposal that would
substitute the word and the vote for the knife
and the grenade in bringing honorable peace
to Viet-Nam.

JANUARY 15, 1968

77

We shall keep closely in touch with His Holi-
ness in the clays ahead, as we shall with others
who are searching to lift the scourge of war
from Viet-Nam and Southeast Asia.

Departure Statement

White House press release (Rome, Italy) dated December 23

I am leaving Italy after a visit which has been
very brief but, I believe, very useful and con-
structive. I have been able to greet and consult
with President Saragat, Prime Minister [Aldo]
Moro, and Foreign Minister [Amintore] Fan-
f ani and I have had a memorable audience with
His Holiness Pope Paul VI.

Once again, these beneficial exchanges have
brought home to me how greatly the conduct of
relations between nations has been changed by
this new age of rapid communications and
travel. While our meetings were necessarily on
short notice, we were able to meet as friends
who have been able to confer together with rela-
tive frequency in recent years — and we were
able to discuss current matters on a current
basis. This is a new age for statecraft, and I
believe we can all hope that such closeness be-
tween leadei's of nations will hasten the day of
understanding and cooperation in peace for all
men.

The President, the Premier, Foreign Minis-
ter, and I reviewed some of the problems con-
fronting the great Atlantic alliance to which
our two countries belong. I was especially grati-
fied by the mutual confidence among us regard-
ing the prospects for the alliance's future. We
also talked about the problem of achieving
peace in Southeast Asia, and I reviewed with
them the continuing determination of the
United States to seek every opportunity to bring
peace and justice to the people of Viet-Nam.

In my meeting with His Holiness, we dis-
cussed the vital necessity of taking new steps to
bring peace to Viet-Nam and to maintain peace
among all nations of the earth. I discussed with
His Holiness the plight of the American
prisoners being held by the North Vietnamese
and being denied the rights required by inter-
national standards. I have reviewed in another
statement more fully these valued discussions
with His Holiness.

I am returning home now to observe Christ-
mas with my family. I do so encouraged by these
brief talks in Europe, as by all the talks of this
mission. As I leave Italy, I would like to extend
to all the people of the great Republic of Italy
the greetings of this season and the warmest of
good wishes for the yesir ahead.

78

DEPARTMENT OF STATE BULLETIN

President Johnson's Christmas Message to the Nation '

Not many hours ago I stood among some of
your sons in Viet-Nam.

I had come back to Asia, 14 months after my
hxst visit there, to say farewell to a friend, the
late Prime Minister Harold Holt of Australia. I
had joined with the leaders of Asia and the
Commonwealth in ceremonies and meetings that
spoke not only of our personal loss but of our
common bonds. The spirit of Harold Holt, the
spirit of the new Asia, was powerfully alive
among those who gathered to pay tribute to his
memory.

I had traveled then to Thailand, to the air-
base at Khorat; and in tiie darkness before
dawn I spoke to our pilots and ground crews,
the brave and skillful airmen who are helping
to relieve the enemy's pressure on our soldiers
and marines in South Viet-Nam.

Now, on the airstrip at Cam Ranh Bay, your
sons and I exchanged "Merry Christmas" and
"Happy New Year." I told them that I wished
I could bring them something more, some part
of the pride you feel in them, some tangible
symbol of your love and concern for them.

But I knew that they could feel your pride.
I knew that they were confident of your love.
Their faces were smiling, and they had that
enthusiasm, that brave generosity of si^irit, that
the world associates with young Americans in
uniform.

I decorated 20 of them for gallantry in action.
Their faces seemed more grave than the others —
preoccupied, I thought, with the savage ex-
perience of battle they had endured.

In the hospital, I spoke with those who bore
tlie wounds of war. You cannot be in such a
place, among such men, without feeling grief
well up in your throat, without feeling grateful
that there is such courage among your
coimtrymen.

That was Christmastime in Viet-Nam, a time
of war, of suffering, of endurance, of bravery
and devotion to country.

A few hours later, I sat with His Holiness
Pope Paul in his Vatican study. I had flown
thousands of miles from Viet-Nam to Rome so
that I might receive the counsel of this good
man, tliis friend of peace.

' Recorded at the White House on Dec. 24 for broad-
cast nationally (White House press release).

I wanted to tell him that the United States
had been actively seeking an end to the war in
Viet-Nam, that we had traveled dozens of roads
in search of peace but that, thus far, these had
proved fruitless journeys.

I wanted to promise him — as I have promised
you, my fellow Americans — that the disappoint-
ments we had known in the past would not deter
us from trying any reasonable route to
negotiations.

These things I said, and I listened as His
Holiness told me of his eagerness to help bring
peace to Viet-Nam. We talked of what might
be done to help the people of Viet-Nam become
reconciled to one another in a nation at peace.
I felt, once more, what all the world knows : the
human sympathy, the passion for peace, that
fills the heart of the Pope.

I told His Holiness that America welcomed
his efforts to bring an end to the strife and sor-
row. And I told him of a matter that weighs
on our hearts this Christmas, and every day of
the year: the treatment of American prisoners
of war in North Viet-Nam.

I told him how we hoped he would intercede
on their behalf, seeking to gain for them more
humane living conditions and the elemental
right to communicate with their loved ones. I
assured him that his representatives would be
welcomed wherever prisoners were held in
South Viet-Nam.

That was Christmastime in Rome, a time of
quiet, of understanding, of communication
without any barrier.

Now that the holy day itself has come, I wish
each of you a full measure of happiness. I hope
that all of you may remember, this Christmas,
the brave young men who celebrate the holy sea-
son far from their homes, serving their country,
serving their loved ones, serving each of us.

I hope, too, that your hearts may be filled with
peace within, as your country seeks peace in the
world.

Our country has known many wartime
Christmases. It may seem difficult, at such times,
to say "Merry Christmas." But when you think
of the bravery of the human spirit and the
compassion of the human heart and the power
of life to triumph over pain and darkness, you
are thankful. Your own spirits are lifted high;
and you say it — and mean it — as I do now.
Merry Christmas.

JAJTCART 15, 19G8

United Nations Endorses Text of Agreement on Rescue
and Return of Astronauts and Space Vehicles

Folloioing are a statement by Herbert lieis,
U.S. Representative in the Legal Subcommittee
of the United Nations Committee on the Peace-
ful Uses of Outer Space, made in the subco?n-
mittee on December H and a statement by
Arthur J. Goldberg, U.S. Representative to the
General Assembly, made in plenary session on
December 10, together urdh the texts of a resolu-
tion adopted by the Assembly on December 19
and a/n annex to that resolution, which contains
the text of the Agreement on the Rescue of
Astronauts, the Return of Astronauts, and the
Return of Objects Launclied Into Outer Space.

STATEMENT BY MR. REIS, DECEMBER 14

U.S./U.N. press release 240

The United States delegation wishes to state
our thanks to you, Mr. Chairman, for making
possible this special session of the Outer Space
Legal Subcommittee. We recognize that many
demands and difficulties face delegations during
this last full week of the 22d session of the
General Assembly. At the same time, sufficient
progress has been made on a draft agreement on
assistance to and return of astronauts and space
vehicles to justify this meeting and the oppor-
tunity it provides to record for members of the
United Nations the advances thus far made.

Just a year ago, on December 19, 1966, the
General Assembly commended the Outer Space
Treaty.^ The Assembly also requested the Outer
Space Committee to continue its work on a con-
vention on liability for damage caused by the
launching of objects into outer space and on an
agreement on assistance to and return of astro-
nauts and space vehicles. It may be noted that
since 1963— shortly after the Outer Space Com-
mittee as currently constituted began its work —

' For background and text of Resolution 2222 (XXI) ,
see BuixETiN of Jan. 9, 1967, p. 78 ; for text of the Outer
Space Treaty, see Hid., Dec. 26, 1966, p. 953.

the General Assembly has regularly called for
work on these two agreements. It has considered
them as paired agreements and has called an-
nually for their elaboration.

During the debate in the General Assembly's
First Committee on the outer space item in
October of this year, many complaints were
voiced concerning our lack of progress. As a
result, the General Assembly on November 3
adopted Resolution 2260 (XXII) calling for
urgent work on these twin agreements. Para-
graph 9 of General Assembly Resolution 2260
(XXII) :

Requests the Committee on the Peaceful Uses of
Outer Space, in the further progressive development
of the law of outer space, to continue with a sense of
urgency its work on the elaboration of an agreement
on liability for damage caused by the launching of ob-
jects into outer space and an agreement on assistance
to and return of astronauts and space vehicles, and to
pursue actively its work on questions relative to the
definition of outer space and the utilization of outer
space and celestial bodies, including the various impli-
cations of space communications.

The purpose of this special session of the Le-
gal Subcommittee is to report progress on the
elaboration of an assistance-and-return agree-
ment. We seek to act promptly and without de-
lay in responding affirmatively to the mandate
that the General Assembly has given us.

It is, as I said earlier, very late in the General
Assembly session. But we would be unwise to let
our proper preoccupations with matters before
the Assembly prevent seizing an opportunity to
make real progress. Even at the risk of impa-
tience and annoyance, we would want to proceed
with a serious and expeditious review of the
progress that has been made, rather than later to
regret an opportunity lost because of failure to
recognize and take hold of it.

Before turning to the assistance-and-return
agreement, my delegation would like to take this
occasion to stress once again the continuing im-
portance we attached to the prompt conclusion

80

DEPABTMENT OF STATE BULLETIN

of a satisfactory liability convention. It may not
be improper to recall that the United States
originally took the initiative in calling attention
to the need for a liability convention. That was
in May of 1959 during the session of the Ad Hoc
Committee on the Peaceful Uses of Outer Space.

In a tii-st survey of the field, dated July 1959,
the Ad Hoc Committee asserted that the con-
clusion of a liability convention was a task re-
quiring prompt attention. In June of 1962 the
United States placed before the United Nations
the first concrete draft of a liability convention.
Since 1963 the delegation of Belgium has acted
as a co-initiator in drafting and proposing treaty
texts, as has the delegation of Hungary. At our
last session from June 19 tlirougli July 14, the
United States, Belgium, and Hungary jointly
introduced a number of texts recording points of
agreement. The subcommittee subsequently ap-
proved these texts. While still far from the text
of a convention, we are finally making progress
in that direction.

We understand that the Legal Subcommittee
members without exception intend to make the
most rapid possible progress toward a liability
convention. The United States and a number of
other delegations have committed tliemselves to
undertake meaningful negotiations to this end.

Mr. Chairman, one further point is worth
stressing with regard to the assistance and lia-
bility agreements. It is sometimes asserted that
only the space powers are interested m the
assistance-and-retum agreement; and it is
urged, further, that the liability convention is
the proper interest of the nonspace powers ex-
clusively.

We believe these assertions to be incorrect. The
United States, as a first proponent of the notion
of a liability convention, does not accept them,
and the actions of my Government underscore
this. We consider that a liability convention will
further the interests of all. It will further the
interests of the space powers since, by conclud-
ing such a convention, they will not only demon-
strate their responsibility in the conduct of
space activities but also provide for the orderly
resolution of disputes which might arise and
which, if not promptly resolved, could adversely
affect the exploration and use of outer space.

Nor, to cite the other case, does the assistance-
and-retum agreement the Legal Subcommittee
is now considering relate solely to concerns of
space powers. To take but two instances, the
provisions of article 5 on recovery and return of
space objects and of article 6 on international
organizations are of interest to all who today

conduct or may in the future conduct space
activities.

The United States delegation has sought
agreement in these negotiations on an assistance-
and-retum instrument that will contain to the
maximimi possible degree obligations fair for
present and future individual space powers, for
near-space powers, for collective space powers,
as well as for those who are interested in space
activities ; that is, the entire membership of the
United Nations.

The agreement before us is very much a prod-
uct of the United Nations and its Outer Space
Committee. Its principal provisions are based
upon the Outer Space Treaty, article V of which
calls upon parties to "regard astronauts as en-
voys of mankind in outer space." The treaty also
requires parties to render astronauts "all possi-
ble assistance in the event of accident, distress,
or emergency landing on the territory of another
State Party or on the high seas." Article V fur-
ther requires that "When astronauts make such
a landing, they shall be safely and promptly re-
turned to the State of registry of their space ve-
hicle." And article VIII of the treaty lays down
the rule that ownership of object^s laimched
into outer space is unaffected by transit and re-
turn to earth; it states that "Such objects or
component parts foimd beyond the limits of the
State Party to the Treaty on whose registry they
are cariied shall be returned to that State, which
shall, upon request, furnish identifying data
prior to their return."

We have also sought in these negotiations to
make good use of the work accomplished by the
Outer Space Committee in its 1964 session, the
high-water mark of progress on assistance and
return. At the first part of the 1964 session, held
in Geneva in March, preliminary agreement was
reached on a number of provisions relating to re-
covery and return of space vehicles. One of these
provisions — to which many nonspace powers
have attributed particular importance — would
entitle a party on whose territory an apparently
dangerous space vehicle has landed to require
the launching authority to take all necessary
steps to remove any danger of harm.

Mr. Chairman, I turn now to the proposed
Agreement on the Rescue of Astronauts, the Re-
turn of Astronauts, and the Return of Objects
Launched Into Outer Space. The text of the
agreement appears in document A/AC.105/
L.28, which our chairman has introduced earlier
this afternoon.

The preamble of the agreement notes the im-
portance of the Space Treaty, which entered

JANUARY 15, 1968

81

into force only 2 months ago on October 10. The
preamble further draws attention to the general
assistance-and-return obligations contained in
the treaty, already signed by more than 80 coun-
tries and ratified by more than 15.

Article 1 deals with notifications. It would
require a contracting party that learns of an
accident or emergency suffered by an astronaut
to notify immediately the launching authority ;
that is, the state or international organization
responsible for launching. Under the terms of
article 1, if the discovering party were unsure of
the identity of the launching authority, it would
make an appropriate public amiouncement. In
either event, it would also notify the Secretary-
General of the United Nations who would "dis-
seminate the information without delay by all
appropriate means of communication at his dis-
posal." Tlie Secretary-General would thus play
a role parallel to his role under article 11 of the
Outer Space Treaty, whereby he disseminates
information submitted by parties on the nature,
conduct, locations, and results of their space
activities.

By way of clarification, I would like to note
that article 1 uses the phrase "in any other
place not under the jurisdiction of any State."
The same phrase is used in article 3 concerning
nonterritorial assistance. This phrase relates to
such ai-eas as the high seas and to outer space,
including the moon and other celestial bodies.

Article 2 concerns measures of assistance to
an astronaut within the territory of a contract-
ing party. The first sentence of article 2 is drawn
from the Outer Space Treaty. It parallels the
more general requirement of the Outer Space
Treaty to render an astronaut in such circum-
stances "all possible assistance."

Tlie third and fourth sentences of article 2
deal with assistance by the launching authority
in searching for and rescuing an astronaut
who has met with an accident and who has come
down on the territory of another party to the
agreement. Assistance by the launching author-
ity in these rare and infrequent cases of emer-
gency could be ci-ucial in saving the life of an
astronaut. The launching authority wiU have
advanced competence and experience in locating
space vehicles. It may have aircraft or ships
available to join in a search for a downed astro-
naut.

_We think it clearly correct to expect that the
views of the territorial party and the launching
authority will coincide on the question whether,

in a particular case, launchmg authority assist-
ance would, in the words of article 2, "help to
effect a prompt rescue or would contribute sub-
stantially to the effectiveness of search and res-
cue operations." In the unlikely event they do
not agree, the territorial party would of course
have the fhial say in this matter.

A fuial word on article 2, Mr. Chairman. The
last sentence of article 2 calls for operations in
which the launching authority assists to be con-
ducted "under the direction and control" of the
territorial sovereign. This provision is entirely
appropriate in view of the fact that it is na-
tional teiTitory that is involved. On the other
hand, it also seems fair to ask that the territorial
sovereign shall, m these cases, "act in close and
continuing consultation with the launching au-
thority," and it is with these words that article
2 closes. We believe that article 2 repi-esents
a just balancmg of the interests of the terri-
torial sovereign and the launcliing authority.

Article 3 concerns the duty to rescue in the
case where an astronaut in distress comes down
on the high seas or elsewhere beyond national
jurisdiction. In this event a contracting party
which is in a position to do so is obliged to
"extend assistance in search and rescue opera-
tions for such personnel to assure their speedy
rescue."

Article 4 is a full rendering of the legal obli-
gation of article V of the Space Treaty to safely
and promptly return an astronaut who has
landed elsewhere than planned. The text also
incorjwrates a suggestion advanced by the dele-
gation of France that a party should be obliged
to return an astronaut to representatives of the
launching authority rather than to the launch-
ing authority itself.

Article 5 deals at some length with recovery
and return of objects lamached into space tliat
subsequently reenter the atmosphere and land
on the surface of the earth. As noted earlier,
the text builds on provisions agreed in prelim-
inary fashion in 1964. These have been brought
into line with the Outer Space Treaty.

Paragraph 1 thus calls for notifications to the
laimching authority and the Secretary-Genei*al
that a space object has returned to earth. In the
event of a request by the launching authority,
paragraph 2 asks the party on whose territory
the object lands to "take such steps as it finds
practicable to recover the object or component
parts." Under paragraph 3, if the launching
authority seeks the return of the object and fur-

82

DEPARTMENT OF STATE BtTLLETIN

nishes identifying data upon request by the
territorial party, the territorial party becomes
obliged to return tlie object to the representa-
tives of the launching authority. Paragraph 4
states that, in the event an object of a hazardous
or deleterious nature returns to earth, the terri-
torial party may, at ibs discretion, ask the
launclung authority to eliminate any possible
danger of harm by conductmg operations to that
end ''under the direction and control" of the
territorial party. Finally, paragraph 5 calls for
reimbursement of expenses incurred by the terri-
torial party when the launching authority re-
quests recovery, or recovery and return, of an
object.

My delegation has sought, in negotiating
article 6, to insure that the views and interests
of those countries which participate in inter-
national organizations that conduct space activi-
ties liave been accurately and fully reflected. We
hope that this has in fact been the case. While
the language of article 6 is not yet fully agreed,
there is general agreement that what is required
is a straightforward definition of the term
"launching authority." That definition should
make clear that the tenn refers to the state
responsible for launching or, where an inter-
national intergovenunental organization is
responsible for the launching in question, to the
international organization.

The remaining provisions of the proposed
assistance-and-return agreement — articles 7
through 10 — contain final or protocolary provi-
sions identical to those of the Outer Space
Treaty. Article 7 names the United States, the
United Kingdom, and the Soviet Union as de-
positary governments and specifies that the
agreement shall be open to all states for signa-
ture and ratification. The United States sup-
ports the accession clause now included in the
draft agreement, because of the special and ex-
ceptional character of this agreement. The
General Assembly has earlier cliaracterized
astronauts as "envoys of mankind." An agree-
ment for the rescue of astronauts is thus an
exceptional instrument of a special character.
The fact that the "all states" clause has been
emplo3-ed in this instance does not indicate that
it is suitable in other circumstances.

Adoption of this accession clause — urged be-
cause of exceptional circumstances favoring a
very broad geograpliical coverage for the assist-
ance-and-return agreement — does not, of course,
affect the recognition or status of an unrecog-

nized regime or entity which may elect to file an
instnunent of accession to the assistance-and-
return agreement. Under international law and
practice, recognition of a government or ac-
knowledgment of the existence of a state is
brought about as the result of a deliberate deci-
sion and course of conduct on the part of a
govei'nment intending to accord recognition.
Ilecognition of a regime or acknowledgment of
an entity cannot be inferred from signature,
ratification, or accession to a multilateral agree-
ment. The United States believes that this view-
point is genei'ally accepted and shared, and it is
on this basis that we join in supporting the pres-
ent text of the assistance-and-return agreement.
Mr. Chainnan, these are the principal features
and the background of the proposed assistance-
and-return agreement. We hope the members of
the Legal Subcommittee will welcome the agree-
ment, and we hope that the subcommittee will
shortly be in a position to forward the agree-
ment to our parent Outer Space Committee.
This action will speed the work of the Outer
Space Legal Subcommittee on the liability con-
vention and the other items on our agenda. It
will also, in our view, constitute a positive con-
tribution to international cooperation in the
peaceful uses of outer space.^

STATEMENT BY AMBASSADOR GOLDBERG,
DECEMBER 19

U.S./U.N. press release 252

Less than 2 months ago the General Assembly
adopted a resolution asking the Outer Space
Committee to continue its work with a sense of
urgency on an agreement on assistance and re-
turn of astronauts and space vehicles. Today
the General Assembly has unanimously ap-
proved a consensus text of the agreement
forwarded, also unanimously, for its considera-
tion by the Outer Space Committee. The Com-
mittee has thus complied with the Assembly's
mandate to proceed urgently. But it would be
a mistake to assume that the draft has not been
carefully prepared. It is a good and sound treaty

' The text of the draft agreement, as amended by
the Legal Subcommittee In the course of its special
session Dec. 14-15, was transmitted to the Committee
on the Peaceful Uses of Outer Space in the subcommit-
tee's report (A/AC.105/43). On Dec. 16 the Outer Space
Committee decided unanimously to submit the draft
agreement to the General Assembly for consideration.

JANUARY 15, 196S

83

and will stand the test of time and experience.

The United States regards the action of the
Assembly in endorsing tliis treaty to be a his-
toric action. The treaty text represents agree-
ment on implementing that famous phrase from
the Outer Space Treaty: that astronauts are
"envoys of mankmd." My delegation believes
that endorsement of this treaty by the General
Assembly constitutes one of the major achieve-
ments of this Assembly.

Mr. President, the United States considers
that the assistance-and-return agreement which
we have adopted represents a just balancing of
the interests of all members of the United
Nations — the space powers, the near-space pow-
ers, the cooperative space powers, and all who
are interested in outer space, which, indeed,
means the entire membership of our organiza-
tion. This agreement bears witness to the fact
that the United Nations can make a real con-
tribution to extending the rule of law to new
areas and to insuring the positive and peaceful
ordermg of man's efforts in science and the
building of a better world. It is, not last of all,
a tribute to those who venture forward in the
new world of outer space. We hope and we will
work to make that venture one to benefit all.

It is clear that although all nations, as
I have just said, have a great interest in space
activities, this particular agreement is of spe-
cial interest and concern to the two major space
powers, whose astronauts are engaging in the
hazardous enterprise of exploring the imiverse
for the benefit of all mankind. What is signifi-
cant to us is that countries that may not be
launching their own astronauts for years to
come or, indeed, never launching them, have
made it clear that they consider the safety of
astronauts from whatever country they may
come to be a shared responsibility of the world
community. This is in the great humanitarian
tradition of the United Nations and its mem-
ber states. And my Government deeply appre-
ciates the cooperation of the nonspace powers.
Indeed, we have noted this attitude in nearly
all of our negotiations on outer space matters.
It may be that only by venturing beyond earth's
limits shall we learn that the bonds of human-
ity are stronger than the bonds of nationality.

In our statements before the Committee on
the Peaceful Uses of Outer Space and its Legal
Subcommittee, my delegation recognized, as

several speakers have pointed out, that other
problems remain to be solved and particularly
problems of acute interest to nonspace powers.
Therefore, I would like to reiterate the point
which my Government made in the Committee
and that is that we attach a high degree of im-
portance to the prompt conclusion of a satis-
factory convention on liability for damage
caused by the launching of objects into outer
space. We intend to participate actively and
constructively in the drafting of that agree-
ment. The resolution we have just adopted caUs
on the Outer Space Committee to complete an
agreement on liability by the next session of
the Assembly. I pledge the full and unstinting
efforts of the United States to this end.

My delegation would like also to draw the
attention of members to article 7, which names
the United States, the United Kingdom, and
the Soviet Union as depositary governments
and specifies that the agreement shall be open
to all states for signature and ratification. The
United States supports the accession clause now
included in the draft agreement, because of the
special and exceptional character of this agree-
ment. An agreement for the rescue of astronauts
is an exceptional instrument of a special char-
acter. The fact that the "all states" clause has
been employed in this instance does not indicate
that it is suitable in other circumstances.

Adoption of the accession clause — urged be-
cause of exceptional circumstances favoring a
very broad geographical coverage for the as-
sistance-and-return agreement — does not, of
course, affect the recognition or status of an un-
recognized regime or entity which may elect to
file an instrument of accession to the assistance-
and-return agreement. Under international law
and practice, recognition of a government or
acknowledgment of the existence of a state is
brought about as a result of a deliberate deci-
sion and course of conduct on the part of a gov-
ernment intending to accord recognition. Recog-
nition of a regime or aclniowledgmeut of an
entity cannot be inferred from signature, rati-
fication, or accession to a multilateral agree-
ment. This, of course, is something which all
of us shai'e in recognizing.

Mr. President, the United States delegation
wishes to thank Ambassador [Kurt] Waldheim,
the distinguished chairman of the Outer Space
Committee, and the members of that committee,

84

DEPARTMENT OF STATE BULLETIN

President Johnson Gratified by U.N. Endorsement of Agreement
on Rescue and Return of Astronauts and Space Objects

Following is a statement made hy President John-
son on December 19 which was released 6j/ the
White House that day at Honolulu, Hawaii.

I am gratified that the United Nations General
Assembly has just endorsed an Agreement on the
Rescue of Astronauts, the Eetum of Astronauts, and
the Return of Objects Lavmched Into Outer Space.

The subject of assistance and return has been
discussed at meetings of the U.N. Outer Space Com-
mittee since 1962. The agreement would implement
rights and obligations of the Outer Space Treaty.
The proposed new agreement would require that
parties to the treaty shall :

— Immediately notify the appropriate authorities
Lf they receive information that astronauts have
accidentally landed or are In distress,

— Immediately take all possible steps to rescue
astronauts who have accidentally landed on their
territory and render them all necessary assistance.

— If necessary and if they are in a position to do
so, extend assistance in search and rescue operations
for astronauts who have alighted on the high seas,

— Safely and promptly return astronauts who
have landed either on their territory or on the high
seas, and

— Notify the appropriate authorities of space ob-
jects which have come down on their territory or
on the high seas and, upon request, take steps to re-
cover and return such objects.

I hope that this agreement will help to insure that
nations will assist astronauts in the event of acci-
dent or emergency. The agreement would carry for-
ward the purpose of this administration to promote
international cooperation in the peaceful uses of
outer space. On the occasion of the entry into force
of the Outer Space Treaty on October 10, I said : ^

"Whatever our disagreements here on earth, how-
ever long it may take to resolve our conflicts whose
roots are buried centuries-deep in history, let us try
to agree on this. Let us determine that the great
space armadas of the future will go forth on voyages
of peace — and go forth in a spirit, not of national
rivalry, but of peaceful cooperation and understand-
ing. . . .

"The next decade should increasingly become a
partnership — not only between the Soviet Union and
America, but among all nations under the sun and
stars."

' Bulletin of Oct. 30, 1067, p. 565.

Mr. [Eugeniusz] Wyzner, the distinguished
chairman of the Legal Subcommittee, and the
members of the Ivegal Subcommittee, our col-
league the other major space power, and the
many delegates and officials of the Secretariat
of the United Nations, -who have made possible
the drafting of this agreement. Compromise be-
tween the space powers and between the space
powers and the nonspace powers was essential
for an agreement such as this to be presented to
the Assembly. Mr. President, we also thank you
for your help in obtaining a consensus that this
item should be placed on the agenda for consid-
eration on the last day of our proceedings.

Mr. President, we believe that this agreement
will help assure that every possible assistance is
rendered to astronauts in distress or emer-
gency, and we believe all of the people of the
world who follow the exploits of astronauts
with such great interest will applaud and wel-
come this agreement as we do. Let us hope that
these agreements on outer space can inspire us
to make similar agreements on our political

problems on earth. After all, the charter enjoins
us to harmonize our actions, and surely this ap-
plies not only in space but very much here on
earth.

TEXTS OF RESOLUTION AND ANNEX

Resolution 2345 ^

The General Assembly,

Bearing in mind its resolution 2260 (XXII) of 3
November 1967, which calls upon the Committee on
the Peaceful Uses of Outer Space to continue with a
sense of urgency its work on the elaboration of an
agreement on liability for damage caused by the launch-
ing of objects into outer space and an agreement on
assistance to and return of astronauts and space
vehicles.

Referring to the addendum to the report of the Com-
mittee on the Peaceful Uses of Outer Space,

Desiring to give further concrete expression to the

"Adopted by the General Assembly on Dec. 19 by a
vote of 115 to 0.

JANTTARY 15, 1968
285-914 — 68 3

85

rights and obligatious contalued iu the Treaty on
Principles Governing the Activities of States in the
Exploration and Use of Outer Space, Including the
Moon and Other Celestial Bodies,

1. Commends the Agreement on Rescue of Astro-
nauts, the Return of Astronauts and the Return of
Objects Launched Into Outer Space, which is annexed
to this resolution ;

2. Requests the Depositary Governments to open the
Agreement for signature and ratification at the earli-
est possible date ;

3. Expresses its hope for the widest possible adher-
ence to this Agreement ;

4. Calls upon the Committee on the Peaceful Uses
of Outer Space to complete the preparation of the
draft agreement on liability for damage caused by the
launching of objects into outer space urgently and, iu
auy event, not later than at tie beginning of the
twenty-third .session of tlie General Assembly, and to
submit it to the Assembly at that session.

Annex to Resolution

Agebement on the Rescue of Astbonauts, the Re-
turn OF ASTKONAUTS AND THE RETURN OF OBJECTS

Launched Into Outer Space

The Contrartino Parties,

Noting the great importance of the Treaty on Prin-
ciples Governing the Activities of States in the Explora-
tion and Use of Outer Space, including the Moon and
Other Celestial Bodie.s, which calls for the rendering
of all possible assistance to astronauts in the event of
accident, distress or emergency landing, the prompt
and safe return of astronauts, and the return of ob-
jects launched into outer space,

Desiring to develop and give further concrete expres-
sion to these duties,

Wishing to promote international co-operation in the
Ijeaceful exploration and use of outer space,

Prompted by sentiments of humanity,

Have agreed on the following :

Article 1

Each Contracting Party which receives information
or discovers that the personnel of a spacecraft have
suffered accident or are experiencing conditions of dis-
tress or have made an emergency or unintendefl land-
ing in territory under its jurisdiction or on the high
seas or in any other place not under the jurisdiction
of any State shall immediately :

(a) Notify the launching authority or, if it cannot
identify and immediately communicate with the launch-
ing authority, immediately make a public announce-
ment by all appropriate means of communication at Its
disposal : and

(b) Notify the Secretary-General of the United Na-
tions who should disseminate the information vrithont
delay by all appropriate means of communication at
his disposal.

Article 2

If, owing to accident, distress, emergency or unin-
tended landing, the personnel of a spacecraft land in
territory under the jurisdiction of a Contracting Party,

it shall immediately take all possible steps to rescue
them and render them all necessary assistance. It shall
inform the laimching authority and also the Secretary-
General of the United Nations of the steps it is taking
and of their progress. If assistance by the launching
authority would help to effect a prompt rescue or
would contribute sub.'stantiaUy to the effectiveness of
search and rescue operations, the laimching authority
shall co-operate with the Contracting Party with a
view to the effective conduct of search and rescue oper-
ations. Such operations shall be subject to the direction
and control of the Contracting Party, which shall act
in close and continuing consultation with the launching
authority.

Article 3

It information is received or it is discovered that the
per.sonnel of a spacecraft have alighte<l on the high
seas or in auy other place not under the jurisdiction of
any State, those Contracting Parties which are in a
position to do so .shall, if necessary, extend assistance
in search and rescue operations for such personnel to
assure their speedy rescue. They shall inform the
launching authority and the Secretary-General of the
United Nations of the steps they are taking and of
their progress.

Article 4

If, owing to accident, distress, emergency or unin-
tended lauding, the personnel of a spacecraft land in
territory under the jurisdiction of a Contracting Party
or have been found on the high seas or in any other
place not under the jurisdiction of any State, they shall
be safely and promptly returned to representatives of
the launching authority.

Article 5

1. Each Contracting Party which receives informa-
tion or discovers that a siwee object or its component
parts has returned to Earth in territory under its
jurisdiction or on the high seas or in any other place
not under the jurisdiction of any State, shall notify the
launching authority and the Secretary-General of the
United Nations.

2. Each Contracting Party having jurisdiction over
the territory on which a space object or its component
parts has been discovered shall, upon the request of
the launching authority and with assistance from that
authority if requested, take .such steps as it flnds
practicable to recover the object or component parts.

3. Upon request of the launching authority, objects
launched into outer space or their component parts
found beyond the territorial limits of the launching au-
thority shall be returned to or held at the disposal
of representatives of the launching authority, which
shall, upon request, furnish identifying data prior to
their return.

4. Notwithstanding paragraphs 2 and 3 of this arti-
cle, a Contracting Party which has reason to believe
that a space object or its component parts discovered
in territory under its jurisdiction, or recovered by it
elsewhere, is of a hazardous or deleterious nature may
so notify the launching authority which shall imme-
diately take effective steps, under the direction and

86

DEPARTMENT OF STATE BULLETIN

control of tbe said Contracting Party to eliminate pos-
sible daxiger or harm.

5. Esi)enses incurred in fulfilling obligations to re-
cover and return a space object or its component iwrts
under paragraphs 2 and 3 of this article shall be
borne by the launching authority.

Article G

For the purposes of this Agreement, the term
"launching authority" shall refer to the State respon-
sible for launching, or, where an international inter-
governmental organization is responsible for launching,
that organization provided that that organization de-
clares its acceptance of the rights and obligations
provided for m this Agreement and a majority of the
States members of that organization are Contracting
Parties to this Agreement and to the Treaty on Prin-
ciples Governing the Activities of States In the Ex-
ploration and Use of Outer Space, Including the Moon
and Other Celestial Bodies.

Article 7

1. This Agreement shall be open to all States for
signature. Any State vehieh does not sign this Agree-
ment before its entry into force in accordance with
paragraph 3 of this article may accede to it at any
time.

2. This Agreement shall be subject to ratification
by signatory States. Instruments of ratification and
instruments of accession shall be deposited with the
Governments of the United States of America, the
United Kingdom of Great Britain and Northern
Ireland and the Union of Soviet Socialist Repub-
lics, which are hereby designated the Depositary
Governments.

3. This Agreement shall enter into force upon the
deposit of instruments of ratification by five Govern-
ments including the Governments designated as De-
positary Governments under this Agreement

4. For States whose Instruments of ratification or
accession are deposited subsequent to the entry Into

force of this Agreement, it shall enter into force on
the date of the deposit of their instnmients of ratifi-
cation or accession.

5. The Depositary Governments shall promptly in-
form all signatory and acceding States of the date of
each signature, the date of deposit of each instrument
of ratification of and accession to this Agreement, the
date of its entry Into force and other notices.

6. This Agreement shall be registered by the De-
positary Governments pursuant to Article 102 of the
Charter of the United Nations.

Article 8

Any State Party to the Agreement may propose
amendments to this Agreement Amendments shall
enter into force for each State Party to the Agreement
accepting the amendments upon their acceptance by
a majority of the States Parties to the Agreement and
thereafter for each remaining State Party to the
Agreement on the date of acceptance by it.

Article 9

Any State Party to the Agreement may give notice
of its withdrawal from the Agreement one year after
its entry into force by written notification to the
Depositary Governments. Such withdrawal shall
take effect one year from the date of receipt of this
notification.

Article 10

This Agreement, of which the English, Russian,
French, Spanish and Chinese texts are equally au-
thentic, shall be deposited In the archives of the De-
positary Governments. Duly certified copies of this
Agreement shall be transmitted by the Depositary
Governments to the Governments of the signatory and
acceding States.

In Witness Whereof the undersigned, duly au-
thorized, have signed this Agreement
Done In copies at

JANUARY 15, 19C8

87

President Johnson Signs Proclamation To Carry Out
the Kennedy Round TariflF Agreements

REMARKS BY PRESIDENT JOHNSON

White House press release dated December 16

The large enterprises that really shape history
take a great deal of time and much hard work.

As our team of negotiators know so well, the
Kennedy Round has been just such an enter-
prise.

It was 5 years ago that the Congress passed
the Trade Expansion Act, but that act only pro-
vided us with some authority. It did not provide
us with any guarantee of results.

It took 5 years of very careful and very dif-
ficult negotiations to reach the agreements that
were signed in Geneva on Jmie 30th of this year.
We are indebted to many people for the conduct
of those negotiations. This morning we come
here to the Cabinet Room to celebrate the first
concrete results of this long effort.

Beginning January 1st our tariffs on many
of the products that we import will drop in the
first of what will be five annual reductions. This
will mean lowering the prices to our consumers
and lowering the cost to our manufacturers.

Our trading partners will take equivalent ac-
tion on their tariffs, too. This will mean bigger
export sales, we hope, for American business-
men and American farmers.

Those who negotiated at Geneva drove a
hard bargain, but we believe it was a fair bar-
gain. We gave, we think, as much as we re-
ceived. It was the kind of bargain from which
all will gain. They will gain in higher wages
for the workers, in more efficient factories, in
rismg incomes for us all and for our trading
partners throughout the world.

Now, these negotiations were on a world
scale; but they had a very special significance
for our relations with Western Europe, because
for the first time we negotiated directly with the
European Common Market as an institution.

We were dealing with the power of the world's
largest trading bloc.

The negotiations demonstrated what we have
very long believed: The more that Western
Europe acts together, the more effectively we
and other coimtries can work together. This
was a subject I explored with a great deal of
interest this last week with Mr. [Jean] Monnet,
who was here from Europe and who insisted
on talking about it at great length.

This was CAddent, we think, in a number of
very constructive steps that were taken during
this year in a very wide variety of activities with
our European neighbors. Contrary to what a
good many have thought or said or, if you
please, written, our thoughts were not constantly
and exclusively on Viet-Nam. There were other
parts of the world that did receive consideration
and attention, as must be obvious.

NATO, from which Secretary Rusk has just
returned this morning, continues to be the
strongest integrated alliance in history — it is
not just a mere collection of allies — even while
we had to move its nerve center from France to
Belgium. There was a question of what would
happen to the 15 nations in connection with some
of the decisions made concerning our move and
the continuance of the alliance.

During this year we had some very important
activities in connection with our German and
our British allies, when we reached a trilateral
agreement mider Secretary Rusk's and Mr.
[John J.] McCloy's leadership, that enabled us
to maintain our commitments, our troop com-
mitments, to NATO's central fund, and which
helped us also to materially ease our balance of
payments.^

' For a U.S. statement released on May 2 upon con-
clusion of the trilateral discussions, see Buxlettn of
May 22, 1967, p. 788.

88

DEPARTMENT OP STATE BtTLX,ETIN

There was a time with many resolutions in our
own Congress to bring our men home, and when
it was being reported that the Germans them-
selves would take substantial reductions in
troops — I think 60,000 — that there was alarm
in the world.

But tlie fait accompli did not come out that
way.

Also, together with the other members of the
International Monetary Fund, we achieved an
agreement which lays the foundation for the
supplementary international reserves needed by
the world economy, which resulted in many
discussions in London and subsequently con-
firmed at Rio.-

We are making progress, we believe, toward
an accord to halt the spread of nuclear
weapons — while at the same time insuring that
all nations will be able to benefit from the
peaceful uses of nuclear energy.

We have worked with our NATO allies and
with the U.N. to forestall a tragic war between
Greece and Turkey and to open the way to a
peaceful settlement of the Cyprus problem.

TVe are working with other industrial coun-
tries to provide very special trade advantages
to the developing coimtries which could help
to speed up the growth of their exports and to
accelerate their economic progress.

These achievements, I think, demonstrate the
basic principle of interdependence in interna-
tional policy. By moving together we all move
forward. By moving separately we may end
up by just not moving at all, if we try to go
alone.

Trade will be a critical test of our cooperation.
The reduced tariffs of the Kennedy Round will
give rise to many demands for protection here
and abroad. We must all stand firm against
shortsighted protectionism.

Now, we have shown that we can work
together witli united allies in many fields. I
have listed four or five of them. If we can do
it in these four or five, we have a land of oppor-
tunity out there where we can do it in others.

We all have problems of the cities, urban
problems, and many of theirs are as serious if
not more so than ours — older cities. But if we
can do it on trade, if we can do it on troops, if
we can do it on the NATO alliance, if we can do
it on money, why can't we do it on cities?

The problem of all the world is a problem of

' For background, see Hid., Oct. 23, 1967, p. 523.

what are we going to do about the developing
nations. Four out of every 10 people can't read
"dog," and can't write "mama," and can't spell
"cat." There are the education problems, the
health problems, the developing nations' prob-
lems, per se.

If we can work out these things together, why
can't we work together on aid for developing
nations ?

Why can't we work together on aid for re-
building the cities of the world ?

So I take great pride not only in what the
Kennedy Round does just within itself but what
it portends and what may flow from the knowl-
edge that if we can do it in connection with all
these things that we buy and sell, which reach
pretty close to home in some of these places, we
can do it on others.

We know that to sell abroad we must be will-
ing to buy abroad. If we cannot buy, then we
cannot sell.

Above all, we in the United States should
have the confidence in our own ability to com-
pete in the world — although as the protectionists
talk to me day after day, I think sometimes we
are losing confidence in our own ability.

We started on the road to expanding trade
about 30 years ago, under the policies of a great
Secretary of State and President. Its advances,
I think, are pretty evident to us all. To retreat
from it would, I think, set a chain reaction of
counterprotection and retaliation that would
put in jeopardy our ability to work together
and to prosper together.

What captain of industry or what union
leader in this country really yearns and is eager
to return to the days of Smoot-Hawley ? For
the world of higher tariffs and quotas and com-
petitive currency depreciation was also the
world of you-Imow-what — deep depressions,
rampant unemployment, low profits, if any, and,
generally, losses; corporation losses instead of
corporation profits.

So this day of declining trade barriers in a
world of unprecedented prosperity and growth
is something we want to continue.

We must and we will, I hope, keep it that way.

Almost every pei-son in this room this morn-
ing had a share in this legislation and made a
contribution to the soul-searching decisions and
the difficult negotiations that lay behind the
great accomplishments that we know as the
Kermedy Round. I want to thank each of you
present for the help you gave and the role j'ou

JANUARY 15, 1968

89

played. I know that we share the faith and the
confidence to continue on that long road.

I want to say a special thanks to Mrs. Herter
and her family for the great contribution that
that noble, enliglitened statesman made to this
endeavor — Christian Herter. I want to express-
ly give my personal thanks on behalf of the
people I can speak for — that is this nation. I
believe the whole world feels it.

To Ambassador Roth [William M. Eoth, Spe-
cial Representative for Trade Negotiations],
Ambassador Blumenthal [W. Michael Blumen-
thal, Deputy Special Representative], and to
Secretary Rusk and the Members of Congress
who contributed so much so long under such
adverse conditions, I want to say "Thank you"
and hope that it will, in some degree, compensate
you for the criticisms that you have endured
throughout this journey.

PROCLAMATION 3822 »

Proclamation to Carey Out Geneva (i967)
Protocol to the General Agreement on Tarifes and
Trade and Other Agreements

1. Whereas, pursuant to Section 350 of the Tariff
Act of 1930, the President, on October 30. 1947, entered
Into, and by Proclamation No. 2761A of December 16,
1947 (61 Stat. (pt. 2) 1103), proclaimed, the General
Agreement on Tariffs and Trade (hereinafter referred
to as the "General Agreement"), containing a schedule
of United States concessions designated as Schedule
XX, which General Agreement, schedule, and procla-
mation have been supplemented by other agreements,
schedules, and proclamations ;

2. WHEREXis, after compliance with the require-
ments of Section 102 of the Tariff Classification Act of
1962 (76 Stat. 73), the President by Proclamation No.
3548 of August 21, 1963 (77 Stat. 1017), proclaimed,
effective on and after August 31, 1963, the Tariff
Schedules of the United States, which reflected, with
modifications, and, in effect, superseded. Proclamation
No. 2761A and proclamations supplementary thereto
insofar as they relate to Schedule XX to the General
Agreement ;

3. Whereas, pursuant to Sections 221 and 224 of the
Trade Expansion Act of 1962 (19 U.S.C. 1841 and
1844), the President, by a notice dated October 21, 1963,
published and furnished to the United States Tariff
Commission (hereinafter referred to as tlie "Tariff
Commission"), lists of articles which might be consi-
dered for modification or continuance of dlities or other
import restrictions, including reductions in duties be-
low the 50 percent limitation specified in Section 201 (b)
(1) of the Trade Expansion Act of 1962 (19 U.S.C. 1821
(b) (1), or continuance of duty-free or excise treat-

'32 Fed. Reg. 19002.

ment in the negotiation of trade agreements (48 CFR
Part 180), which lists were supplemented by lists
published by the President and furnished by him to
the Tariff Commission by the notices dated Febru-
ary 18, 1965 (48 CI'"R Part 181), August 16, 1966 (48
CFR Part 182), and April 22, 1967 (32 F.R. 6429), and
the Tariff Commission, after holding public hearings,
advised the President with respect to each such article
of its judgment as to the probable economic effect of
such modifications ;

4. Whereas, pursuant to Sections 223 and 224 of the
Trade Expansion Act of 1962 (19 U.S.C. 1843 and 1844)
and in accordance with Section 3(g) of Executive
Order No. 11075 of January 15, 1963 (48 CFR 1.3(g) ),
the Special Representative for Trade Negotiations, ap-
pointed by the President pursuant to Section 241(a) of
the Trade Expansion Act of 1962 (19 U.S.C. 1871(a)),
designated, on April 23, 1963, the Trade Information
Committee to afford an opjwrtunity, through public
hearings and other means, for any interested person
to present his views concerning any article on the
lists identified In the third recital of this proclamation
or any other matter relevant to the negotiation of trade
agreements (48 CFR 202.3), and the Trade Information
Committee, after holding public hearings, furnished the
President with a summary of its hearings ;

5. Wheeei&s, pursuant to Section 222 of the Trade
Expansion Act of 1962 (19 U.S.C. 1842), the President
received information and advice with resi)ect to the
trade agreement identified in the seventh recital of
this proclamation, from the Departments of Agricul-
ture, Commerce, Defense, the Interior, Labor, State,
and the Treasury, and from such other sources as he
deemed appropriate, and pursuant to Section 241(b) of
the Trade Expansion Act of 1962 (19 U.S.C. 1871(b) ),
the Special Representative for Trade Negotiations re-
ceived information and advice with respect to that
agreement from representatives of industry, agricul-
ture, and labor, and from such agencies as he deemed
appropriate ;

6. Whereas, pursuant to Section 201 (a) of the Trade
Expansion Act of 1962 (19 U.S.C. 1821(a)), the Pres-
ident determined that certain existing duties or other
import restrictions of the United States, of foreign
countries which were contracting parties to the General
Agi"eement, or of foreign countries which sought to
accede to the General Agreement, were unduly burden-
ing and restricting the foreign trade of the United
States and that one or more of the purposes stated in
Section 102 of the Trade Expansion Act of 1962 (19
U.S.C. 1801) would be promoted by entering into the
trade agreement identified in the seventh recital of
this proclamation ;

7. Whereas, pursuant to Section 201(a)(1) of the
Trade Exp.ansion Act of 1962, on June 30, 1967, the
President, through his duly empowered representative,
entered into a trade agreement with other contracting
parties to the General Agreement and with countries
seeking to accede to the General Agreement, which
trade agreement consists of the Geneva (1967) Protocol
to the General Agreement, including a schedule of
United States concessions annexed thereto (hereinafter
referred to as "Schedule XX ( Geneva— 1967 )") , to-
gether with the Final Act Authenticating the Results of
the 1964-67 Trade Conference Held under the Auspices
of the Contracting Parties to the General Agreement (a

90

DEPARTMENT OF STATE BtTLI.ETIN

copy of which Protocol, including Schedule XX an-
nexed thereto, and a copy of which Final Act being
annexed to this proclamation as Annex I) ;'

8. Whereas each modification of existing duty pro-
claimed in this proclamation which i)rovides with re-
spect to an article for a decrease in duty below the
limitation specified in Section i;01(b) (1) or 2ri3 of the
Trade Exiiansiou Act of 1962 (19 U.S.C. lS21(b) (1)
or 1SS3) is authorized by one or more of the following
provisions :

(a) Section 202 of the Trade Expansion Act of 1962
(19 U.S.C. 1S22), by virtue of the fact that the rate
of duty existing on July 1. 1962. applicable to the
article was not more than 5 percent ad valorem (or
ad valorem equivalent) ;

(b) Section 213 of the Trade Expansion Act of 1962
(19 U.S.C. 1833), by virtue of the fact that, after being
advised by the Tariff Commission pursuant to that sec-
tion, the President, prior to entering into the trade
agreement identified in the seventh recital of this proc-
lamation, determined, pursuant to that section, that
the article was a tropical agricultural or forestry com-
modity, that the like article was not produced in sig-
nificant quantities in the United States, and that the
European Economic Community made a commitment
with respect to duties or other import restrictions ap-
plicable to such article which is likely to assure access
to its markets under the conditions set forth in that
section :

(c) Section 254 of the Trade Expansion Act of 1962
(19 U.S.C. 1SS4), by virtue of the fact that the Presi-
dent determined, pursuant to that section, that the
decrease authorized by that section wiU .s-implify the
computation of the amount of duty imposed with re-
spect to the article ; and

(d) Section 203 of the Tariff Classification Act of
1962, as amended (76 Stat. 882), Section 2(b) of Public
Law 89-204 (79 Stat. 839), Section 3(a) of the Tariff
Schedules Technical Amendments Act of 1965 (79 Stat.
933), Section 4 of Public Law 89-388 (SO Stat. 110), and
Section 1 of Public Law 90-14 (81 Stat. 14) ;

9. 'Wherelis, in the case of each decrease in duty
of the type specified in clause (a) or (c) of the eighth
recital of this proclamation which involves the deter-
mination of the ad valorem equivalent of a specific rate
of duty, and in the case of each modification in the form
of an import duty, the Tariff Commission determined,
pursuant to Section 256(7) of the Trade Expansion Act
of 1962 (19 U.S.C. 1886(7)) and in accordance with
Section 5(a) of Executive Order No. 11075 of January
15. 1963 (48 CFR 1.5(a)), and at the direction of the
President, the ad valorem equivalent of the specific rate
or the sjiecific equivalent of the ad valorem rate, as the
ca.se may be, on the basis of the value of imports of

the article concerned during a period determined by
it to be representative, utilizing, to the maximum extent
practicable, the standards of valuation contained in
Section 402 or 402a of the Tariff Act of 1930 (19 U.S.C.
1401a or 1402) applicable to such article during such
representative period ;

10. Wheeeas, pursuant to Section 201(a)(2) of the
Trade Expansion Act of 1962, I determine that the
modification or continuance of existing duties or other
import restrictions and the continuance of existing
duty-free or excise treatment hereinafter proclaimed
are required or appropriate to carry out the trade agree-
ment identified in the seventh recital of this proclama-
tion and related parts of other agreements ; and

IL Whereas, pursuant to Section 304(a) (3) (J) of
the Tariff Act of 1930 (19 U.S.C. 1304(a)
(3) (J) and Section 258 of the Trade Expan-
sion Act of 1962 (19 U.S,C. 1888), I find that the
susjiension of the effectiveness of the proviso to Section
304(a) (3) (J), with respect to the marking of the arti-
cles provided for in headnote 2 of Part 1 of Schedule 2
of the Tariff Schedules of the United States (added
thereto by Section A of Annex II to this proclamation),"
is required to carry out the trade agreement identified
in the seventh recital of this proclamation :

Now, THEREFORE, I, LYNDON B. JoHNsoN, President of
the United States of America, acting under the author-
ity vested in me by the Constitution and the .statutes,
including but not limited to Sections 201, 202, 213, and
254 of the Trade Expansion Act of 1962, do proclaim
that:

(1) Subject to the applicable provisions of the Gen-
eral Agreement, the Geneva (1967) Protocol, and other
agreements supplemental to the General Agreement, the
modification or continuance of existing duties or other
import restrictions and the continuance of existing
duty-free or excise treatment, provided for In Schedule
XX (Geneva — 1967), shall be effective on and after
January 1, 1968, as provided for therein ; and

(2) To this end and to give effect to related parts of
other agreements, the Tariff Schedules of the United
States are modified, effective on and after January 1,
1968, as provided for in Annexes II and III to this
proclamation.'

In WITNESS WHEREOF, I have hereunto set my hand
this 16th day of December in the year of our Lord
nineteen hundred and sixty-seven, and of the Independ-
ence of the United States of America the one hundred
and ninety-second.

The White House
Washinffton, D.C.

' Annex I was filed with the OflJce of the Federal
Register but was not published.

' Annexes II and III are published in part II of the
Federal Register of Dec. 19, 1967.

JANUAKY 15, 196 8

91

INTERNATIONAL ORGANIZATIONS AND CONFERENCES

U.N. Condemns South Africa's Violation
of Rights of South West Africans

Following is a statement made in the V.N.
General AssemUy by U.S. Representative
Arthur J. Goldberg on December U, together
with the text of a resolution adopted by tlie
Assembly on December 16.

STATEMENT BY AMBASSADOR GOLDBERG

U.S./D.N. press release 243 dated December 14

The position of the United Nations regard-
ing the relationship between South Africa and
South West Africa is clear. It was expressed in
the overwhelming approval of the General As-
sembly's resolution on this question more than
a year ago.^ That resolution, which the United
States fully supported was, as I said at the time,
intrinsically somid.^ South Africa's own actions
in breach of its obligations, its disavowal of the
mandate, and its disregard of the advisory opin-
ions of the International Court of Justice pro-
vided the basis for the General Assembly's de-
cision that South Africa's mandate for South
"West Africa was terminated and that hence-
forth South West Africa came under the direct
responsibility of the United Nations. It is on the
basis of this decision that the United Nations
has subsequently acted. Members of the United
Nations have not always agreed with unanimity
on courses of action, but uppermost in our
minds have always been the rights of the mhab-
itants of South West Africa and the obligation
of the international community not only to pre-
serve those rights, but also to seek their full en-
joyment, for the inhabitants.

Now, Mr. President, if South Africa's own
actions led to the forfeit of her rights in South

• For text of Resolution 2145 (XXI) adopted on Oct.
27, 1966, see Bulletin of Dec. 5. 1966, p. 870.

' For a statement by Ambassador Goldberg made in
the General Assembly on Oct. 12, 1966, see ihid., Oct.
31, 1966, p. 690.

West Africa and formed the basis of the United
Nations decision to terminate South Africa's
mandate, what have been South Africa's sub-
sequent actions ? Unquestionably, the actions of
the South African Government since October
27, 1966, reaffirm the wisdom of the General
Assembly's decision and constitute the best refu-
tation of South Africa's hollow and unconvinc-
ing contention that it administers South West
Afi-ica "in the spirit of the Mandate entrusted
to it by the League of Nations, and has no in-
tention of abdicating its responsibilities toward
the people of South West Africa."

South African proposals earlier this year to
impose and promote the fragmentation of the
territory under the guise of self-determination
and to acliieve piecemeal annexation under the
guise of administrative efficiency must be
opposed because of their potential long-term
harmful etfect. South Africa's imposition in
South West Africa of its universally con-
demned policy of apartheid should be a matter
of deep concern for all of us. Moreover, these
proposals represent clear defiance of the Gen-
eral Assembly's wise injunction that South
Africa refrain and desist from any action —
constitutional, administrative, political, or
otherwise — which will in any manner whatso-
ever alter or tend to alter the present inter-
national status of South West Africa.

I would like to analyze in some detail the
atrocious Terrorism Act, under which 37 South
West Africans were charged and brought to
trial under conditions which are repugnant to
all who believe in justice under law. This act is
significant because of its immediate implication
in terms of human lives and its longrun effect
in terms of an attempt to break the will of South
West Africans to achieve tlieir right of self-
determination. The act, promulgated after
South Africa's lawful authority for the terri-
tory had terminated, represents not only South
African defiance of the United Nations but

92

DEPARTMENT OF STATE BULLETIN

also further proof of South Africa's determina-
tion to flout tlie spirit and terms of the League
of Nations mandate.

Three months ago, on September 12, the
Special Committee of this Assembly called upon
the South African Government to release the
accused inmiediately.^ That Government has
ignored that call. At that time, the United
States Representative, noting that neither law-
lessness nor the absence of a lawfully function-
ing independent judiciary could be contem-
plated, succinctly stated the reasons that the
application of the Terrorism Act to South "West
Africa was inadmissible. It is still inadmissible.

jNIr. President, in the 20-year discussion of
apartheid in the United Nations, United States
Representatives frequently have had occasion
to comment on legislation passed to implement
apartheid. Surely the Terrorism Act rivals the
worst of the legislation and, as long as it exists,
constitutes a self-repudiation of South Africa's
claim to a tradition of respect for the rule of
law. Lest some say that this judgment is too
harsh, let the terms of the act speak for
themselves :

1. It is retroactive to so-called "offenses" per-
formed 5 years ago.

2. It places upon the accused the burden of
proving beyond a reasonable doubt that he did
not perform acts, harmless in themselves, with
the intent to commit a crime.

3. It subjects persons found guilty of what
South Africa calls "terroristic activities" to the
penalty provided for treason — death by hang-
ing— or, in any case, imprisonment for life or
for not less than 5 years.

4. It authorizes any conamissioned police
officer to arrest without warrant persons he be-
lieves may have violated the act or who might
be useful as potential witnesses and to detain
them indefinitely without bail, without recourse
to the courts or counsel, and without the right
to receive visits from family or friends.

5. It allows the government to try jointly per-
sons accused of separate violations, thereby per-
mittmg the guilt of the accused to be adjudged
in a mass trial.

6. It permits a person acquitted of one charge
to be tried again on other charges arising out
of the same acts.

7. Finally, it defines offenses with such
vagueness as to approach absurdity. For ex-
ample, any person who intentionally "embar-

' U.N. doc. A/6700.

rass(es)" the administration of the affairs of
the "State" or who encourages "feelings of hos-
tility between the White and other inhabitants
of the Republic" is a "terrorist." Other offenses
which might otherwise be misdemeanors, for
example, obstructing traffic, are likewise made
subject to a hanging sentence.

Wlio are the defendants presently being tried
imder this act? Why were they held without
charge, incommunicado, and in solitary con-
finement for up to 400 days? What is the sig-
nificance of their trial 1,000 miles away from
their homes in a court guarded by sten-gun-
armed policemen and ijolice dogs? In the
answers to these questions are the principal ele-
ments of the tragedy of South West Africa.
They illuminate the whole range of the problem
before the General Assembly today.

The defendants are not well known like Nel-
son Mandela or the Nobel Peace Prize winner,
the late Chief Albert Luthuli. However, they,
too, are men who have sought a future for their
homeland in which they and the overwhelming
majority who are nonwhite may participate in
governing their own affairs free from the re-
strictions and the discrimination of apartheid.
In most democratic societies they would be able
to pursue their goals through speeches and pub-
lications and would not be subject to hanging
under the absurd charge of embarrassing the
government or promoting a spirit of hostility.

But to seek the goals of free men in the inter-
national territory of South West Africa is to
be subjected to increasing restrictions, culminat-
ing in this declaration of terror by the South
African Parliament on June 12, 1967. Out of
these restrictions grows desperation, and in that
desperation some have found no alternative to
violence as an expression of this determination
to be free.

The United States does not condone violence.
The United States does condemn the brutality
of a government whose official policies have bred
violence by closing avenues of peaceful dissent
in South West Africa, thereby generating the
very behavior it seeks to punish.

Most disconcerting of all is the possibility
that the full story has not been told. How many
South West Africans who have committed the
"crime" of desiring to attain elementary himian
rights are being held without charge in solitary
or other confinement without knowledge of
family, without access to counsel, with no hope
of fair trial except under conditions of spu-

JANUART 15, 1968

93

rious legality? How many others, if finally
brought to trial, will find that serious sugges-
tions of assault during detention are ignoi-ed on
the basis of a bald denial by a prosecution
witness ?

As a member of this international community,
however, we have a right and a responsibility,
expressed in our cosponsorship and support of
the resolution before us contained in document
A/L.536, to call upon the South African Gov-
ernment to provide us with complete and
straightforward answers. We liave a right and
a responsibility to call upon the South African
Government to halt these prosecutions, to re-
lease and repatriate these South West Africans,
and to cease the application of this act. This we
do with all the vigor at our command.

Mr. Chairman, I would not wish to conclude
my statement tonight without referring to the
extreme and ridiculous allegations which we
have heard in the past several days with regard
to the implementation by the United States of
the United Nations embargo of the supply of
arms and military equipment to South Africa.
My country has adhered scrupulously to the
terms of this embargo. Despite this unequivocal
position on the implementation of the Security
Council's resolution on the shipment of arms
and military materiel,^ the United States has
been cited by two delegations during this debate
for alleged violations in this field. I would like
to cite these allegations and insinuations briefly
and refute them categorically.

The distinguished delegate of the Soviet
Union stated that the United States and certain
other countries "continue to deliver bombers to
the South African racists, as well as their mis-
siles and various types of small arms." It is
significant that the Soviet delegation did not
provide any details on this sweeping allegation,
either in the statement from whicli I have quot-
ed or in its earlier statement on South West
Africa. On earlier occasions when similar state-
ments have been made, we have directly chal-
lenged the Soviet delegate to furnish details,
details which the Soviet delegation has been
unable to provide. These charges were fabri-
cated out of thin air. It is impossible to provide
details because they do not exist.

Faced with this fact, other delegations have
resorted to inference and insinuation rather
than direct statements such as the one I have
quoted. The distinguished delegate of Hungary,
speaking at the 1624th meeting on December 11,
1967, said that "according to press reports in

March 1967, the South African Army and Air
Force were interested in an American executive
aircraft." Mr. President, I cannot confirm or
deny exactly what possible purchases interest
South African military authorities, but I can
deny categorically the suggestion, wliich the
distinguished delegate of Hungary obviously
sought to get across, that the United States is
furnishing such aircraft.

Mr. President, these citations will serve to
illustrate the extent to which the delegation of
the Soviet Union and other delegations with
similar intentions go in their frantic efforts
to use the debate on South West Africa as one
more device for launching attacks on the United
States together with other Western countries.

Now, Mr. President, while the United States
and other countries continue to strictly enforce
an embargo on the sale of arms and military
equipment to South Africa, that countrj' does
continue to receive large quantities of modern
and sophisticated weapons. The real sources of
these weapons are seldom mentioned. Those
who criticized the United States, which scrupu-
lously enforces the embargo, might better direct
themselves to those countries which do not do
so and to ways by which the embargo might be
made more effective.

Mr. Chainnan, the Assembly's action on
South West Africa last fall was historic, ending
a longstanding mandate for just cause. The
United States will do its utmost, by all ap-
propriate and peaceful means, to help carry
through to fruition the aims which are so
broadly shared and which are embodied in the
Assembly's Resolution 2145. We will provide
full and faithful support to the people of South
West Africa in the peaceful pursuit of their
goals, in their efforts to assert and to exercise
fully the rights to which all men everywhere
aspire.

TEXT OF RESOLUTION'

Question of South West Afeica

The General AssemMy,

Recalling its resolution 2145 (XXI) of 27 October
1966, by which it terminated the Mandate for South
West Africa and decided, inter alia, that South Africa
has no other right to administer the Territory and that

* For text of Resolution S/5386 adopted on Aug. 7,
1963, see Buxletin of Aug. 26, 1963, p. 338.

' U.N. doc. A/RES/2,324 (XXII) ; adopted on
Dee. 16 by a vote of 110 (U.S.) to 2, with 1 abstention.

94

DEPARTMENT OF STATE- BULLETIN

henceforth South West Africa conies under the direct
responsibility of the United Nations,

Gravely concerned about the arrest, deportation and
trial at Pretoria of thirty-seven South West Africans
by the South African authorities in flagrant viola-
tion of their rights and of the aforementioned
resolution.

Recalling further the resolution adopted on 12 Sep-
tember 1907 by the Special Committee on the Situation
with regard to the Implementation of the Declaration
on the Granting of Independence to Colonial Countries
and Peoples and also the consensus adopted by the
United Nations Council for South West Africa on
27 November 1067,

Conscious of the special responsibilities of the
United Nations towards the people and Territory of
South West Africa.

1. Condemns the Illegal arrest, deportation and trial
at Pretoria of the thirty-seven South West Africans as
a flagrant violation by the Government of South

Africa of their rights, of the international status of
the Territory and of General Assembly resolution
2145 (XXI) ;

2. Calls upon the Government of South Africa to
discontinue forthwith this illegal trial and to release
and repatriate the South West Africans concerned ;

3. Appeals to all States and international organiza-
tions to use their influence with the Government of
South Africa in order to obtain its compliance with the
provisions of paragraph 2 above ;

4. Draws the attention of the Security Council to
the present resolution ;

5. Requests the Secretary-General to report as soon
as pos.sible to the Security Council, the General As-
sembly, the United Nations Council for South West
Africa and the Special Committee on the Situation
with regard to the Implementation of the Declaration
on the Granting of Independence to Colonial Countries
and Peoples on the implementation of the present
resolution.

U.N. Peace Force in Cyprus Extended Through March 1968

Following is a statement made in the U.N.
Security Council by U.S. Representative
Arthur J. Goldberg on December 22, together
with the text of a resolution adopted by the
Council that day.

STATEMENT BY AMBASSADOR GOLDBERG

U.S./U.N. press release 257 dated December 22

The United States was pleased to support the
resolution extending the life of the United Na-
tions Force in Cyprus for 3 months, and we are
gratified that it was adopted imanimously by
the Security Council. Like all resolutions
adopted by the Council, no single member can
give it an authoritative interpretation. The
resolution speaks for itself.

The world has only recently watched with
great concern as violence increased in Cyprus
itself and the danger of hostilities rapidly
mounted. It was only due to strenuous efforts by
many, including the Secretary-General and his
representative, Mr. [Jose] Eolz-Bennett, and
the ultimate cooperation of Greece, Turkey, and
Cyprus, that the comer was turned.

It was, of course, the appeal of the Secretary-
General of December 3 that was the critical ele-

ment in making this favorable turn of events
possible. Two critical factors were involved:
first, the withdrawal of Greek and Turkish ex-
cess troops and an abatement of military meas-
ures as a first step following the appeal of the
Secretary-General and, second, the extension of
the good offices of the Secretary-General, as
proffered by him.

We are gratified that all three governments
welcomed the appeal of December 3 and that
prompt action was undertaken by Greece and
Turkey in response to the first part of the
appeal. We are also gratified with the favorable
attitude shown toward the Secretary-General's
offer of good offices and, in particular, with the
prospect that those good offices can now — in
light of the Secretary-General's statement
today, which we welcomed and listened to with
great interest^ — be expected to go forward with
the support of the Council in the resolution we
have just adopted and without the time pres-
sures which the extension of the life of the
Force have relieved.

We believe this process will be a highly im-
portant one and we urge those concerned to
approach it with the greatest determination to
reach an understanding exactly in the spirit of
the Secretary-General's statement here today.

JANUARY 15, 1968

95

For our part, we will continue to support the
work of UNFICYP both politically and
financially. And parenthetically, my Govern-
ment has contributed since the inception of the
Force in excess of $30 million to the Force.

We also believe we must look beyond the im-
mediate issues toward a permanent solution, as
the risks from the recurrent crises can be seen
to be becoming progressively larger. The prog-
ress of the resolution to this effect is thei'efore
of great unportance, and we hope early atten-
tion can be given to the methods by which this
aspect of the problem can be best approached,
none of which methods we have excluded in
adopting the resolution.

Mr. President, I regi-et that at this meeting
of the Council, which hopefully will be the last
one before the holiday season — that on the
tlireshold of unanimous agreement around this
table, we were once again subjected to the fa-
miliar and platitudinous Soviet theme of an
imperialist conspiracy to extinguish the inde-
pendence of Cyprus. It was precisely those
countries, described in such heavyhanded and
entirely mendacious terms, which Ambassador
[Nikolai] Fedorenko accuses of this plot, which
had been in the forefront of efforts to uphold
the independence of Cyprus. It is those coun-
tries, both directly and in suj^port of the United
Nations, which have given tangible evidence
of their willingness and anxiety to contribute
to peace and security in that troubled island.
Surely, the intensive efforts, for example, of our
own emissary, Sir. Cyrus Vance, can hardly be
considered as anything but a sincere and vital
commitment to insure the maintenance of
peace and security and to create opportunities
to find a solution. And it is entirely pertinent
to note that those efforts have been applauded by
all of the parties concerned.

Nor can I let this occasion pass by permitting
UNFICYP to be described as a foreign force.
It is an agent of the world organization, estab-
lished by the Security Council at the request of
the Government of Cyprus. And we are all
deeply indebted to those nations which have
contributed their soldiers to the U.N. Force and
to the cause of peacekeeping.

Now, if the Soviet Union were to chanse its

policy and show a willingness to contribute to
the efforts of this organization and UNFICYP
to mamtain peace in Cyprus — if, to use an
American slang word, it would "put up" in
support of peacekeeping — I am sure we would
all listen with much closer attention to the
Soviet comments on this subject.

TEXT OF RESOLUTION ^

The Security Council,

Noting the appeals addressed by the Secretary-
General to the Governments of Greece, Turkey and
Cyprus on 22 November, 24 November and 3 December
and the report of the Secretary-General of 8 December
1967 (S/8286),

Noting the replies of the three Governments con-
cerned to the appeal of the Secretary-General of 3
December in which the Secretary-General proffered his
good offices, and their replies to his previous appeals,

Noting from the said report of the Secretary-General
that circumstances continue to require the presence
of the United Nations Peacekeeping Force in Cyprus
for a further period.

Noting that the Government of Cyprus has agreed
that it is necessary to continue the Force beyond 26
December 1967,

1. Reaffirms its resolution 186 (1964) of 4 March
1964 and its subsequent resolutions as well as its ex-
pressions of consensus on this question ;

2. Extends the stationing in Cyprus of the United
Nations Peace-keeping Force established under the
Council's resolution 186, for a period of three months
ending on 26 March 1968 :

3. Invites the parties promptly to avail themselves
of the good ofiBces proffered by the Secretary-General
and requests the Secretary-General to report on the
results to the Council as appropriate ;

4. Calls upon all the parties concerned to continue to
show the utmost moderation and restraint and refrain
from any act which might aggravate the situation ;

5. Urges the parties concerned to undertake a new
determined effort to achieve the objectives of the Secu-
rity Council with a view, as requested in the Council's
consensus of 24/25 November 1967, to keeping the peace
and arriving at a permanent settlement in accordance
with the resolution of the Security Council of 4 March
1964;

6. Decides to remain seized of this question and to
reconvene for its further consideration as soon as cir-
cumstances and developments so require.

1 U.N. doc. S/KES/244 (1967) ; adopted unanimously
on Dec. 22.

96

DEPARTMENT OF STATE BULLETIN

United States Presents Views on the Question
of General and Complete Disarmament

Statement hy Adrian S. Fisher

V.S. Representative to the U.N. General Assernbly ^

I would like today to present to tliis com-
mittee the United States views on tlie question
of general and complete disarmament. These
views represent an altogether different ap-
proach to the subject than those we have heard
from several previous speakers, and notably
tliose incorporated in the statement by the dis-
tinguished First Deputy Foreign Minister of
theU.S.S.R.

Before elaborating on the differences in these
views I would like to take this opportunity to
comment on certain allegations which have been
made that the Federal Republic of Germany is
the main obstacle to the acceptance by the West-
ern alliance of the disarmament proposals pre-
sented by the Soviet Union and its Socialist
allies and that this Govermnent is furthermore
opposed to all disarmament measures.

Nothing could be further from the truth. The
Federal Republic of Germany is the first
European nation which through solemn treaty
obligations has renounced the manufacture of
nuclear weapons. It is the only nation of a
major alliance that has committed all of its
forces to the military command of that alli-
ance— and as a result has no military forces
under its own independent command. It is now
a nation which is actively seeking to build
bridges between Eastern and "Western Europe
and being rebuffed in this effort by those very
nations in the Eastern bloc which impugn her
motives.

Contrary to the allegations, Mr. Chairman,
the difficulty is not with the Federal Republic
and its Western allies, who act together in these
matters. As I hope to make clear in my remarks,

'Made in Committee I (Political and Security) on
Dee. 12 (D.S./U.N. press release 234).

the difficulty lies in the faulty nature of the
disarmament proposals put forth by the Soviet
Union.

False allegations made in this body will serve
no useful purpose but will make more difficult
the achievement of a lasting European security
arrangement based on mutual accord. The
United States delegation believes it is its duty
to speak on behalf of its ally which has no rep-
resentation in this body.

The difference between the approach of the
United States to the question of general and
complete disarmament and that of the Soviet
Union can be ascertained by comparing the
United States Outline of Basic Provisions of a
Treaty on General and Complete Disarmament
in a Peaceful World ^ and the Soviet Draft
Treaty on General and Complete Disarma-
ment Under Strict International Control. Both
provide for the process of general and complete
disarmament to take place in three stages.

The United States program for general and
complete disarmament provides for a freezing
of levels of armed forces and amnaments at an
agreed time and then progressively over the
three stages for the reduction of national mili-
tary establishments to levels required for the
maintenance of internal order and for support-
ing a United Nations peace force. Provisions
are made in the United States proposal for the
creation during the process of disarmament of
adequate machinery for v^erification, to insure
that the terms of an agreement are being car-
ried out, as well as for the strengthening of
peacekeeping forces to maintain peace and
security for all.

• For text, see Buu-EnN of May 7, 1962, p. 747.

JAXUARY 15, 1968

97

The Soviet proposal, on the other hand, em-
phasizes almost total reductions of selected cat-
egories of armaments at the very outset of the
disarmament process. It seeks drastic reduc-
tions of nuclear-weapon carriers at the_ very
beginning of the disarmament process — in its
first stage — before it provides for the establish-
ment of adequate machinery for verification.
That proposal, in the first stage of the disarma-
ment process, not only fails to inspire the con-
fidence and trust upon which subsequent phases
can and must be built but would materially
alter the existing military balance in favor of
the Soviet Union.

I might point out that at no time has the
Soviet Govenmient ever indicated how^ — by
what progressive steps — such reductions woidd
take place. This presents us with a difficulty
which is not new to us. The Soviet proposals
dealing with general and complete disarma-
ment do not really deal with the steps which
can actually be taken now to halt the arms race
and begin the process of disarmament. They
appear to require agi-eement on how to proceed
almost to the end of the road to general and com-
plete disarmament before any action is taken.

This difference in approach — the United
States believing we should take the steps we
can take now to get us moving down the road
to general and complete disarmament, the Soviet
Union apparently believmg that we should not
do so until we have agreement as to how to pro-
ceed to the end of the road, or almost to the
end of the road — has been reflected in the atti-
tude of our disarmament negotiators both at
the ENDC [Eighteen-Nation Disarmament
Committee] and elsewhere.

The United States has proposed a cutoff of
the production of fissionable material for weap-
ons purposes. This proposal was rejected as
not involving disarmament. The United States
indicated that it was prepared to transfer 60,000
kilograms of weapons-grade U-235 to peaceful
uses if the U.S.S.E. would agree to a transfer
of 40,000 kilograms for this purpose. This pro-
posal was rejected as not involving the destruc-
tion of a single nuclear weapon. The United
States indicated that it would obtain the mate-
rial by the demonstrated destruction of nuclear
weapons. This proposal was ignored.

The United States has made similar propos-
als for workable measures dealing with the
reduction of the delivery systems for nuclear
weapons. In January 1964 the United States
proposed that we explore a verified freeze on

the number and characteristics of strategic nu-
clear offensive and defensive vehicles, an agree-
ment which would open the path to reductions
in all types of arms. This proposal was charac-
terized by the Soviets as one involving inspec-
tion without disarmament. As recently as Sep-
tember of this year, Secretary [of Defense
Robert S.] McNamara reiterated our willingness
to enter into agreement not only to limit, but
later to reduce, both offensive and defensive
strategic nuclear forces.^ In coimection with a
possible agreement leveling off or reducing stra-
tegic offensive and defensive systems. Assistant
Secretary of Defense Paul Warnke pointed out
that, although agreements involving substantial
reductions would require agreed international
inspection, "a number of possibilities for paral-
lel action and even for formal agreement . . .
would permit our reliance on tmilateral means
of verification." * These statements would ap-
pear to take care of the point of inspection with-
out disarmament. These statements have gone
unanswered.

Here, too — it .seems — we have been continu-
ally faced with an approach which requires
agreement on how to proceed almost to the end
of the road to general and complete disarma-
ment before any first steps can be taken. This is
quite contrary to the philosophy which moti-
vates our efforts to obtain a nonproliferation
treaty which recognizes the need for step-by-
step progress even in the absence of agreement
on the final elimination of nuclear weapons.

In this connection, it is fortunate that the
Soviet position on immediately practical par-
tial measures to reduce and eliminate nuclear
weapons has not been reflected in our efforts to
prevent the spread of nuclear weapons to new
countries and new enviromnents. If it had we
would not today have the Limited Test Ban
Treaty, the Outer Space Treaty, and be on the
threshold of a nonprolifei-ation treaty.

Mr. Chairman, it is in this context that I
would like to refer to the report of the Secre-
tary-General on the effects of the possible use
of nuclear weapons and on tlie security and eco-
nomic implications for states of the acquisition
and further development of those weapons.'

'For an address by Secretary McNamara made at
San Francisco, Calif., on Sept. 18, 19G7, see ibid., Oct. 9,
1967, p. 443.

' In an address made before the Advocates Club of
Detroit on Oct. 6, 1967.

" U.N. doc. A/6858 and Corr. 1.

98

DEPARTMENT OF STATE BUTLLETIN

Mr. Chairman, iny delegation commends the
Secretai y-Gcneral for his eil'orts in tlie prepara-
tion of a most useful and timely document. My
delegation also commends the consultant ex-
perts, wlio were able, through cooperation and
mutual understanding, to agree on a umxni-
mous report dealing with many sensitive and
controversial issues.

This report contains many conclusions which
will be helpful to us in our consideration of the
nonpi-oliferation of nuclear weapons.

It clearly dissipates the illusion that a non-
proliferation treaty is something which pri-
marily benefits the nuclear powers at the ex-
pense of the nonnuclear powers. It makes it
quite clear that new nuclear powers would en-
danger themselves — or the remaining non-
nuclear powers^far more than they would
endanger the existing nuclear-weapon powers.

It points up the imavoidable economic costs
involved, which are a curse to any nuclear-
weapon state, and notes that no nuclear- weap-
ons program coidd be undertaken unless the
states so doing reallocate "a major portion of
their technical resources from constructive
activities."

It also indicates that time is running out for
mankind if it is to control and eventually abol-
ish the threat or risk of nuclear war. The fact,
as the report indicates, that the widespread in-
stallation of nuclear power stations will by 1980
yield plutonium sufficient for the construction
of thousands of nuclear weapons each year must
be recognized as an imperative for immediate
action. The prospect of the widespread distri-
bution of even primitive nuclear devices, with
a consequent probability that present exacting
procedures for command and control of these
weapons could not be maintained under such
conditions, presents a threat many times
greater than that which exists today.

But this report also deals with the subject
on which the United States and the U.S.S.E.
have differed in their approach to general and
complete disarmament. It deals, insofar as nu-
clear weapons are concerned, with the issue of
what we can agree to now that will put us in
motion on the road to general and complete
disarmament. I think it is fair to say that the
report rejects the Soviet approach that we must
have agi'eement on how to proceed to the end
of the road before we can agree to any steps on
how to start down that road.

It does conclude that the elimination of all

stockpiles of nuclear weapons and the banning
of their use should be by way of general and
complete disarmament. But it also recommends
consideration of a range of immediate initial
measures of arms limitations — measures which
could lead to the reduction of the level of nuclear
armaments and the lessening of tension in the
world and, I quote, "the eventual elimination
of nuclear armaments."

In its concluding paragraphs this report
points out that the problem of reversing the
trend of a rapidly worsening world situation
calls for a basic reappraisal of all interrelated
factors. It mentions a variety of measures of
arms limitation which could immediately be
considered and which, taken together or in
coml)ination, could help to inhibit the further
multiplication of nuclear weapons or the further
elaboration of nuclear arsenals, and so help
insure national and world security.

Among the measures that it mentions are an
agreement to prevent the spread of nuclear
weapons, an agreement on the reduction of
nuclear arsenals, a comprehensive test ban
treaty, measures safeguarding the security of
nonnuclear countries, and nuclear-free zones.

The report recommends consideration of these
measures of arms limitations in full recognition
of the fact that they cannot of themselves elim-
inate the threat of nuclear conflict. It recom-
mends that they be taken, not as ends in
themselves but as measures which would facil-
itate further steps and could lead to the reduc-
tion of the level of nuclear arsenals and the
lessening of tensions in the world and the
eventual elimination of nuclear arsenals.

This report lends no support to a position that
we should not now take one or a combination of
the various immediate measures until we have
come to an agreement on the eventual elimina-
tion of nuclear arsenals.

Mr. Chairman, in considering the approaches
of the various countries to the problem of gen-
eral and complete disarmament, this committee
should have in mind that for almost 4 years the
United States has had on the table workable
measures first to prevent increase in, and later
tx> reduce, the material used to make nuclear
weapons, the weapons themselves, and the means
of their delivery. It is the Soviet Union which
has rejected these measures. It has done so on
the ground that we must first agree to their
proposal for the drastic reduction of nuclear-
weapons carriers in the first stage of disarma-

JAXCARY 15. 19G8

99

ment — before adequate machinery has been
established for verification. In the absence of
agreement on tliis point, they have been imwill-
ing to agree to these workable measures to
prevent the stockpiles of nuclear weapons and
delivery systems from growing ever and ever
larger.

Because of this position, the nuclear arsenals
have grown ever and ever larger. They have
grown on both sides. The United States does not
believe that this course of conduct, which has
been forced upon us by the attitude of the Soviet
Union, is a wise one. The Secretary-General's
report speaks out concerning the dangers of
such a course far more eloquently than could
I. I shall conclude these remarks by quoting it.
It says: "And the longer the world waits, the
more nuclear arsenals grow, the greater and
more diificult becomes the eventual task.'

Outer Space Treaty Registered
With U.N. Secretary-General

States in the negotiations that began shortly
after President Johnson's statement of May 7,
1966, calling attention to the need for a treaty
in view of the prospect of manned lunar land-
ings.^ The Outer Space Treaty was approved by
the General Assembly on December 19, 1966, "
and signed in Washington, London, and Mos-
cow on the following January 27. The Senate
gave its advice and consent on April 25 and
President Johnson ratified the treaty on May
24. On October 10 of this year — 18 months after
the President's proposal — the treaty entered
into force with the deposit of the necessary in-
struments of ratification.* Of the 84 countries
that have signed the treaty in Washington, 17
have already deposited their ratifications.

The treaty is a remarkable accomplishment,
considering the complex and imique character
of the issues with which it deals. It stands as a
symbol of the way in which the members of
the United Nations, working together in fields
of shared interests, can reach mutually bene-
ficial agreements. The treaty also bears witness
to the fact that law need not lag behind the
the accomplishments of science and technology.

U.S. /U.N. presa release 217 dated November 30

U.S. MISSION ANNOUNCEMENT

The United States, the United Kingdom, and
the Soviet Union on November 30 registered
the Outer Space Treaty of 1967 ^ with the Sec-
retary-General of the United Nations. A three-
power note signed by Ambassadors Arthur J.
Goldberg, Lord Caradon, and Nikolai Fedo-
renko informed Secretary-General U Thant of
their desire to register the treaty.

The three depositary Governments thus ful-
filled their duties under article XIV of the
treaty to register it in accordance with article
102 of the United Nations Charter. Article 102
requires that international agreements be
promptly registered with the Secretary-General.
The Secretariat publishes these agreements in
the United Nations Treaty Series. Registration
by the United Nations Representatives of the
three Governments is the final step following
negotiation. General Assembly approval, signa-
ture, and entry into force of the Outer Space
Treaty.

Ambassador Goldberg represented the United

' For test of the treaty, see Bulletin of Dec. 26, 1966,
p. 953.

TEXT OF THREE-POWER NOTE

His Excellency

U Thant

Secretary General of the United Nations

Deab Mr. Seceetabt General : Expressing our
highest esteem, we have the honor on behalf of the
Governments of the Union of Soviet Socialist Re-
publics, the United Kingdom of Great Britain and
Northern Ireland, and the United States of America
to transmit for registration in accordance with Article
102 of the Charter, the Treaty on Principles Governing
the Activities of States in the Exploration and Use of
Outer Space, Including the Moon and Other Celestial
Bodies, which was opened for signature at London,
Moscow and Washington on January 27, 1967, and en-
tered into force on October 10, 1967.

Article XIV of that Treaty designates the Govern-
ments of the Union of Soviet Socialist Republics, the
United Kingdom of Great Britain and Northern Ire-
land, and the United States of America Depositary
Governments and provides that the Treaty shall be
registered by the Depositary Governments pursuant to
Article 102 of the Charter of the United Nations.

We transmit to you herewith certified copies of the
three originals of the aforementioned Treaty, in the
Chinese, English, French, Russian and Spanish lan-
guages, and request that you consider that Treaty as
registered m the United Nations Secretariat by joint

' Ibid., June 6, 1966. p. 900.

' IMd., Jan. 9, 1967, p. 78.

* For background, see Hid., Oct. 30, 1967, p. 565.

100

DEPARTMENT OF STATE BULLETIN

representation of the Governments of the Union of

Soviet Socialist Republics, the ITnited Kingdom of

Great Britain and Northern Ireland, and the United

States of America.

Accept, Mr. Secretary General, assurances of our

highest consideration.

Abthtjr J.

GOLOBEBO
Permanent Fepre-
acntaHve of the
United States of
America to the
United Nations

N. FtDORENKO
Permanent Repre-
sentative o] the
Union of Soviet
Socialist Repub-
lics to the Unit-
ed Nations

Caradon
Permanent Repre-
sentative of the
United Kingdom
of Great Britain
and Northern
Ireland to the
United Nations

TREATY INFORMATION

United States and Korea Sign
New Cotton Textile Agreement

Press release 292 dated December 11

DEPARTMENT ANNOUNCEMENT

Notes -were exchanged in Washington on
December 11, 1967, constituting a new bilateral
agreement governing exports of cotton textiles
from the Republic of Korea to the United
States. Assistant Secretary of State Anthony
M. Solomon signed on behalf of the United
States Government ; Ambassador Dong Jo Kim
signed on behalf of the Eepublic of Korea.

The new agreement, which supersedes the
agreement signed January 26, 1965,^ is retro-
active to January 1, 1967, and will expire on
December 31, 1970. For the first agreement year
(1967), Korea may export to the United States
a total of 32,216,250 square yards of cotton tex-
tiles. Of this total, exports of approximately 23
million square yards may be of yams and fab-
rics, and approximately 9 million square yards
may be of apparel. Other provisions in the
agreement are similar to those contained in
other U.S. cotton textile bilateral agreements;
these include provision for growth, flexibility,
carryover, equity, and consultation.

TEXT OF U.S. NOTE

Decembek 11, 1907
Excellency: I have the honor to refer to the deci-
sion of the Cotton Textiles Committee of the General
Agreement on Tariffs and Trade approving a Protocol
to extend through September 30, 1970 the Long-Term
Arrangement regarding International Trade in Cotton
Textiles, done in Geneva on February 9, 1962 (herein-
after referred to as "the Long-Term Arrangement")."
I also refer to recent discussions between representa-
tives of our two Governments and to the agreement
between our two Governments concerning exports of
cotton textiles from the Republic of Korea to the United
States effected by an exchange of notes dated January
26, 1965, as amended. I confirm on behalf of my Gov-
ernment, the understanding that, as of January 1,
1967, the following agreement supersedes the 1965
agreement, as amended, except for the exchange of
letters dated November 22, 1966' concerning amounts
of cotton textiles exported between January 1, 1966
and April 1, 1967 that are not charged against the limi-
tations in the agreement. This agreement is based on
our understanding that the above-mentioned Protocol
entered into force for our two Governments on October
1, 1967.

1. The purpose of this agreement is to provide for
the orderly development of trade in cotton textiles
between the Republic of Korea and the United States
of America.

2. The agreement shall extend through December 31,
1970. During the term of the agreement, the Govern-
ment of the Republic of Korea shall limit annual
exports of cotton textiles to the United States to
aggregate, group and specific limits at the levels specified
in the following paragraphs. It is noted that these levels
reflect a special adjustment for the first agreement year.
The levels set forth in paragraphs 3, 4 and 5 for the
second agreement year are 5 percent higher than
the limits for the preceding year without this special
adjustment; thus the growth factor provided for
in paragraph 10 has already been applied in arriving
at these levels for the second agreement year.

3. For the first agreement year, constituting the 12-
month period beginning January 1, 1967, the aggregate
limit shall be 32,216,250 square yards equivalent.
For the second agreement year, the aggregate limit
shall be 35,070,000 square yards equivalent.

4. Within the aggregate limit, the following group
limits shall apply for the first and second agreement
years, respectively:

Square Yards EquivaXent

First Secmd

Agreement Year Agreement Year

Group I

(Categories 1-38
and 64)
Group II

(Categories 39-63)

22, 882, 500 24, 896, 812

9, 333, 750 10, 173, 188

' For text, see Bulletin of Feb. 22, 1965, p. 275.

' For text of the Long-Term Arrangement, see iUd.,
Mar. 12, 1962, p. 431.

' For texts of U.S. note and letter dated Nov. 22,
1966, see ibid., Dec. 26, 1966, p. 983.

JANUART 15, 1968

101

5. Within the aggregate limit and the applicable group
limits, the following specific limits shall apply for the
first and second agreement years:

Group I

Category

FirH Agreement Year

Second Agreement Year

7

500, 000 syds.

525, 000 syds.

9

2,426,250 syds.

2,625,000 syds.

18/19

1, 838, 438 syds.

1, 995, 000 syds.

22

743, 001 svds.

840, 000 syds.

26 (other than

919, 219 syds.

997, 500 syds.

duck)

26 (duck)

10, 937, 344 syds.

11, 550, 000 syds.

31 (wiping

950, 866 pes.

998, 550 pes.

cloths)

(330, 901 syds.)

(347, 495 syds.)

34

88, 977 pes.

93, 450 pes.

(551, 657 syds.)

(579, 390 syds.)

64A (Table-

443, 353 lbs.

479, 850 lbs.

cloths and

(2, 039, 424 syds.) (2, 207, 310 syds.)

Napkins)

64B (Zipper

55, 781 lbs.

58, 800 lbs.

Tapes)

(256, 592 syds.)

(270, 480 syds.)

Group II

Category

Firtl Agreement Year Second Agreement Year

Unit

Unit

45

29,804 doz.

31,500 doz.

(661,232 syds.)

(698,859 syds.)

46

23,788 doz.

25,200 doz.

(581,783 syds.)

(616,316 syds.)

49

22,885 doz.

26,250 doz.

(743,763 syds.)

(853,125 syds.)

50

41,974 doz.

44,100 doz.

(747,011 syds.)

(784,848 syds.)

51

56,807 doz.

59,850 doz.

(1,010,994 svds.)

(1,065,150 syds.)

52

29,391 doz.

31,500 doz.

(427,051 syds.)

(457,695 syds.)

54

42,019 doz.

47,250 doz.

(1,050,475 syds.)

(1,181,250 syds.)

60

25,013 doz.

27,300 doz.

(1,299,675 syds.)

(1,418,508 syds.)

6. Within the aggregate limit and the applicable
group limits, the foUowing specific limits shall apply
for the second agreement year only. In agreement
years other than the second agreement year, the pro-
cedures of paragraph 8(b) shall apply:

Categorii

38

625,000 syds.

47

25,000 doz.

(554,650 syds.)

48

10,000 doz.

(500,000 syds.)

63

10,000 doz.

(453,000 syds.)

65

10,000 doz.

(510,000 syds.)

7. Within the aggregate limit, the limit for Group I
may be exceeded by not more than 10 percent and the
limit for Group II may be exceeded by not more than 5
percent. Within the applicable Group limit, as it may
be adjusted vmder this provision, specific limits may be
exceeded by 5 percent.

8. (a) Within the applicable group limits for each
group, the square yard equivalent of any shortfalls
occurring In exports in the categories given specific
limits may be used in any category not given a specific
limit.

(b) In the event the Government of the Republic
of Korea desires to export in any agreement year more
than the consultation level specified in this agreement
in any category not given a specific limit, it shall re-
quest consultations with the Government of the United
States of America on this question. The Government of
the United States of America shall agree to enter into
such consultations and, during the course thereof, shall
provide the Government of the Republic of Korea with
information on the condition of the United States mar-
ket in the category in question. Until agreement is
reached, the Government of the Republic of Korea
shall maintain its exports in the category in question
at a level for the agreement year not in excess of the
consultation level. For the first agreement year, the
consultation level shall be 525,000 .square yards equiva-
lent for categories in Group I, and 385,875 square yards
equivalent for categories in Group II.

9. The Government of the Republic of Korea shall
limit exports of items of chief value corduroy in
Categories 46, 50, 51, 5.3, 54 and 63 during each agree-
ment year. For the first agreement year the level of
this limit shall be 2,094,750 square yards equivalent.
In the event excessive concentration in exports from
the Republic of Korea to the United States of items
of apparel of a particular fabric causes or threatens to
cause market disruption in the United States, the
Government of the United States may request in writ-
ing consultations with the Government of the Republic
of Korea to determine an appropriate course of action.
Such a request shall be accompanied by a detailed fac-
tual statement of the reasons and justifications for the
request, including relevant data on imports from third
countries. During the course of such consultation the
Government of the Republic of Korea shall maintain
exports in the categories in question at an annual level
not in excess of 105 percent of the exports in such
categories during the first twelve months of the fifteen
month period immediately preceding the month in
which consultations are requested, or at an annual
level not in excess of 90 percent of the ex^jorts in such
categories during the twelve-month period immediately
preceding the month in which consultations are re-
quested, whichever is higher.

10. In the succeeding twelve-month periods for which
any limitation is in force under this agreement, the-
level of exports permitted under such limitation shall
be increased by five percent of the corresponding level
for the preceding twelve-month period, the latter level
not to include any adjustments under paragraphs 7
or 17.

11. Exports in all categories of cotton textiles shall
be spaced as evenly as possible, taking into account
seasonal factors.

12. Each Government agrees to supply promptly any
available statistical data requested by the other Gov-
ernment. In particular the Governments agree to ex-
change monthly data on exports of cotton textile.s from
the Republic of Korea into the United States. In the
implementation of this agreement the system of cate-
gories and factors for conversion into square yards
equivalent set forth in the annex to this agreement ;
shall appl.v. In any situation where the determination
of an article to be a cotton textile would be affected by }
whether the criterion provided for in Article 9 of the-,)
Long-Term Arrangement is used or the criterion pro- j
vided for in paragraph 2 of Annex E of the Long-Term- '

102

DEPARTMENT OF STATE BTTLLETIN

Arrangement is used, the obief value criterion used by
the Government of tbe Unite<l States of America in
accordance witli ])arasrai)h 2 of Annex E shall apply.

13. During the term of this agreement the United
States shall not invoke Article 3 of the Long-Term
Arrangement to limit imports of cotton textiles from
the Republic of Korea into the I'nited States. The
applicability of the Long-Term Arrangement to trade
in cotton textiles betvreen the Republic of Korea and
the United States shall otherwise be unaffected by this
agreement

14. The Governments agree to consult on any ques-
tion arising in the Implementation of this agreement.
In particular, if, in the event of a return to normal
market conditions in the United States, the Govern-
ment of the United States relaxes measures it has
taken under the Long-Term Arrangement for any of the
categories, the Government of the Republic of Korea
may request and the Government of the United States
of America agrees to enter into consultations concern-
ing the possible removal or modification of the limits
established for such categories by the present
agreement.

15. Mutually satisfactory adminiirtrative arrange-
ments or adjustments may be made to resolve minor
problems arising in the implementation of the agree-
ment including differences in points of procedure or
operation.

16. If the Government of the Republic of Korea con-
siders that as a result of limitations specified in this
agreement, the Republic of Korea is being placed in an
inequitable position vis-a-vis a third country, the Gov-
ernment of the Republic of Korea may request consulta-
tion with the Government of the United States of
America with the view to taking appropriate remedial
action such as a reasonable modification of this
agreement

17. (a) For any agreement year immediately fol-
lowing a year of a shortfall (i.e., a year in which cot-
ton textile exports from the Republic of Korea were
below the aggregate limit and any group and si)ecifie
limit applicable to the category concerned) the Govern-
ment of the Republic of Korea may permit exports to
exceed the aggregate, group and specific limits by
carryover in the following amounts and manner :

(i) The carryover shall not exceed the amount of
shortfall in either the aggregate limit or any applica-
ble group or specific limit and shall not exceed either
five percent of the aggregate limit or five percent of
the applicable group limit in the year of the shortfall,
and

(il) in the case of shortfalls in the categories sub-
ject to specific limits the carryover shall not exceed
9ve percent of the specific limit in the year of the short-
fall, and shall be used in the same category in which
:he shortfall occurred, and

(iii) in the case of shortfalls not attributable to
ategories subject to specific limits, the carryover shall
s )e used in the same gronp in which the shortfall oc-
I' "urred, shall not be used to exceed any applicable
It ipecific limit except in accordance vi'ith the provisions
»• 'f paragraph 7, and shall not be used to exceed the
imits in paragraph 8 of this agreement.

Ih) The limits referred to in subparagraph (a) of
ills paragraph are without any adjustments under
ais paragraph or paragraph 7.

(c) The carryover shall be in addition to the exports
permitted in paragraph 7.

18. The Government of the Republic of Korea and
the Government of the United States of America may
at any time propose revisions in the terms of this
agreement. Each Government agrees to consult
promptly with the other Government about such pro-
posals with a view to making such revisions to the
present agreement, or taking such other appropriate
action, as may be mutually agreed upon.

19. Either Government may terminate this agree-
ment effective at the beginning of a new agreement
year by written notice to the other Government to be
given at least ninety days prior to the beginning of
such new agreement year.

If the foregoing conforms with the understanding
of your Government, this note and Tour Excellency's
note of confirmation * on behalf of the Government of
the Republic of Korea shall constitute an agreement
between our two Governments.

Accept, Excellency, the renewed assurance of my
highest consideration.

For the Acting Secretary of State :
ANTHONr M. Solomon

His Excellency

Dong Jo Kim,

Ambassador of the Republic of Korea

Current Actions

MULTILATERAL

Conservation

Convention on nature protection and wildlife preserva-
tion in the Western Hemisphere, with annex. Done at
the Pan American Union October 12, 1&40. Entered
into force for the United States April 30, 19i2. 56
Stat. 13.54.
Ratification deposited: Chile, December 4, 1967.

Judicial Procedure

Convention on the service abroad of judicial and extra-
judicial documents in civil or commercial matters.
Done at The Hague November 15, 1965.^
Ratification deposited: United Kingdom, November
17, 1967.

Load Lines

International convention on load Unes, 196C. Done at
London April 5, 1966. Enters into force July 21, 1968.
TIAS 6331.
Accession deposited: Mauritania, December 4, 1967.

Maritime Matters

Convention on facilitation of international maritime
traffic, with annex. Done at London April 9, 1965.
Entered into force for the United States May 16, 1967.
TIAS 6251.
Acceptance deposited: France, November 29, 1967.

' Not printed here.
' Not in force.

ANTART 1"), 196 8

103

Slavery

Sunnlementary convention on the aboUtion of slavery,
the sCe tride and institutions and Practices similar
to slavery. Done at Geneva September 7, 1956. En-
tered Into force for the united States December 6,

Accession deposited: Spain, November 21, 1967.

Trade

Lone-term arrangement regarding international trade
i?f cotton textills, as amended and extended. Done at
^neva February 9, 1962. Entered into force Octo-
ber 1 1962. TIAS 5240, 6289. .,, ^^
Territorial application: Netherlands Antilles, Novem-
ber 17, 1967.

United Nations

Charter of the United Nations and Statute of the Inter-
national court of Justice. Signed at San Francisco
June 26, 1945. Entered into force October 24, 1945.

Admfsst^^lo mem-bersMp: Southern Yemen, Decem-

her 14 1967
Amendment to article 109 of the Charter of the United
Nations. Adopted at New York December 20, 1965.i
Ratification deposited: Italy, December 4, 1967.

Wheat

1067 Protocol for the further extension of the Inter-
national Wheat Agreement, 1962 (TIAS 5115) Open
for signature at Washington May 15 through June 1,
1967, inclusive. Entered into force July 10, 19b7.

TIAS 6315. . ^ u OT iQflT.

Ratifications deposited: Mexico, December 27, 19fo7 ,
Portugal, December 16, 1967.

BILATERAL

Korea

Agreement relating to trade in cotton textiles, with
annex. Effected by exchange of notes at Washington
December 11, 1967. Entered into force December 11,
1967.

Trinidad and Tobago

Agreement extending the convention of December 22,
1966 for the avoidance of double taxation and the
prevention of fiscal evasion with respect to taxes on
income and the encouragement of international trade
and investment. Effected by exchange of notes at
Port of Spain December 19, 1967. Entered into force
December 19, 1967.

United Arab Republic

Agreement concerning trade in cotton textiles. Effected
by exchange of notes at Washington December 28,
1967 between the United States and the Embassy of
India, representing the interests of the United Arab
Republic. Entered into force January 1, 1968.

DEPARTMENT AND FOREIGN SERVICE

Designations

Graham Martin as Special Assistant for Refugee and
Migration Affairs to the Secretary of State, effective
December 18. (For biographic details, see Department
of State press release 296 dated December 18.)

Belgium

Agreement extending the supplementary income tax
protocol signed at Brussels May 21, 1965 (TIAS
6073). Effected by exchange of notes at Brussels De-
cember 11, 1967. Entered into force December 11,
1967.

Congo (Kinshasa)

Agreement for sales of agricultural commodities under
Title I of the Agricultural Trade Development and
Assistance Act of 1954, as amended (68 Stat. 454, as
amended; 7 U.S.C. 1691-1736D). Signed at Kinshasa
December 11, 1967. Entered into force December 11,
1967.

Ghana

Agreement amending the agreement for sales of agri-
cultural commodities of March 3, 1967, as amended
(TIAS 6245). Effected by exchange of notes at Accra
December 18, 1967. Entered into force December 18,
1967.

Indonesia

Agreement for sales of agricultural commodities under
Title I of the Agricultural Trade Development and
Assistance Act of 1954, as amended (68 Stat. 454, as
amended; 7 U.S.C. 1691-1736D). Signed at Djakarta
November 22, 1967. Entered into force November 22,
1967.

Check List of Department of State
Press Releases: December 25-31

Press releases may be obtained from the OflBce
of News, Department of State, Washington, D.C.
20520. , ^. ,

Release issued prior to December 25 which
appears in this issue of the Bulletin is No. 292
of December 11.

No.

t302 12/26

' Not in force.

*303
t304

t305
t306

12/26
12/26

12/29

12/27

t307 12/29

Subject

Agreement with Belgium pro-
longing the income tax
protocol of May 21, 1965.

Foreign policy conference, Mi-
ami, Fla., Jan. 16.

Extension of U.S.-Mexican
radio broadcasting agree-
ment.

U.S. note of Dec. 29 to U.S.S.R.

U.S. note of Dec. 4 to Royal
Cambodian Government.

Implementation of Katzenbach
report.

* Not printed.

tHeld for a later Issue of the Bulletin.

104

DEPARTMENT OF STATE BTJLUETIK

INDEX January 15, 1968 Vol. LVII, No. llfiO

Atomic Energy. United States Presents Views on
the Question of General and Complete Dis-
armament (Fisher) 97

Australia

President Johnson Mourns Death of Prime
Minister Holt of Australia (Johnson) ... 71

President Johnson Visits Australia, Thailand,
South Viet-Nam, Paljistan, and Italy in 4%-
Day Round-the-World Journey (Johnson,
McEwen, texts of joint statements) .... 69

Cyprus. U.N. Peace Force in Cyprus Extended
Through March 1968 (Goldberg, text of res-
olution) 95

Department and Foreign Service. Designations

(Martin) 104

Disarmament. United States Presents Views on
the Question of General and Complete Dis-
armament (Fisher) 97

Economic Affairs

President Johnson Signs Proclamation To Carry
Out the Kennedy Round Tariff Agreements
(Johnson, text of proclamation) 88

United States and Korea Sign New Cotton Tex-
tile Agreement (text of U.S. note) 101

Italy. President Johnson Visits Australia, Thai-
land, South Viet-Nam, Pakistan, and Italy in
414-Day Round-the-World Journey (Johnson,
McEwen, tests of joint statements) .... 69

Korea

President Johnson Visits Australia, Thailand,
South Viet-Nam, Palcistan, and Italy in 4%-
Day Round-the-World Journey (Johnson, Mc-
Ewen, texts of joint statements) 69

United States and Korea Sign New Cotton Tex-
tile Agreement (test of U.S. note) .... loi

Non-Self-Governing Territories. President John-
son Visits Australia, Thailand, South Viet-

• Nam, Paljistan, and Italy in 4%-Day Round-
the-World Journey (Johnson, McEwen, texts
of joint statements) 69

Pakistan. President Johnson Visits Australia
Thailand, South Viet-Nam, Paliistan, and Italy
in 4%-Day Round-the-World Journey (John-
son, McEwen, texts of Joint statements) . . 69

Presidential Documents

President Johnson's Christmas Message to the
Nation 79

President Johnson Gratified by U.N. Endorse-
ment of Agreement on Rescue and Return of
Astronauts and Space Objects 85

President Johnson Mourns Death of Prime Min-
ister Holt of Australia 71

President Johnson Signs Proclamation To Carry
Out the Kennedy Round Tariff Agreements . 88

President Johnson Visits Australia, Thailand,
South Viet-Nam, Pakistan, and Italy in 414-
Day Round-the-World Journey 69

Refugees. Designations (Martin) 101

South Africa. U.N. Condemns South Africa's
Violation of Rights of South West Africans
(Goldberg, text of resolution) 92

South West Africa. U.N. Condemns South Af-
rica's Violation of Rights of South West
Africans (Goldberg, text of resolution) ... 92

Space

Outer Space Treaty Registered With U.N. Secre-
tary-General (text of three-power note) . . 100

President Johnson Gratified by U.N. Endorse-
ment of Agreement on Rescue and Return of
Astronauts and Space Objects (Johnson) . . 85

United Nations Endorses Text of Agreement on
Rescue and Return of Astronauts and Space
Vehicles (Goldberg, Reis, texts of resolution
and agreement) SO

Thailand. President Johnson Visits Australia,
Thailand, South Viet-Nam, Pakistan, and Italy
in 4%-Day Round-the-World Journey (John-
son, McEwen, texts of joint statements) ... 69

Trade. President Johnson Signs Proclamation To
Carry Out the Kennedy Round Tariff Agree-
ments (Johnson, text of proclamation) ... 88

Treaty Information

Current Actions 103

Outer Space Treaty Registered With U.N. Sec-
retary-General (textof three-power note) . . 100

President Johnson Gratified by U.N. Endorse-
ment of Agreement on Rescue and Return of
Astronauts and Space Objects (Johnson) . . 85

United Nations Endorses Text of Agreement on
Rescue and Return of Astronauts and Space
Vehicles (Goldberg, Reis, texts of resolution
and agreement) 80

United States and Korea Sign New Cotton Tex-
tile Agreement (text of U.S. note) . . . . 101

United Nations

Outer Space Treaty Registered With U.N. Secre-
tary-General (text of three-power note) . . . 100

U.N. Condemns South Africa's Violation of
Rights of South West Africans (Goldberg, text
of resolution) 92

United Nations Endorses Text of Agreement' on
Rescue and Return of Astronauts and Space
Vehicles (Goldberg, Reis, texts of resolution
and agreement) 80

U.N. Peace Force in Cyprus Extended Through
March 1968 (Goldberg, text of resolution) . . 95

United States Presents Views on the Question of
General and Complete Disarmament (Fisher) . 97

Viet-Nam

President Johnson's Christmas Message to the
Nation 79

President Johnson Visits Australia, Thailand,
South Viet-Nam, Pakistan, and Italy in 4%-
Day Round-the-World Journey (Johnson, Mc-
Ewen, texts of joint statements) 69

Name Index

Fisher, Adrian S 97

Goldberg, Arthur J '' 80 92 95

Johnson. President '. W, 71, 79, 85, 88

Martin, Graham 104

McEwen, John ..'..'' 69

Reis, Herbert . . . 80

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THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY

{

THE

DEPARTMENT

OF

STATE

BULLETIN

PRESIDENT JOHNSON'S NEWS CONFERENCE OF JANUARY 1 (Excerpts) 105
SECRETARY RUSKS NEWS CONFERENCE OF JANUARY 4 116

U.N. ESTABLISHES AD HOC COMMITTEE TO STUDY USE OF OCEAN FLOOR

Statement hy Ambassador Artlmr J. Goldberg and Text of Resolution 125

ACTION PROGRAM ON THE BALANCE OF PAYMENTS

Statement by President Johnson 110

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETI

Vol. LVIII No. 1491
January 22, 1968

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Note: Contents of this publication are not
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STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed in
the Readers' Ouide to Periodical Literature.

The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
tvith information on developments in
the field of foreign relations and on
the work of the Department of State
and the Foreign Service,
The BULLETIN includes selected
press releases on foreign policy, issued
by the White House and the Depart-
ment, and statements and addresses
made by the President and by the
Secretary of State and other officers
of the Department, as well as special
articles on various phases of interna-
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Department. Information is included
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agreements to which the United
States is or may become a party
and treaties of general international
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national relations are listed currently.

I

President Johnson's News Conference of January 1

Following are excerpts from a neios confer-
ence held by President Johnson at the LBJ
Ranch, Johnson City, Tex., on January 1.

The President: Good morning, ladies and
gentlemen. I hope all of you had a good Christ-
mas. I wish for each of you a happy new year.

I have asked you to come here today for a
brief amiouncement, the details of which will
be carried in a more lengthy statement ^ which
will be available to you later.

The statement that I will make here concerns
a firm and decisive step that the United States
Government has taken today to impi'ove our
balance-of -payments situation.

I am taking a series of actions that are de-
signed to reduce our balance-of-payments defi-
cit by $3 billion as a target in the year ahead,
1968.

There are a good many details comiected with
each of these five specific actions. I counsel you
to follow those details in the more formal state-
ment.

But to roughly outline for you now those five
decisive steps, I will say that the first is an
Executive order ^ that I signed at 10:45 this
morning that will give to the Secretary of Com-
merce, delegate to him, authority the President
presently has to regulate foreign investment.

We anticipate that foreign investment
abroad, which was in the neighborhood of some
$5 billion this past year, as a result of the re-
straints eiiected by this mandatory program,
contrasted to the voluntary program which we
have just had — our target is to improve our
balance-of-payments situation by an additional
SI billion as a result of tightening up on for-
eign investment abroad. The specific areas of
the world which will be affected can come in
the detailed statement.

Second, the Federal Eeserve Board will exer-

' See p. 110.
' See p. 114.

JANUARY 22, 1968

cise authority in connection with loans to be
made abroad, some $9 billion last year.

We have, as a target to improve our balance-
of-payments situation, as a result of the au-
thority I delegate to the Federal Reserve Board,
and the authority it already has — the regula-
tion will follow that authority — to save an ad-
ditional half billion dollars by tightening up on
the loans made abroad. That will be $1^^ billion.

I am directing the Secretary of State, the
Secretary of Defense, and other appropriate
members of my Cabinet to make a thorough,
detailed study to effectuate every possible re-
straint we can in aid and in defense expendi-
tures abroad, with a target goal of $500 million
of improvement from our present defense, aid,
and other expenditures abroad.

That would make $2 billion.

In addition, we now have a deficit of about
$2 billion each year in our tourist account. We
have appointed a committee headed by Mr.
Robert McKinney, of Santa Fe, New Mexico,
and I am asking him for a report on tourism
in the next 90 days.

In the meantime, the President is appealing
to all American citizens to help their country
in this situation by deferring any travel outside
the Western Hemisphere that is possible to
defer.

As I say, we have a net deficit of $2 billion in
our travel-tourism account. We hope that our
target of saving $500 million in tourism will be
a realistic one. That will depend on the coopera-
tion we get from the citizens themselves, and
from the Congress, which will be asked to enact
certain legislation in that field.

That makes $2.5 billion.

We have sent repi-esentatives of the President
to various countries today to exchange views
with our friends in the world about our trade
situation, our imports into this country, and our
exports out of this country. We expect to formu-
late a program. Our target is to im.prove our
trade balance by a minimum of $500 million to

105

$750 million. The details of that program will
be announced following these consultations.

If it is necessary, as a result of the nature and
scope of the program we feel desirable, we will
ask the Congress to act in that field.

In the last two fields — tourism and trade — we
may and very likely will have a message later
to the Congress in that connection.

So, in summary, through this series of five
direct actions, we are determined to improve our
balance-of-payments situation in the neighbor-
hood of $3 billion, and to bring it as closely into
balance as is possible in the year 1968.

I will be glad to take some limited questions
from you on this or on other matters.

I have staif here to give you a detailed back-
gi-ounding on all the problems relating to these
five specific steps — Mr. [W. W.] Rostow, Mr.
[Joseph A.] Califano, and Mr. [Ernest] Gold-
stein from my Washington office, who have
come here this morning.

Wliile I don't want to cut off questioning, I
am very anxious for this very important story
to go out, and I am very anxious for you to have
all the information you need in connection with
it.

If Mr. Rostow, Mr. Goldstein, and Mr. Cali-
fano will come up here now, I will take ques-
tions on this or any other subject for a period
of a very few minutes and then yield to them.

Miss Thomas [Helen Thomas, United Press
International] ?

Q. Do you see any prospects for peace or the
end of the Viet-Nam war this year, the new
year?

The President: We are very hopeful that we
can make advances toward peace. We are pur-
suing every possible objective. We feel that the
enemy knows that he can no longer win a mili-
tary victory in South Viet-Nam. But when he
will reach the point where he is willing to give
us evidence that would justify my predicting
peace this year— I am unable to do so — that is
largely up to him.

Mr. Horner [Garnett D. Horner, Washington
Evening Star] ?

Q. Mr. President, can you tell us what type of
legislation you are considering in the- tourism
field? For instance, cutting off customs exemp-
tions, or what type of things?

The President: I think we had better wait
until we have that program completely formu-

lated. I think that there are several items that
are still under consideration. We believe that
the most effective action that could be taken
would be for the citizens themselves to realize
that their traveling abroad and spending their
dollars abroad is damaging their country. If
they just have a trip in them that must be made,
if they could make it in this hemisphere or see
their own country, it would be very helpful.

We are going to try to make that appeal to
them. But we are going to support it to what-
ever extent is necessary to try to reach our target
goal of $500 million improvement in the tourism
situation.

Q. Mr. President, do you plan to ask Con-
gress to remove the gold cover on domestic cur-
rency?

The President: We have made no recommen-
dation on that in this message at all.

Mr. Lisagor [Peter Lisagor, Chicago Daily
News] ?

Q. Mr. President, Secretary [of Labor W.
Willard} Wij'ts said the other day that if you
don't have a tax increase, then you will have to
face up to the question of wage and price con-
trols. How serious do you regard that prospect?

The President: I think we are going to have
a tax increase. In this statement this morning, I
ask both the employers and employees to exer-
cise the utmost restraint in connection with their
negotiations. I do not hold to the view that wage
or price controls are imminent at all. And I
might say that statement was made without my
knowledge. I don't know how accurately he is
quoted. But the Government has not given con-
sideration at this time to action of that type.

Q. Mr. President, when you were in Rome,
did you and the Pope discuss his sending a peace
mission to Hanoi?

The President: The answer is "No," although
I don't want to get into the process of elimi-
nating what we discussed and what we didn't
discuss.

But we did not discuss specifically his sending
any mission. We discussed a number of subjects
where, if he decided, if His Holiness decided, he
wanted to act in that area, that could call for
such action. But we did not specifically discuss it.

Q. May I follow that up a hit? The Foreign
Minister of North Viet-Nam according to some
reports

106

DEPARTMENT OF STATE BULLETIN

The President : We ai'e familiar with those re-
ports. As of now, they are just reports. "We are
evahiating them. Tliey come from a newspaper-
man who has written in tliis fiekl lieretofore. We
liave found it advisable to carefully check the
statements in the report. We are doing that now.

Q. Mr. President, does your statement con-
tain, and if not we xvould like to have it in your
own words, just why

The President: My statement is my own
words, Mr. Frankel [Max Frankel, New York
Times].

Q. No; that is not what I meant. If it does not
say, could you tell us exactly what makes these
more stringent measures necessary and why you
think the voluntary program of restraints
failed?

Mr. President: Generally speaking, our bal-
ance of payments has had a deficit for the last
17 out of the last 18 years. In 17 of the last 18
years we have had a deficit. The first three quar-
ters of this year, that deficit was within bounds.
In tlie last quarter, it goes much further than we
would like to see it go. It makes it very evident
to me that those who are determined to preserve
the soundness of the dollar and our entire fiscal
situation — that direct additional actions are nec-
essary in this field where we have, as I say, had
a deficit in 17 of the last 18 years.

For that reason, we have promulgated this
program and we are placing it into effect. We be-
lieve that these actions will result in a reason-
able balance in the coming year.

Mr. Davis [Sid Davis, Westinghouse Broad-
casting Co.]?

Q. Mr. President, the Camiodian Prince
Sihanouk is quoted as saying he would like to
meet with an envoy from the United States to
discuss -possible U.S. military action against the
North Vietnamese seeking sanctuary in Cam-
bodia. Can you tell us anything official regard-
ing this newspaper report?

The President: I can say that we have read
with a great deal of interest — and I might say
pleasure — the quoted statements by Prince
Sihanouk. We are studying those statements
ver^' carefully, and confirming them.

Wlien we have anything to announce on it,
I will be in touch with you. I would say that
we are quite encouraged by the reactions of

Prince Sihanouk as reflected by the newspaper
story. Any further announcement will be made
after we have gone into it more thoroughly
and more definite statements can be made.

Mr. Davis? And then I believe Dan Rather
[CBS News] asked a question.

Dan, do you want yours, and then I will go to
Mr. Davis?

Q. Thank you very much. Mr. President,
Newsweek magazine has described, as I read it,
your meeting with the Pope as somewhat less
than cordial. Coxdd you clear us up on that
without getting into specifics of what you and
the Pope discussed?

The President: I tried to clear Newsweek up
on it, but I just couldn't do it. It is just made out
of the whole cloth. It just didn't happen. The
people who participated in the conference from
our side were startled and shocked at their in-
formation. We told them it was just completely
untrue. So that is our version. You can take
Newsweek's or ours, whichever you want.

Mr. Davis [Saville Davis, Christian Science
Monitor] ?

Q. Mr. President, since one of the leading
factors in the foreign confidence in the dollar
is the degree of the control of inflation in this
country, do you anticipate that the tax increase
and other measitres of the sort will keep the ris-
ing of prices in this country suffldently stable
in the coming year?

The President: We are very concerned with
that, Mr. Davis. Prices have risen more than
we would like to see them rise. We still have
the best record of any industrial country in the
world. But we are not happy witli the record
we have ourselves.

This statement, in some degree, deals with it.
We have asked the Government officials respon-
sible for supervision in this field to exert re-
newed eiforts in an attempt to ask employers
and employees to keep their negotiating agree-
ments within the ball park so far as increased
productivity is concerned and not let the in-
creases in one field go above increased produc-
tivity in the other. We are hopeful that that
action will be successful.

Q. Mr. President, you spoke about the bal-
ance-of -payments deficit in the last quarter.
What is your estimate of that for the year
as a whole?

JANUARY 2 2, 1068

107

The President: I have that statement in the
detailed statement, but I think it wiU be some-
there in the neighborhood of $3^2 bilhon to
$4 billion.

Q. That is for the year as a whole f

The President. -Th^t IS coTvect.

Let's not prolong tliis thing if /^^^^f ^^/^^
get this story. There are a lot of details just
as I have repeated here, that these men are wait-
?n. here to tell you. I want U> answer any ques-
fei you have that is really important to you;
otherwise, let's go on with the purpose of the
conference.

0 Mr. President, you are urging emvloyers
and employees to keep within the hall park. Is
Zere anyspeciiic iigure, such as a gmdeUne
estimate, specifically?

The President: I would refer you to my state-
ment in the lengthy statement which you will
see as soon as you get a chance to get to it We
want very much to try to emphasize the neces-
sity of following guidelines. The guideline is
the increased productivity. We feel that you can
justify only the increased productivity.

0 Sir, I was just wondenng if you have any
idea now a.s to what the likely deficit in your
fiscal 1969 budget might he since th^ could have
an impact?

The President: No. A lot of things could
have impacts. But I think we have covered m
this detailed statement about as much as we can
If you have any further questions after you get
that and file your story, submit them to Mr.
Christian [George Christian, Press Secretary to
the President] , and we will try to work it out.
Thank you very much.
The Press: Thank you, Mr. President.
[During a briefing subsequent to the news confer-
encrthe following exchanges between the President
and reporters took place.]

Q. You are asking people not to travel, and
you are considering legislation toward that end.
The President: We will have legislation in
that direction. We would also like to have vol-
untary action upon the part of all of our citi-
zens. We believe we can have both. We think
that we can amiounce, number one, that it is
important to the country that every citizen re-
assess his travel plans and not travel outside
of this hemisphere except under the most im-
portant, urgent, and necessary conditions.

Second, we think that we can develop certam
lecrislation that will insure and guarantee our
reaching our goal of a half-billion dollars to
three-quarter billion dollars of the reduction
from the $2 billion deficit we already have.

It must be obvious that our people are travel-
inc a good deal when you consider all the travel
that comes here and deduct it from what we
travel abroad, and we still have a $2 billion

deficit. , . ,1,1

Now we have a target of reducing that by a
half to three-quarters of a billion dollars We
don't mean to threaten anybody with anything.
W^e do expect that it will be necessary to have
certain adjustments made in our present travel
policy, and we will ask the Congress to do it

But we want to do that in concert with the
Congress, after discussing_ it with them, and
after reacliing agreement with them.

Q Mr. President, I am just curious as to
whether the nature of this legislation imll affect
travel itself or the amount spent on travel.

The President: I wonder if you can wait
until we talk to the Congress about that. I think
it will affect both. But let's don't tie it down and
get hard on it, fixed, right here on January 1st,
when Congress doesn't come back until Janu-
ary 15th. We would like to explore with them,
eive them our views of the most effective way ot
achieving this target, get their views, and try
to get something that would be acceptable to
both the executive and the legislative branches.
But we don't want to imply a threat to any-
one on anything. We are too happy this New
Year's, Max, to get into that field.
Q. Thank you, Mr. President.
The President: You can be sure, though, that
we will ask Congress for legislation primarily to
do with tourism and trade.

The other three— direct investment, banJj
loans, and reducing our own defense expendi-
tures and aid expenditures abroad— the Presi-
dent can do ; and he has done it. That is that.

One thing that is positive I would like to
leave with all of you. This President, this ad-
ministration, and we think the Congress, m-
cludino- Democrats and Republicans, are deter-
mined to achieve our goal of trying to bring our
balance of payments in better equilibrium. We
have outlined it here to the extent of some '^

billion. . , c

It is pretty difficult to estimate a quarter ot

a billion here where we may fall short and a

108

DEPAKTMENT OF STATE BULLETIN

quarter of a billion we might exceed. But we
have a target and we are going to put all the
muscle tliat this leadership, this government,
has in the executive branch and the legislative
branch bcliind the dollar, keeping our financial
house in order.

[At this point the President responded to a question
relating to discussions to be held with NATO allies on
minimizing foreign exchange costs.]

The President: They have made arrange-
ments to offset our expenditures to the extent
that we could work them out witli tlie British
and the Germans as a result of the McCloy mis-
sion.' That is not included here.

Tliese steps have been under consideration
for some time. Before they are effectuated, we
want to exchange views with all the leaders of
the world. I have been in communication with
them myself.

In addition, I will have representatives com-
municate with them in various parts of the
world.

I have this balance-of -payments program an-
nouncement behind me now. We will be working
in the days ahead on the budget. Mr. Schultze
[Charles L. Schultze, Director, Bureau of the
Budget] will be here tomorrow. He will be ac-
companied by Mr. Cater [Douglass Cater, Spe-

' For background, see Bulletin of May 22, 1967, p.
788.

cial Assistant to the President], Mr. Gardner
[John W. Gardner, Secretary of Health, Edu-
cation, and Welfare], and some other jseople. I
will ask George to give you the announcement.

Li addition, we will be working all the time
we are here on appointments, on budget reduc-
tions, and on the budget for next year.

As all of you know, because of the late ad-
journment date we are behind on the reductions
on wliicli they resoluted in the last few days, as
well as getting to work on the new budget.

I am naming Mr. Gardner Acldey, the pres-
ent Chairman of the President's Council of Eco-
nomic Advisers, as the new Ambassador to Italy.
We have received word from the Italian Gov-
ernment this morning clearing the agrement.
When the Congress resumes its deliberations,
his name will go forward to the Senate.

I consider Mr. Ackley one of my most trusted
and closest friends and advisers. While he has
been on the Economic Council now for several
years, he agreed to stay on an extra year, which
ends in January. I have asked him to take this
post to Italy. Because of his interest in that
field and his Icnowledge of the political and eco-
nomic conditions in Italy, and his interest in
that area, he has agreed to accept. The Senate
willing, he will be going to that post as soon as
he is confirmed.

Thank you very much.

The Press: Thanh you, Mr. President.

JANtTART 2 2, 1968

109

Action Program on the Balance of Payments

Statement ly President Johnson ^

Where We Stand Today

I want to discuss with tlie American people a

subject of vital concern to the economic health

and well-being of this nation and the free world.

It is our international balance-of-payments

position.

The strength of our dollar depends on the
strength of that position.

The soundness of the free-world monetary
system, which rests largely on the dollar, also
depends on the strength of that position.

To the average citizen, the balance of pay-
ments, and the strength of the dollar and of the
international monetary system, are meaningless
phrases. They seem to have little relevance to our
daily lives. Yet their consequences touch us all —
consumer and captain of industry, worker,
farmer, and financier.

More than ever before, the economy of each
nation is today deeply intertwined with that of
every other. A vast network of world trade and
financial transactions ties us all together. The
prosperity of every economy rests on that of
every other.

More than ever before, this is one world — in
economic affairs as in every other way.

Your job, the prosperity of your farm or busi-
ness, depends directly or indirectly on what hap-
pens in Europe, Asia, Latin America, or Africa.
The health of the international economic sys-
tem rests on a sound international money in the
same way as the health of our domestic money.
Today, our domestic money — the U.S. dollar — is
also the money most used in international trans-
actions. That money can be sound at home — as it
surely is — yet can be in trouble abroad — as it
now threatens to become.

' Issued at Johnson City, Tex., on Jan. 4 (White
House press release (San Antonio, Tex.) ).

In the final analysis its strength abroad de-
pends on our earning abroad about as many
dollars as we send abroad.

U.S. dollars flow from these shores for many
reasons — to pay for imports and travel, to fi-
nance loans and investments, and to maintain
our lines of defense around the world.

When that outflow is greater than our earn-
ings and credits from foreign nations, a deficit
results in our international accounts.

For 17 of the last 18 years we have had such
deficits. For a time those deficits were needed to
help the world recover from the ravages of !
World War II. They could be tolerated by the
United States and welcomed by the rest of the
world. They distributed more equitably the
world's monetary gold reserves and supple-
mented them with dollars.

Once recovery was assured, however, large
deficits were no "longer needed and indeed began ,
to tlireaten the strength of the dollar. Since i
1961, your Government has worked to reduce
that deficit.

By the middle of the decade, we could see j
signs of success. Our annual deficit had been re- j
duced two-thirds— from $3.9 billion in 1960 to j
$1.3 billion in 1965.

In 1966, because of our increased respond- \
hility to arm and supply our men in Southeast j
Asia, progress was interrupted, with the deficit ,
remaining at the same level as 1965 — ahout $1.5 \
billion. I

In 1967, progress was reversed for a number i

of reasons :

—Our costs for Viet-Nam increased further, j

— Private loans and investments abroad in-j
creased. 1

—Our trade surplus, although larger than
1966, did not rise as much as we had expected.

— Americans spent more on travel abroad.

110

DEPAKTStENT OF STATE BULLETIN

Added to these factors was the uncertainty
and unrest surrounding the devaluation of the
British pound. This event strained the interna-
tional monetary system. It sharply increased
our I lalance-of -payments deficit and our gold
sales in the last quarter of 1967.

The Problem

Preliminary reports indicated that these con-
ditions may result in a 19G7 balance-of-pay-
ments deficit in the area of $3.5 to $4 billion —
the highest since 1960. Although some factors
affecting our deficit will be more favorable in
1968, my advisere and I are convinced that we
must act to bring about a decisive improvement.

We caimot tolerate a deficit that could
threaten the stability of the international mone-
tary system — of which the U.S. dollar is the
bulwark.

AVe cannot tolerate a deficit that could en-
danger the strength of the entire free-world
economy and thereby threaten our unprece-
dented prosperity at home.

A Time for Action

The time lias now come for decisive action
designed to bring our balance of payments to —
or close to — equilibrium in the year ahead.

The need for action is a national and inter-
national responsibility of the highest priority.

I am proposing a program which will meet
this critical need and at the same time satisfy
four essential conditions :

— Sustain the growth, strength, and prosper-
ity of our own economy.

— Allow us to continue to meet our interna-
tional responsibilities in defense of freedom, in
promoting world trade, and in encouraging eco-
nomic growth in the developing countries.

— Engage the cooperation of other free na-
tions, whose stake in a sound international mon-
etary system is no less compelling than our own.

— Recognize the special obligation of those
nations with balance-of-payments surpluses to
bring their payments into equilibrium.

The First Order of Business

The first line of defense of the dollar is the
strength of the American economy.

No business before the returning Congress
will be more urgent than this : to enact the anti-
inflation tax which I have sought for almost a
year. Coupled with our expenditure controls

and appropriate monetary policy, this will help
to stem the inflationary pressures which now
threaten our economic prosperity and our trade
surplus.

No challenge before business and labor is
more urgent than this: to exercise the utmost
responsibility in their wage-price decisions,
which afi'ect so directly our competitive posi-
tion at home and in world markets.

/ have directed the Secretaries of Commerce
and Lahor and the Chairman of the Council of
Economic Advisers to work with leaders of
business and l^bor to make more effective our
voluntary program of wage-price restraint.

I have also instructed the Secretaries of Com-
merce and Labor to work with unions and com-
panies to prevent our exports from being re-
duced or our imports increased by crippling
work stoppages in the year ahead.

A sure way to instill confidence in our dol-
lar— both here and abroad — is through these
actions.

The New Program

But we must go beyond this and take addi-
tional action to deal with the balance-of-pay-
ments deficit.

Some of the elements in the program I pro-
pose will have a temporary but immediate effect.
Others will be of longer range.

All are necessary to assure confidence in the
American dollar.

Temporary Measures

1. Direct Investment

Over the past 3 years, American business has
cooperated with the Government in a voluntary
program to moderate the flow of U.S. dollars
into foreign investments. Business leaders who
have participated so wholeheartedly deserve the
appreciation of their country.

But the savings now required in foreign in-
vestment outlays are clearly beyond the reach
of any voluntary program. This is the unani-
mous view of all my economic and financial
advisers and the Chairman of the Federal Re-
serve Board.

To reduce our balance-of-paytnents deficit by
at least $1 billion in 1968 from the estimated
1967 level, I am invoking my authority tinder
the banking laws to establish a mandatory pro-
gram that will restrain direct investment
abroad.

JANUARY 2 2, 1968

111

This program will be effective immediately.
It will insure success and guarantee fairness
among American business firms with overseas
investments.

The program will be administered by the De-
partment of Commerce and will operate as fol-
lows : ^

— As in the voluntary program, overall and
individual company targets will be set. Authori-
zations to exceed these targets will be issued
only in exceptional circumstances.

— New direct investment outflows to coun-
tries in continental Western Europe and other
developed nations not heavily dependent on our
capital will be stopped in 1968. Problems aris-
ing from work already in process or commit-
ments under binding contracts will receive spe-
cial consideration.

— New net investments in other developed
countries will be limited to 65 percent of the
1965-66 average.

— New net investments in the developing
countries will be limited to 110 percent of the
1965-66 average.

This program also requires businesses to con-
tinue to bring back foreign earnings to the
United States in line with their own 1964r-66
practices.

In addition, I have directed the Secretary of
the Treasury to explore toith the chairmen of
the House Ways and Means Committee and
Senate Finance Committee legislative proposals
to induce or encourage the repatriation of ac-
cumulated earnings hy TJ.S -owned foreign
businesses.

2. Lending by Financial Institutions

To reduce the halance-of-payments deficit hy
at least another $500 million, I have requested
and authorized the Federal Reserve Board to
tighten its program restraining foreign lending
hy hanks and other financial institutions.

Chairman [William McChesney] Martin has
assured me that this reduction can be achieved :

— Without harming the financing of our ex-
ports ;

— Primarily out of credits to developed coun-
tries without jeopardizing the availability of
funds to the rest of the world.

' For regulations issued by the Department of Com-
merce on Jan. 1, see 33 Fed. Reg. 49.

Chairman Martin believes that this objective
can be met through continued cooperation by
the financial community. At the request of the
Chairman, however, I have given the Federal
Reserve Board standby authority to invoke
mandatory controls, should such controls be-
come desirable or necessary.

3. Travel Abroad

Our travel deficit tliis year will exceed $2 bil-
lion. To reduce tliis deficit by $500 million :

— / am asking the Amencan people to defer
for the next 2 years all nonessential travel out-
side the Western Hemisphere.

— / am asking the Secretary of the Treasury
to explore with the appropriate congressional
co7nmittees legislation to help achieve this ob-
jective.

4. Government Expenditures Overseas

We cannot forgo our essential commitments
abroad, on which America's security and sur-
vival depend.

Nevertheless, we must take every step to re-
duce their impact on our balance of payments
without endangering our security.

Recently, we have reached important agree-
ments with some of our NATO partners to
lessen the balance-of-payments cost of deploy-
ing American forces on the continent — troops
necessarily stationed there for the common de-
fense of all.

Over the past 3 years, a stringent program
has saved billions of dollars in foreign exchange.

I am convinced that much more can be done.
/ believe we should set as our target avoiding
a drain of another $500 million on our balance
of payments.

To this end, I am taking three steps.

First, I have directed the Secretary of State
to initiate prompt negotiations with our NATO
allies to minimize the foreign exchange costs of
keeping our troops in Europe. Our allies can
help in a number of ways, including :

— The purchase in the United States of more
of their defense needs.

— Investments in long-term United States
securities.

/ have also directed the Secretaries of State,
Treasury, and Defense to find similar ways of
dealing with this problem in other parts of the
world.

112

DEPARTMENT OF STATE BULLETIN

Second, I have instructed the Director of the
Budget to find ways of reducing the numher
of American civilians working overseas.

Third, I have Instructed the Secretary/ of De-
fcme to find ways to reduce further the foreign
exchange impact of personal spending hy U.S.
forces and their dependents in Europe.

Long-Term Measures

5. Export Increases

American exports provide an important
source of earnings for our businessmen and jobs
for our workers.

They are the cornerstone of our balance-of-
payments position.

Last year we sold abroad $oO billion worth
of American goods.

"\Yliat we now need is a long-range systematic
program to stimulate the flow of the products
of our factories and farms into overseas mar-
kets.

"We must begin now.

Some of the steps require legislation :

/ shall ash the Congress to support an inten-
sified 5-year, $200 miUion Commerce Depart-
ment program to promote the sale of American
goods overseas.

I slicdl also ask the Congress to earmark $500
million of the Export-Import Bank authoriza-
tion to:

— Provide better export insurance.
— Expand guarantees for export financing.
— Broaden the scope of Government financing
• of our exports.

' Other measures require no legislation.

I have today directed the Secretary of Com-
merce to begin a Joint Export Association Pro-
gram. Through these associations, we will pro-

' vide direct financial support to American cor-
porations joining together to sell abroad.

And finally, the Export-Import Bank —
through a more liberal rediscount system — will
encourage banks across the Nation to help firms
increase their exports.

6. Nontariff Barriers

In the Kennedy Round, we climaxed three
decades of intensive effort to achieve the
greatest reduction in tariff barriers in all the
history of trade negotiations. Trade liberaliza-

tion remains the basic policy of the United
States.

We must now look beyond the great success
of the Kemiedy Eound to the problems of non-
tarill barriers that pose a continued threat to
the growth of world trade and to our competi-
tive position.

American commerce is at a disadvantage be-
cause of the tax systems of some of our trading
partners. Some nations give across-the-board
tax rebates on exports which leave their ports
and impose special border-tax charges on our
goods entering their country.

International rules govern these special taxes
under the General Agreement on Tariffs and
Trade. These rules must be adjusted to expand
international trade further.

In keeping with the principles of cooperation
and consultation on common problems, I have
initiated discussions at a high level with our
friends abroad on these critical matters — par-
ticularly those nations with balance-of-pay-
ments surpluses.

These discussions will examine proposals for
prompt cooperative action among all parties to
minimize the disadvantages to our trade which
arise from differences among national tax sys-
tems.

We are also preparing legislative measures in
this area whose scope and nature will depend
upon the outcome of these consultations.

Through these means we are determined to
achieve a. substantial improvement in our trade
surplus over the coming years. In the year im-
mediately ahead, we expect to realize an im-
provement of $500 million.

7. Foreign Investment and Travel in U.S.

We can encourage the flow of foreign funds
to our shores in two other ways:

— First, by an intensified program to attract
greater foreign investment in V.S. corporate se-
curities, carrying out the principles of the For-
eign Investors Tax Act of 1966.

— Second, by a program to attract more vis-
itors to this land. A special task force, headed
by Robert McKinney of Santa Fe, New Mexico,
is already at work on measui^es to accomplish
this. I have directed the task force to report
within 1^5 days on the immediate measures that
can be taken and to make its long-term recom-
mendations within 90 days.

JANUARY 22, 1908
286-491—68 2

113

Meeting the World's Reserve Needs

Our movement toward balance will curb the
flow of dollars into international reserves. It
will therefoi-e be vital to speed up plans for the
creation of new reserves — the special drawing
rights — in the International Monetary Fund.
These new reserves will be a welcome compan-
ion to gold and dollars and will strengthen the
gold exchange standard. The dollar will remain
convertible into gold at $35 an ounce, and our
full gold stock will back that commitment.

A Time for Responsibility

The program I have outlined is a program of
action.

It is a program which will preserve confi-
dence in the dollar, both at home and abroad.

The U.S. dollar has wrought the greatest eco-
nomic miracles of modern times.

It stimulated the resurgence of a war-ruined
Europe.

It has helped to bring new strength and life
to the developing world.

It has underwritten unprecedented prosperity
for the American people, who are now in the
83d month of sustained economic growth.

A strong dollar protects and pi-eserves the
prosperity of businessman and banker, worker
and farmer — here and overseas.

The action program I have outlined in this
message will keep the dollar strong. It will ful-
fill our responsibilities to the American people
and to the free woi'ld.

I appeal to all of our citizens to join me in
this very necessary and laudable effort to pre-
serve our country's financial strength.

President Signs Executive Order
on Capital Transfers Abroad

AN EXECUTIVE ORDER'
GovEENiNo Certain Capital Transfers Abroad

By virtue of the autliority vested in the President by
section 5(b) of the act of October 6, 1917, as amended
(12 U.S.C. O'la), and in view of the continued existence
of the national emergency declared by Proclamation No.
2914 of December 1(5, 1950, and the Importance of
strengthening the balance of payments position of the
United States during this national emergency, it is
hereby ordered :

' No. 11387 ; 33 Fed. Reg. 47.

1. (a) Any person subject to the jurisdiction of the
United States who, alone or together with one or more
affiliated persons, owns or acquires as much as a 10%
interest in the voting securities, capital or earnings of
a foreign business venture is prohibited on or after the
effective date of this Order, except as expressly author-
ized by the Secretary of Commerce, from engaging in
any transaction involving a direct or indirect transfer
of capital to or within any foreign country or to any
national thereof outside the United States.

(b) The Secretary of Commerce is authorized to re-
quire, as he determines to be necessary or appropriate
to strengthen the balance of payments position of the
United States, that any person subject to the jurisdic-
tion of the United States who, alone or together with
one or more affiliated persons, owns or acquires as much
as a 10% interest in the voting securities, capital or
earnings of one or more foreign business ventures shall
cause to be repatriated to tbe United States such part
as the Secretary of Commerce may specify of (1) the
earnings of such foreign business ventures which are
attributable to such person's investments therein and
(2) bank deposits and other short term financial as-
sets which are held in foreign countries by or for the
account of such person. Any person subject to the jur-
isdiction of the United States is required on or after
the effective date of this Order, to comply with any
such requirement of the Secretary of Commerce.

(c) The Secretary of Commerce shall exempt from
the provisions of this section 1, to the extent delineated
by the Board of Governors of the Federal Reserve Sys-
tem (hereinafter referred to as the Board), banks or
financial institutions certified by the Board as being
subject to the Federal Reserve Foreign Credit Restraint
Programs, or to any program instituted by the Board
under section 2 of this Order.

2. The Board is authorized In the event that it deter-
mines such action to be necessary or desirable to
strengthen the balance of payments position of the
United States:

(a) to investigate, regulate or prohibit any transac-
tion by any bank or other financial institution subject
to the jurisdiction of the United States involving a di-
rect or indirect transfer of capital to or within any for-
eign country or to any national thereof outside the
United States ; and

(b) to require that any bank or financial institution
subject to the jurisdiction of the United States shall
cause to be repatriated to the United States such part
as the Board may specify of the bank deposits and other
short term financial assets which are held in foreign
countries by or for the account of such bank or finan-
cial institution. Any bank or financial institution sub-
ject to the jurisdiction of the United States shall com-
ply with any such requirement of the Board on and
after its effective date.

.3. The Secretary of Commerce and the Board are
respectively authorized, under authority delegated to
each of them under this Order or otherwise available
to them, to carry out the provisions of this Order, and
to prescribe such definitions for any terms used herein,
to issue such rules and regulations, orders, rulings,
licenses and instructions, and to take such other ac-
tions, as each of them determines to be necessary or
appropriate to carry out the purposes of this Order
and their respective responsibilities hereunder. The Sec-

114

DEPARTMENT OF STATE BULLETIN

retary of Commerce and the Board may each redelegate
to any agency, instrumentality or otficial of the United
States any authority under this Order, and may, in
administering this Order, utilize the services of any
other agencies. Federal or State, which are available
and appropriate.

4. The Secretary of State shall advise the Secretary
of Commerce and the Board with respect to matters
under this Order involving foreign policy. The Secre-
tary of Commerce and the Board shall consult as neces-
sary and appropriate with each other and with the
Secretary of the Treasury.

5. The delegations of authority in this Order shall
not affect the authority of any agency or official pur-
suant to any other delegation of presidential authority,
presently in effect or hereafter made, under section 5
(b) of the act of October 6, 1917, as amended (12 U.S.C.

95a).

The White House
10:4.ja.m.. Jan. 1, 1968,
L.B.J. Ranch.

U.S.-Japan Economic Talks
To Be Held at Honolulu

White House press release (San Antonio, Tex.) dated
December 2S

The "White House announced on December 28
the first meeting of the Subcommittee of the
Joint United Stcates-Japan Committee on Trade
and Economic Affairs will be held in Honolulu,
Hawaii, January 25-26. The Subcommittee was
established during the Xovember 14—15 meet-
ings between President Lyndon B. Johnson and
Japanese Prime Minister Eisaku Sato.^

At the first meeting, the Japanese delegation
will be headed by HaruM Mori, Deputy Vice
Minister of Foreign Affairs. The United States
delegation will be headed by Anthony M. Solo-
mon, Assistant Secretary of State for Economic
Affairs.

The agenda of the meeting includes a review

of the economic situation in Japan and the
United States, balance of payments cooperation,
and a review of the international economic
situation.

Hearings To Begin March 25
on Future U.S. Trade Policy

Public hearings on future U.S. trade policy
are to begin in Washington March 25, it was
announced on Dex;ember 14 by William M. Roth,
the President's Special Eepresentative for
Trade Negotiations. The hearings will be held
in connection with a study of future U.S. ti-ade
policy whicli, at the direction of the President,
the Office of the Special Representative is
conducting.

In annomicing the hearings. Ambassador
Roth declared: "Our foreign trade is of great
importance to all Americans, and we want as
many as possible to have the opportunity to
subinit their recommendations and suggestions
for U.S. policy in this field."

The topics on which testimony is invited in-
clude the competitive position of the United
States in world trade; foreign trade and foreign
investment; trade and employment; trade in
agricultural products; East- West trade; non-
tariff measures, stich as boi'der taxes and vari-
able import levies; the trade interests of the
developing countries; the impact of imports;
and export promotion. A notice appearing in
tlie Federal Register contains a fuller list of
the topics.^

The hearings will be conducted by the Trade
Information Committee of the Office of the Spe-
cial Representative for Trade Negotiations and
will be chaired by Louis C. Krauthoff II of the
Office. The other members of the Committee are
from the Departments of Agriculture, Com-
merce, Defense, Interior, Labor, State, and
Treasurj-.

^ For background, .see Bulletin of Dec. 4, 1967
742.

P-

' 32 Fed. Reg. 17997.

JANUARY 22, 1968

115

Secretary Rusk's News Conference of January 4

Press release 1 dated January 4

Good afternoon, ladies and gentlemen I
mi-ht not be able to meet today the high staiid-
ard of controversy which some of you found in
my last press conference in October,^ but I am
glad to have a chance to meet with you briefly to
look over some of the developments of 67 and
some of the agenda for '68.

I want to thank you for the reception you
kindly gave me last week and to wish each o±

you a good 1968. ^ , ■ i . n

During the month of December, I tried to call
attention to some of the constractive develop-
ments during 1967 despite the P^i^ a^<l,J^f
violence in Southeast Asia and the Middle East.
It was a productive year. President Johnson was
able to hold an unparalleled number of talks
with chiefs of state, chiefs of governments from
all over the world— perhaps through a combi-
nation of coincidence involving his normal
schedule and EXPO 67, the Punta del Este
Summit with the inter-American Presidents,
and the Manila Summit— but it was a very busy
year, with the conclusion of the Kennedy Eound
knd the decisions of the Monetary Fund on li-
quidity, the conclusion of the Space Treaty, the
great decisions taken at Punta del Este by the
Presidents of the hemisphere on the Common
Market in Latin America, a new impetus for
the Alliance for Progi-ess, dramatic develop-
ments in Asia, including the establisliment as a
growing concern of the Asian Development
Bank, a much more active regional cooperation
among the free nations of Asia— and a clear,
I think, turn of events on the ground, as far as
Viet-Nam is concerned.

And 1968 will be, indeed, a very busy year.
I would not want to spell out the agenda in any
detail, because by omission I might cause of-
fense to someone.

Obviously, our great preoccupation will be

peace in Southeast Asia. We maintain the posi-
tion that peace must be established on a durable
basis there— on a basis in which all nations, in-
cluding the small nations of Southeast Asia, can
live secure from harassment and violence
thrown against them from outside their borders
I know that you're interested in the recent
statement by the North Vietnamese Foreign
Minister [Nguyen Duy Trinh] ; and m any such
statement of that sort there are two questions :
First, what did he say? And secondly, what did

The first is fairly clear in terms of the text
of what he said. I've seen a good deal of specu-
lation about what he meant and some clarihca-
tion by Hanoi correcting some of that specula-
tion: but to determine what he meant is a more
complicated business and has to be pursued by
means other than public declarations on both
sides, and that clarification will be sought

As far as the United States is concerned, i
would call your attention once again to what
the President said in San Antonio. He said
that:''

The United States is willing to stop all aerial and
naval boml.ardment of North Viet-Nam when this will
lead promptly to productive discussions. We, of course,
assume (he continued) that while discussions proceed.
North Viet-Nam would not take advantage of the bomb-
ing cessation or limitation.

And that remains the position of the United
States, and what we need to do is find out
whether there's any increasing compatibility be-
tween the statements made by the two sides.

We will keep in very close touch with the
Government of South Viet-Nam and with the
other allies who have forces engaged in the
conflict and we will pursue as skillfully as we
can the other question of finding out whether
there's been any change in the situation.
I cannot tell you today whether there's been

'■ Bulletin of Oct. 30, 1967, p. 555.

= For President Johnson's address at San Antonio,
Tex., on Sept. 29, 1967, see ibid., Oct. 23, 1967, p. 519.

116

DEPARTMENT OF STATE BULLETIN

a change or not. Some of these statements have
ret'erred back to the statement made by Hanoi
in January.

We know that they have issued orders for an
intensLfied offensive during the winter season.
We can't help but take note of the fact that
there was an intolerable violation of the recent
New Year's cease-fire with a two-battalion at-
tack on a base camp of American forces while
that cease-fire was supposed to be effective, lead-
ing to the loss of life of American soldiers and
a large loss of life on the part of the enemy,
and that a similar large-scale attack was de-
livered on Vietnamese forces during the same
period.

These all have some bearing on the situation.
However, the determined policy of the United
States is to find a means to move toward peace
in Southeast Asia, if possible; and that will be
explored fully. If there's a desire for peace, the
United States, as President Johnson has said
more than once, will go more than halfway to
find peace.

Rut this is more complicated than it sounds
at first blush, and it would be necessary to find,
learn in detail, what the other side has in mind.

We shall also be working very hard on peace
in the Middle East. At the present time, we are
backing completely the efforts of Ambassador
[Giinnar] Jarring, who's representing the
United Nations in that area as a result of a
unanimous Security Council resolution in late
November.^ Our own position will be based
upon President Johnson's five points of last
June ; ■* but we will use our influence, publicly
and privateh% to help Ambassador Jarring's
mission achieve success.

We want very much to see the basis for a
durable and permanent peace in that troubled
part of tlie world.

The President's Balance-of-Payments Program

We shall, of course, be giving great attention
to the carrying out of the President's balance-
of-payments program announced on January
lst.° That was a far-reaching, decisive, coura-
ireous program to bring our balance-of-
payments situation nearer to equilibrium.

Now, we had in mind, when that program was
developed, the hope that we could take measureii
which would not concentrate just on one or two
elements of our society but would broadly share
the burdens, which would get the job done,
without Intruding into three important inter-

ests : one, the effort of the developing countries
to generate momentum in their own economic
and social development ; secondly, the necessity
for maintaining the security arrangements over-
seas which are required for the peace and sta-
bility of the free world; and third, to avoid
measures which might start a descending spiral
in limitation of trade, because in that direction
would come costs for everyone; and even if
equilibrium were established at some point, it
might be at a much lower level of trade for
everybody. And we think this program is de-
signed to do that.

The Travel Deficit

I would like to support, strongly and per-
sonally, the call which the President made on
American citizens to forgo unnecessary travel
outside the Western Hemisphere in the next 2
years. There are good reasons for that, even
though no one likes to ask people to change
their personal plans. But in 1967, Americans
will have spent $4 billion on tourism outside the
country ; visitors to the United States will have
spent some $2 billion, leaving a gap there of
about $2 billion.

Now, this is a dramatic increase in the sit-
uation even since 1966. I think the sharp in-
crease in American tourism abroad reflects the
continuing prosperity of the American econ-
omy and the American people, but we feel that
when we're talking about $4 billion of expen-
ditures by tourists abroad that we're entitled
to ask people to forgo unessential travel so that
we can save something like $500 million of that
in our balance-of-payments account.

I cannot speculate with you today about what
particular measures might be considered by the
Congress when they come back. The Secretary
of the Treasury has the responsibility for con-
sidering what action Congress might take in
this field. But we very much hope that just as
there was a dramatic and somewhat unexpected
rapid increase in tourism in 1967, personal deci-
sions can lead to a reduction so that by a com-
bination of reduced American travel and in-
creased foreign travel in the United States, we
can achieve the balance-of-payments objective.

We will continue to work on such subjects as

' For text, seo ihid., Dec. 18, 1967, p. 843.

* For Prosidont .Johnson's address at Washington,
D.C., on June 19, 1967, see ibid., July 10, 1967, p.
.31.

' See p. 110.

JANU.4RY 22, 1968

117

the nonproliferation treaty. We would ike very
much to bring that to an early conclusion, i
am not too pessimistic about that at the moment,
but we ought to move on from there into other
elements of disarmament-not only the arms
race between the largest powers but neighbor-
hood arms races which also are a burden upon
the peoples of these other areas and are sources
of tension and potential danger.

We have the decisions of the inter- American
Presidents about this hemisphere m which we
will be much hivolved, and the Alliance for
Progress, the decision to move toward a common

market. „ , , . , • ,

So that these are just some of the high points
m a very busy agenda for 1968. And we can
hope, as we b^gin the new year, that somehow
we can move closer toward a stable and reliable
peace in the world.

I am ready for your questions.

Talks With Cambodian Government

Q. Mr. Secretary, will Ambassador [Chester']
Bowles he making any contacts with the North
Vietnamese or the Viet Cong in connection loith
Mr. TrinK's statement?

A. We don't expect him to.

As you know, Ambassador Bowles is gomg
to Phnom Penh in a few days to talk with
Prince Sihanouk and members of his Govern-
ment about the problem of maintaining the m-
dependence and territorial integrity and neu-
trality of Cambodia.

Prince Sihanouk, rightly, is deeply concerned
about not being engaged in the situation of
violence across his borders. We strongly support
him in that desire. We have no desire whatever
to see Cambodia involved in the conflict m Viet-

Nam, in Laos. ■ i ■ j.

We would hope very much that his desire to
strengthen the ICC [International Control
Commission] in order to give better assurance
to Cambodia that its neutrality will be respected
can in fact meet response from all sides.

We hope that those involved with the ICC
will agree to do so, and we hope that the North
Vietnamese, the Viet Cong forces who have vio-
lated Cambodian neutrality, will realize that
this is beyond the rules and that they should

stay out of Cambodia and not involve that

country in the present conflict.
We will be doing our best on that, and we

have been glad to see that Prince Sihanouk is

willincr to discuss these matters seriously with
us. He can be assured of our fullest cooperation
in mamtaining the peace and neutrality ot
Cambodia.

Q Mr. Secretary, in view of the Prime's un-
expected swing-about in his recent statement,
have you any feeling on who he thinks is win-
ning in South Viet-Nam at the mo7nent?

A No. I wouldn't want to speculate on that
point. I think that his principal preoccupation
is Cambodia. I think he wants to keep Cam-
bodia out of this struggle, and we are ready to
cooperate with him fully on our side and we
hope that others would do the same. But I would
not want to try to speculate about what might
be m his mind on other questions.

North Vietnamese Statement Needs Clarifying

Q. Mr. Secretary, you point out tJiat one part
of Trinh's statement is the question of what he
said, and one is what he meant. I assurne that
you are not going to tell us what you think he
meant, hut with regard to what he said, do you
consider that formulation of their position to be
a more flexible on.e than you have heard from
them before?

A Well, I think that the use of the word
"will" instead of "could" or "would" seems to
be a new formulation of that particular point,
but that leaves a great many questions still open.
And we need to clarify what else goes along
with it and what that word in fact means.

Q. Mr. Secretary, in this connection, do you
have the impression, sir, as a result of this
Tnnh statement that in fact the negotiating^
positions of both sides, Washington ami Hanoi
in this case, are becoming someiohat closer and-
that this means that negotiations are closerf

A. I wouldn't want to make that iudgment
now because we need to explore fully what is
behind this statement, what it means m its con-
text how it relates to President Johnson's state-
ment at San Antonio, and how it relates to their
intentions on the ground.

0 Mr. Secretary, the Trinh statement refers
again to the willingness under those circum-
stances to discuss what he calls ^'relevant ques-
tions:' From your standpoint, what would be
the relevant questions to discuss with North
Viet-Nam?
A. Well, I think I would prefer not to spell

118

DEPARTMENT OF STATE BULLETIN

that out in any detail, because one of the
things that we want to know is what they con-
sider relevant questions to be.

If it has solely to do with what is happening
in Xortli Viet-Xam, that is one thing. If it has
to do with makmg peace in Southeast Asia, that
is something else.

But these are matters that need clarification
and this is not the way to clarify them, by
making public statements.

Q. Do you mean by that if it has only to do
with matters in North Viet-Nam, that is not
sufficient?

A. I don't mean anything myself yet. I am
trying to find out what they mean. I am just
pointing that out as an example of a jwint that
needs clarification.

Q. How do you get out of the Gaston-
Alphonse act?

A. Well, that is more a problem for public
speculation and for the reporters than it is for
us who are in the business. We have ways and
means of clarifying these things.

Q. Mr. Secretary, has the United States yet
begun its explorations to clarify these questions,
or does that await further consultation with
Allied nations?

A. Well, I am a little hesitant to comment on
that. I tliink that you can assume that if you
were in my position you would try to clarify
these matters without delay.

But I have noticed already that about six dif-
ferent capitals have been involved in specula-
tion in this matter. I expect at least six addi-
tional capitals to be involved in speculation be-
fore your colleagues overseas get through with
it. I would not object to that. I think that if
you're not careful, you will hurt someone's feel-
ings if you don't include them in this party.
[Laughter.]

But nevertheless, we will have our means to
clarify these matters, and I'd like to preserve
those means by not discussing them here.

Q. Well, just to folloio up an that, sir, it
wa'iu't entirely clear to me from your earlier re-
sponse whether or not you do foreclose the pos-
sibility tJiat the explorations that Amia'^sador
Boivles will be conducting in Phnom Penh may
or may not interweave in the discussions about
Minister Trinh.

Ambassador Bowles Designated
for Mission to Cambodia

White House Announcement, January If

White House press release (San Antonio, Tex.) dated
January 4

The United States Government is sending a
representative to Cambodia in response to tlie in-
dication given by His Highness Prince Norodom
Sihanouk. Chief of State of Cambodia, that he
would agree to receive an emissary of President
Johnson. Ambassador Chester Bowles [U.S. Am-
bassador to India] has been selected for this mis-
sion, and the Governments of Cambodia and the
United States are in agreement that Mr. Bowles
should arrive in Phnom Penh within the next
few day.s.

you gentlemen raised it today. The arrange-
ments were made for him to go to Plmom Penh
to talk to Prince Sihanouk. He has no other
appointments, and we have no indication that
anyone else is asking to see him. So, if I were
you, I'd concentrate on the Cambodian problem
as far as xlmbassador Bowles is concerned.

Question of Cambodian Frontiers

Q. Mr. Secretary, do you thinJc there is a
possibility of getting another Geneva conference
or some kind of an internationalization of the
question of Cambodian frontiers?

A. We have been ready for years to go to a
conference on Cambodia, and to take the steps
that are necessary to assure the territorial in-
tegrity and the neutrality of Cambodia. We
have been disappointed that even that limited
step has been denied the Geneva machinery thus
far.

We would hope that if a conference is not
possible, the ICC itself, within the existing ar-
rangements, could take action that would be of
assistance in this field.

Yes, we are ready for a Geneva conference
oil Cambodia, on Laos, on South Viet-Nam,
North Viet-Nam, on any part of the Southeast
Asian jiroblem or all of it. And that has been
our position for a long time, as you know.

Q. Mr. Secretary, my question was: do you
have any more optimism at the present that
such a conference is possible?

A. The question hadn't even come up until A. No, I think the question of the particular

JANUARY 22, 1908

119

maclimery is still open. Our view is that the
existing machinery on tlic ground is able to deal
with this problem more effectively if the mem-
ber governments are prepared to act in that di-
rection and if Prince Sihanouk is prepared for
it to happen in his country, as he seems to be.

Now, the three members of the ICC are India,
Canada, and Poland. If all three of them took a
fully cooperative attitude on this matter, we
thiiik they could accomplish a good deal ; and we
think some of them will take a very cooperative
attitude. But Prince Sihanouk indicated that he
did not have the impression that there was full
cooperation from Poland on this particular
point.

Q. Mr. Secretary, Prince SihanottJc's public
message indicated that the door was open for
hot pursuit into his territory providing it came
under certain circximMances. What is the U.S.
reaction to that?

A. Well, I think that should be treated as a
hypothetical question at the present time.

Wliat we want to do is to eliminate that ques-
tion by eliminating the conditions that even
bring up the question. If the Cambodian Gov-
ernment with the assistance of the ICC can
assure its own neutrality and its own territorial
integrity, then the question you refer to does not
arise.

Now, that, we much prefer. And it is not our
desire to involve other countries or other areas
in this struggle. It is not our desire in any sense
of the word. So we are concentrating at the
present time on the question of removing the
causes of the problem, rather than trying to find
an answer to that particular question.

Q. Mr. Secretary, do you have the —

A. Yes, sir.

Q. This is something that is totally with-
in the purview of your Department, and I think
that we can get some clarification. For about
3 years now your Department has been in-
volved in an investigation involving illegal
wiretapping and eavesdropping, and I would
like to find out now if you could tell us who was
responsible for the illegal wiretapping and
eavesdropping initially, and also, who had cus-
tody of the recordings on that illegal wiretap-
ping, and who authorized the destruction of the
recordings, which were rather important evi-
dence.

A. Well, I am not familiar with the details of
your question.

Q. This is the Otepha case it came off of.

A. Well, it is one of the questions that I feel
more suitable to the House of Conuuons, m
which I need notice. Because, quite frankly, I
don't have the answer in my head at the jjres-
ent.

Q. Well, it happened 3 years ago, Mr. Sec-
retary, and you said at that time it was under
study, and I thought now after 3 years it was
about time enough to make the determination.

A. Well, since you related this to the Otepka
case, I would have to say that since that matter
is now under appeal I am not going to get into
it in any way.

Q. Well, Mr. Secretary, this is unrelated to
the Otepka case itself. This matter deals with
the handling of personnel matters within your
Department. Do you condone or approve illegal
wiretapping and eavesdropping? That is the
point.

A. I don't condone anythmg that is illegal,
I assure you.

Q. Do you condone these specific acts, and
have you, done anything about the people in-
volved?

A. I don't know what specific acts you are
talking about. If you are talking about some-
thing 3 years ago and you are talking about
something mvolved in the Otepka case, I am
not going to comment on it.

Q. A complete secrecy curtain then. Is that it?

A. No. I am just not going to comment on a
case that is pending on appeal before the Civil
Service Commission.

Tourism and the Balance of Payments

Q. On balance of payments, sir, you were talk-
ing about persuading fewer Americans to travel
and to get more foreigners to travel. Two ques-
tions : Do you think that you can persuade more
foreigners to come here lohen fewer Americans
are going overseas? And, second, isnH this an
extremely dangerous principle to try and bal-
ance the amount of tourists going in and out
of the United States — which is a principle
lohich, if applied to the rest of American for-
eign trade, would take us straight back to pre-
Cordell Hull isolationism, wouldnH it?

A. I think during 1967 an unusual number of
Americans made decisions to go abroad. We

120

DEPAHTMBNT OF STATE BULLETIN

would like to see, in 1908, those decisions cut
back to something more near normal in these
more recent years; and if so, that would achieve
the targets that we are talking about.

No, we don't particularly like the necessity
of asking American citizens to defer foreign
travel. There is a good deal of foreign travel
that is essential, and of course that will be
taken fully into account in anything that is
done in this field.

But we are faced with the fact that there are
some things that we can't afford in the imme-
diate future. One of them is the rate of mvest-
ment, private investments, one of them is the
level of the extension of bank credit. Another
is the amomit of tourism. We have got to make
adjustments at a number of points here if we
are to meet our balance-of-payments objectives.

Q. Mr. Secretary, will you encourage /Senator
[J. TF.] Fulhright to go ahead with his jwo-
jccted investigation of the Tonkin Gulf inci-
dent; and if so, why?

A. Oh, I have no objection to his inquiring
into that. I have no doubt about what the
answers will be. But I have no objection to it.

Q. Mr. Secretary?

A. Yes, sir.

U.S. Position on Viet-Nam Cease-Fire

Q. Mr. Sec?'ctaj-y, over the years we have had
a variety of statejnents from yourself, the Pres-
ident, Mr. Goldherg [Arthur J. Goldberg, U.S.
Representative to the United Nations'], and
others about the conditions under which we
might stop the bombing of North Viet-Nam,
xchich has always left m.e a little confused about
your position, as well as Hanoi's. Noio, today,
you have referred to the Presidenfs San An-
j tonio speech, in which he wants productive talks
and assumes that the enemy loill not take ad-
vantage of the cease-fire. This would seem to
imply that the United States is requiring a com-
plete cessation of the enemy military activity
if ice stop the bombing. Is this correct? And,
if it is not correct, would you straighten me out?

A. "Well, I have to go back to a point that I
made frequently before; and that is that when
you get into detailed interpretations of language
that affects war and peace you need to clarify
those and touch with those that can stop the
shooting. That is, make those a matter of dis-
cussion with representatives of the other side,

or intermediaries. It would not be, I think, ap-
propriate for me to try to spell out what that
assumption means. I have no doubt at all that
Hanoi understands a good deal about what that
assumption means. And we would be interested,
if they are interested, in discussing what it
means.

But these are matters that are for discussion
and negotiation, matters on which we are in
touch with our allies. It is not something which
can be, I think, usefully spelled out by one side
in the absence of effective contact and discus-
sion with the other side engaged in the conflict.

Q. Mr. Secretary, in connection with the
Eshkol [Levi Eshkol, Prime Minister of Israel]
visit and in vieio of the Soviet arms shipment to
the Arabs, do you think it is justified to ask for
a request for Ainerican arins to Israel and are
you tvilling to give them?

A. Well, I would not want to give an answer
to that question today. Prime Minister Eshkol
is to be here on a visit. I think the general situa-
tion in the Middle East will be discussed, in-
cluding the security situation and the possi-
bilities of moving toward a peaceful settlement
there. I would not want to anticipate a question
of that sort just at this stage.

Q. Mr. Secretary, frmn our point of view,
would we be willing — as we did in Korea — to
talk as loe fght? In other words, can you con-
ceive of the possibility of truce talks while the
fighting continues?

A. I would have to simply take you back to
the President's San Antonio formula on that
question.

Q. Mr. Secretary, in relation to this current
diplomatic exploration, is it your impression
that Moscoio and Peiping are now prepared to
use their influence to bring this tear to a nego-
tiated end?

A. No, we have no impressions of their atti-
tude at this point. We may get some more firm
information on that. It is my impression that
Moscow has simply repeated the statement as it
was made in Hanoi. I haven't myself noticed
anything that Peiping has said about it. I
wouldn't want to speculate on what either one
of those steps might have meant.

Q. Mr. Secretary?

Q. Mr. Secretary, in connection with both the
President'' s San A ntonio statement and Foreign
Minister Trinh's statement, are we not com-

JANTJART 22, 1968

121

mitted to test Hanoi's intentions hy stopping the
homhing and seeing whether or not there would
he talks promptly and productively?

A. Well, let's find out what they mean. Let's
find out what this statement means, as well as
what it says. And then we will consider that in
relation to the President's San Antonio state-
ment and then see whether any conclusion can be
drawn from it.

Q. Are you satisfied with verhal assurances
from them that they intenxled to go into prompt
and productive discussion?

A. Tliis is not the place for me to answer that
question.

Q. Mr. Secretary?

A. Yes, sir?

Q. Why has the Department failed to ash for
prosecution for perjury of the three people who
were involved in giving misleading and false
testimony under oath on this illegal wiretap-
ping?

A. I believe that is a matter for the

Q. And each of the things / have spoken of
there are well thought out and if you want to go
into any of the terms of illegality and so forth,
I would be delighted to discu^ss those with you.
Why haven'' t you taken action in 4 years?

A. I think this is a decision for the Depart-
ment of Justice, based on the record.

Q. Well, it has not been sent to the Depart-
ment of Justice, and they were informed, the
Assistant Attorney General in charge of the
Criminal Division in the last week or two has
informed a Member of Congress that it has not
been referred to the Department of Justice.

A. Well, this is not my recollection of it 4
years ago. But nevertheless

Q. Do you intend to do something about that,
or let the statute of limitations run out, which
I understand is a 5-year statute?

A. I will have to take that under advisement.
I don't know.

Q. Will we get an amioer on this later or not?

A. I don't know whether you will or not.

Q. Can you evaluate for us the

Q. The Jordanian Government has had before
this Government for some time a request for re-
placement parts for airplanes and arms lost in

the June war. The Department says if a under
study. Is it still under study, sir, and can you
talk about the reasons for that?

A. It's still under study, yes.

Efforts Toward Peace in Middle East

Q. Can you evaluate for us the role of the
Soviet Union in the Middle East today?

A. The question was evaluating the role of
the Soviet Union in the Middle East today.

Q. Mr. Secretary

A. I'm not going to say very much about
that. You gentlemen asked me a good many
questions today about the future and about the
evaluations that I should not get into. We hope
that they will give their full support to the
Security Council's resolution of late November.
We believe that their own interests would lead
them to want peace in the Middle East, as our
interests would lead us to want peace in the
Middle East.

We know that there are some differences
about the order in which one proceeds from one
question to the next. As yoti know, they have
felt in the past that f\ill withdrawal by Israeli
forces to the pre-.Tune 5 position was a prerequi-
site for action on other questions.

The Security Council resolution found, I
think, a better and more comprehensive answer
to that question, and they voted for that resolu-
tion.

We would hope that they would work with-
in the framework of the Security Council and
in support of Ambassador Jarring to help find
the basis for a permanent settlement there. And
I think that there is some possibility that their
influence can be in the direction of moderation.

We also would hope that they would become
more interested in finding some means of lim-
iting the arms race in that area. Because none
of these countries can feel secure unless there
is some sense of limit on the arms or the build-
up in one or another coimtry. And on that they
can make a very substantial contribution.

But the real answer to your question is we
will just have to see as we move in the weeks
ahead to support Ambassador Jai-ring's efforts.

Q. Mr. Secretary, are

Q. Mr. Secretary, there were a number of
stories in recent weeks about consideration be-
ing given within the administration to the pol-

122

DEPARTMENT OF STATE BULLETIN

icy of hot pursuit across the Cambodian bor-
der. I xconder, in the context of those reports
that are before us, if you would comment on
how well founded they were and whether there
is some hind of feeling of urgency — or time lim-
itation on the discussion with the Cainhodians
and the ICC on this matter?

A. No. I indicated earlier that our major
objective in this situation is to find a way to
remove the presence of Nortli Vietnamese and
Viet Cong elements on Cambodian territory and
therefore eliminate the problem, rather than to
have to pose and face that question.

"We think this is also Prince Sihanouk's great
concern — it is to remove the problem, rather
than trying to find one or another kind of
answer to it, in the event the North Vietnamese
and Viet Cong forces remain on Cambodian
territory. So this will be our principal preoccu-
pation.

There was a question ?

Q. Yes, sir. I wonder if you feel that Ho Chi
Minh is making peace feelers?

A. I don't know yet. I don't know yet.

Q. Mr. Secretary

A. Yes, sir?

Q. A number of administration officials have
said that toe have been making significant prog-
ress militarily in Viet-Nam but none has, as far
as I know, suggested that North Yiet-Nam is in
dire straits or near collapse. I v)ondered tohether
there is any feeling here that Hanoi anight be
trying to set up the President for a ivorldioide
propaganda attack on his credibility as a seeker
of peace in this latest business?

A. That's always a possibility, but I wouldn't
want to make a judgment on that until we have
explored more fully just what is behind this
statement and what it means. I think it would
be premature for me to brush this aside as
purely a propaganda play.

Now, one has to be careful and watchful about
these things if it does represent a movement.
And we are interested in movements toward a
peaceful settlement. If it is not that, then we
will have to face that and draw the consequences
from it. But I wouldn't want to characterize
this statement today as either a peace feeler, as
indicated by tlie earlier question, or as purely a
propaganda move.

Q. Mr. Secretary

Q. Mr. Secretary, returning to Laos

A. Yes?

Q. How do you read the recent enemy attacks
in Laos? Is this an annual dry-season search for
food, or does it indicate some more aggressive-
ness on the part of North Vietnamese troops?

North Vietnamese Attacks in Laos

A. Some of it seems to be seasonal in charac-
ter. Our friends in Laos feel that it is somewhat
more than seasonal. We have been watching it
very carefully and trying to keep up with it. We
have noticed continued movements through
Laos and the use of the Ho Chi Minh Trail, and
operations seem to be associated with that.

There have been additional operations against
elements loyal to the govermnent that are in
scattered positions up in the northeast. And
we have seen some increase in traffic, truck traf-
fic, from North Viet-Nam over in that direc-
tion. There, again, is a point where a desire
for peace could be registered very quickly.

Those who look upon Ho Chi Minh simply
as a nationalist have difficulty in explaining
why he is causing so much trouble in Laos,
which is not Vietnamese at all or, indeed, caus-
ing so much trouble in Thailand. We would be
very glad to see the Geneva machinery moved
promptly to bring about a 1,000-percent com-
pliance with the Laos accords of 1962 by all
parties. And that would be a giant step to-
ward peace in Southeast Asia.

So we feel the Laotians have a claim upon
all of us for full compliance with those agree-
ments. They are recent. They were based upon
coalition arrangements inside Laos, the neutral-
ization of Laos; and these agreements were
signed by all the parties now engaged in this
affair. So we would be very much impressed if
all the signatories to the Laos accord would
move to let these Laotian people at least take
care of their own affairs, without being inter-
fered with from the outside, and would give it
our maximum cooperation.

Q. Mr. Secretary, is it possible

Q. Mr. Secretary, in Europe, the balance-of-
payments situation, do you expect a fresh round
of talks witli the West German Government and
others on this problem?

A. Well, we will be talking to the Federal
Republic of Germany and others about the prob-

JANUART 22, 1968

123

lem of neutralizing the foreign exchange costs
of American troops stationed abroad. I must say
that we have been very appreciative and much
encouraged by the initial responses which we
have had from other governments about the
President's balance-of -payments program.

Mr. [Nicholas deB.] Katzenbach is in Europe.
Mr. Eugene Rostow is in Asia. And we have had
very good first talks with governments in de-
tail about the program and have been very much
encouraged by the attitude that they have taken.
I think they understand that they themselves
have a considerable interest in this issue, partly
because of the importance to them of the Ameri-
can economy; partly because of their common
interest in the dollar as a vehicle of interna-
tional exchange ; and partly because of a neces-
sity for close cooperation among those of us
whose futures are interlinked to the extent that
they are between us and our friends in Western
Eui'ope.

Q. Mr. Secretary, thank you very much.

A. You're much obliged.

U.S. Releases Note to Cambodia
on Violations of Its Territory

Press release 306 dated December 27

Following is the text of the U.S. Government
note to the Royal Camhodian Government
trammitted ly tlie Emhassy of Australia at
Phnom Penh on December If..

The United States has regretted the impair-
ment of its relations with Cambodia. Despite
differences, however, the United States con-
tinues to respect the neutrality, sovereignty, in-
dependence and territorial integrity of Cam-
bodia.

A particularly distressing problem dividing
the United States and Cambodia arises out of
incidents in the Cambodia-South Viet-Nam
border area. The United States wishes to em-
phasize that American forces operating in
South Viet-Nam are engaged in conflict with
"Viet Cong-North Vietnamese forces committing
aggression against South Viet-Nam. The Amer-
ican forces have no hostile intentions toward
Cambodia or Cambodian territory. The root
cause of incidents affecting Cambodian territory

is the Viet Cong and North Vietnamese presence
in the frontier region, and their use of Cam-
bodian territory in violation of the neutrality of
Cambodia.

The United States has offered to cooperate in
seeking a solution to this problem. Following
the suggestion of His Eoyal Highness Prince
Sihanouk for more effective action by the Inter-
national Control Commission, made most nota-
bly in December of 1965, the United States has
consistently supported such action and has in-
dicated its willingness to consider sjanpathet-
ically any request for specific assistance to this
end.

At the time, the Royal Cambodian Govern-
ment suggested that the International Control
Commission might undertake continuing and
effective review of activities in the Port of
Sihanoukville, and it was further suggested that
the Commission might be expanded so that it
could more effectively monitor the border areas
between Cambodia and South Viet-Nam.

In addition, the United Stat-es has supported
an International Conference on Cambodia, and
it has also suggested direct, informal talks with
Cambodian officials in order to seek an alterna-
tive remedy.

The United States is deeply concerned over
the critical issue of Viet Cong-North Viet-
namese use of Cambodian territory and it wishes
to emphasize once more its willingness to co-
operate on any reasonable method of control-
ling this problem.

The Eoyal Cambodian Government may not
be aware of the extent of Viet Cong-North
Vietnamese use of its territory, and the United
States therefore wishes to provide it with the
attached summary ^ of some of the evidence
available. The documents and interrogations
from which this evidence has been compiled are
fully available if desired. Additional evidence
received in more recent periods is being assessed,
and may be presented to the Koyal Cambodian
Government at a later time.

The United States believes that the Royal
Cambodian Government will share its concern
over Viet Cong-North Vietnamese use of neu-
tral Cambodian territory. It is in the spirit of
assisting the Royal Cambodian Government in
its efforts to prevent violations of its neutral
territory that this evidence is presented.

' The summary was not made public.

124

DEPARTMENT OP STATE BULLETIN

INTERNATIONAL ORGANIZATIONS
AND CONFERENCES

U.N. Establishes Ad Hoc Committee
To Study Use of Ocean Floor

Following is a statement made in the U.N.
General Assembly hy U.S. Representative
Arthur J. Goldberg on December IS, together
with the text of a resolution adopted by the
Assembly that day.

STATEMENT BY AMBASSADOR GOLDBERG

D.S./U.X. press release 250 dated December IS

Mr. President, the resolution before us marks
the first major step by the United Nations in a
reahn of great significance to all members of
this organization. I would like to take this op-
portunity to reemphasize the jiosition of my
country on this very unportant matter.^

First, we believe that the prospects of rich
harvest and mineral wealth both in the deep
oceans and on the deep ocean floors must not be
allowed to create a new form of competition
among marine nations.

Second, my nation believes that the nations of
the world should take steps to assure that there
will be no race among nations to grab and hold
the lands under the high seas. The deep ocean
floor should not be allowed to become a stage
for competing claims of national sovereignty.

Third, we must insure that the oceans and the
deep ocean bottoms remain, as they are, the
legacy of all human beings and that the deep
ocean floor will be open to exploration and use
by all states, without discrimination.

Fourth, my nation stands ready to join with
all other nations to achieve these objectives in
peace and under law.

My country supports the resolution to estab-
lish an ad hoc committee as a first step in this
direction.

We believe that the study which the commit-

' For a statement by Ambassador Goldberg made in
Committee I on Nov. 8, see Bulletin- of Nov. 27, 19(57,
p. 723.

tee is asked to prepare will constitute a most
useful basis for future decisions of the General
Assembly. We particularly hope that the 23d
General Assembly, as the result of the work of
this ad hoc committee, will be in a position to
establish a Committee on the Oceans with a
broad mandate to develop law and to promote
international cooperation with respect to the
ocean and ocean floor.

There is no question that there are many
complex and difficult problems — political, legal,
scientific, and economic — which are involved in
this matter. But I want to make it clear to the
General Assembly that I believe the members
of the United Nations, working together, can
overcome these problems, just as they have over-
come equally complex problems in sunilar areas
in the past.

"Wlien we made our first proposal for an Outer
Space Committee in 1958, there were also many
complexities involved. But we now have an im-
portant treaty in this area, the Outer Space
Treaty, which is the result of the work of the
Outer Space Committee. And we now have be-
fore us the report of this committee recommend-
ing a second important agreement to this
Assembly for approval : the Agreement on As-
sistance to and Return of Astronauts and Space
Vehicles. This agreement is another major ac-
complishment and a testimonial to what the
members of the United Nations can achieve,
working together, on even the most difficult
problems.

In reviewing the debate leading to the draft
resolution callmg for an ad hoc committee to
study matters relating to the seabed and ocean
floor, I should like to note several points which
emerged from the extensive discussions of the
matter in the First Committee.

There is a common appreciation of the com-
plexity of this question and of the importance
of the General Assembly proceeding with care
in addressing the scientific, technical, legal, eco-
nomic, and anns control issues involved. There
is also a general appreciation of the importance
of advancing international cooperation in the
exploration and use of the ocean and ocean floor.
These realizations should permit us to move
ahead, carefully but with all deliberate speed —
just as we moved ahead carefully but surely in
our consideration of outer space.

Finally, because it marks the first step by the
General Assembly in a highly complex field and
because the question of the future regime of the

JANUARY 22, 19G8

125

ocean floor is a matter of great concern to all
nations, we believe it is generally agreed that
the principle of consensus be established from
the outset. I am sure all members will recall
that this was the procedure followed by the
Outer Space Committee — and that this proce-
dure has not precluded steady progi-ess, impor-
tant agreements, and beneficial results.

In mentioning the achievements of the Outer
Space Committee, I would not wish to imply
that the problems and opportunities of the
oceans and of outer space are perfectly analo-
gous. Obviously they are not. The oceans are
close at hand ; outer space extends beyond us to
infinity. Man has traveled and fished on the
surface of the oceans since the earliest days of
history; outer space, until recently, has re-
mained totally unexplored. And the oceans,
which are already being used commercially by
man, with rich prospects of food and mineral
wealth awaiting further exploration and devel-
opment, are far more valuable economically
than outer space.

Yet both outer space and the sea, through
science and technology, promise much to man-
kind; and both require, for the fulfillment of
that promise, that we the nations of this world,
through this organization, address ourselves to
our tasks in cooperation and not in conflict.

For this reason my delegation strongly sup-
ports the resolution to establish this ad hoc
committee, as the first major step by the United
Nations, a step of historical importance, to help
mankind develop and make full use of the great
benefits which lie in and imder the great oceans
of the earth.

In closing, my delegation would like to pay
tribute to the Government of Malta and to its
distinguislied representative, whose initiative
brought this important matter to the attention
of the Assembly.

TEXT OF RESOLUTION 2

The General Assemhly,

Having considered the item entitled "Examination
of the question of the reservation exclusively for peace-
ful purposes of the sea-bed and the ocean floor, and
the subsoil thereof, underlying the high seas beyond
the limits of present national jurisdiction, and the uses
of their resources in the interests of mankind".

Noting that developing technology is making the sea-
bed and the ocean floor, and the subsoil thereof, accessi-
ble and exploitable for scientific, economic, military
and other purposes,

Recognizing the common interest of mankind in the

sea-bed and the ocean floor, which constitute the major
portion of the area of this planet.

Recognizing further that the exploration and use of
the sea-bed and the ocean floor, and the subsoil thereof,
as contemplated in the title of the item, should be con-
ducted in accordance with the principles and purposes
of the Charter of the United Nations, in the interest of
maintaining international peace and security and for
the benefit of all mankind.

Mindful of the provisions and practice of the law of
the sea relating to this question,

Mindful also of the Importance of preserving the
sea-bed and the ocean floor, and the subsoil thereof,
as contemplated in the title of the item, from actions
and uses which might be detrimental to the common
interests of mankind,

Desiring to foster greater international co-operation
and co-ordination in the further peaceful exploration
and use of the sea-bed and the ocean floor, and the sub-
soil thereof, as contemplated in the title of the item.

Recalling the past and continuing valuable work on
questions relating to this matter carried out by the
competent organs of the United Nations, the specialized
agencies, the International Atomic Energy Agency and
other Intergovernmental organizations.

Recalling further that surveys are being prepared
by the Secretary-General in response to General Assem-
bly resolution 2172 (XXI) of 6 December 1966 and
Economic and Social Council resolution 1112 (XL) of
7 March 1966,

1. Decides to establish an Ad Hoc Committee to study
the peaceful uses of the sea-bed and the ocean floor
beyond the limits of national jurisdiction, composed of
Argentina, Australia, Austria, Belgium, Brazil, Bul-
garia, Canada, Ceylon, Chile, Czechoslovakia, Ecuador,
El Salvador, France, Iceland, India, Italy, Japan,
Kenya, Liberia, Libya, Malta, Norway, Pakistan, Peru,
Poland, Eomania, Senegal, Somalia, Thailand, the
Union of Soviet Socialist Republics, the United Arab
Republic, the United Kingdom of Great Britain and
Northern Ireland, the United Republic of Tanzania, the
United States of America and Yugoslavia, to study
the scope and various aspects of this item ;

2. Requests the Ad Hoc Committee, in co-operation
with the Secretary-General, to prepare, for considera-
tion by the General Assembly at its twenty-third ses-
sion, a study which would include :

(a) A survey of the past and present activities of
the United Nations, the specialized agencies, the Inter-
national Atomic Energy Agency and other intergov-
ernmental bodies with regard to the sea-bed and the
ocean floor, and of existing international agreements
concerning the.se areas ;

(6) An account of the scientific, technical, economic,
legal and other aspects of this item ;

(c) An indication regarding practical means to pro-
mote international co-operation in the exploration, con-
servation and use of the sea-bed and the ocean floor,
and the subsoil thereof, as contemplated in the title of
the item, and of their resources, having regard to the
views expressed and the suggestions put forward by
Member States during the consideration of this item
at the twenty-second session of the General Assembly ;

'U.N. doc. A/RES/2340 (XXII); adopted by the
Assembly on Dec. 18 by a vote of 99 (U.S.) to 0.

126

DEPARTMENT OF STATE BULLETIN

3. Requests the Secretary-General :

(a) To transmit the text of the prosent resolution
to the GovtTuments of all Moinber States in order to
seelv thoir views on the subject ;

(&) To transmit to the Ad Hoc Committee the rec-
ords of the First Committee relating to the discussion
of this item ;

(c) To render all appropriate assistance to the Ad
Hoc Committee, including the submission thereto of
the results of the studies being undertaken in pursu-
ance of General Assembly resolution 2172 (XXI) and
Economic and Social Council resolution 1112 (XL),
and such documentation pertinent to this item as may
be provided by the United Nations Educational, Scien-
tific and Cultural Organization and its Inter-govern-
mental Oceauographie Commission, the Inter-Govern-
mental Maritime Consultative Organization, the Food
and Agriculture Organization of the United Nations,
the World Meteorological Organization, the World
Health Organization, the International Atomic Energy
Agency and other intergovernmental bodies ;

4. Invites the specialized agencies, the International
Atomic Energy Agency and other intergovernmental
bodies to co-operate fully with the Ad Hoc Committee
in the implementation of the present resolution.

The convention of April 16, 1945, for the
avoidance of double taxation and the preven-
tion of fiscal evasion with respect to taxes on
income, as modified by the 1946, 1954, and 1957
supplementary protocols, was extended in its
application to Cyprus as of January 1, 1959,
pursuant to the procedure prescribed in article
XXII of that convention. The convention as
modified continued in force between the United
States and Cyprus on and after August 16, 1960,
the date on which Cyprus became an independ-
ent nation. The notice of termination given by
the Government of Cyprus is in accordance with
the provisions of article XXIV of the
convention.

Current Actions

MULTILATERAL

TREATY INFORMATION

U.S.-Cyprus Income Tax
Convention Terminated

Press release 299 dated December 20

As a result of a notice given by the Govern-
ment of Cyprus to the Government of the United
States on June 6, 1967, the income tax convention
of April 16, 1945, between the United States and
the United Kingdom, as modified by supple-
mentary protocols of June 6, 1946, May 25, 1954,
and August 19, 1957,^ will cease to be in force
between tlie United States and Cyprus as
follows :

(a) as respects United States tax, for the tax-
able years beginning on or after January 1,
1968;

(b) as respects Cyprus income tax, for any
year of assessment beginning on or after Jan-
uary 1, 1968.

^ Treaties and Other International Acts Series 1546,
3165, and 4124.

Cereals

Agreement relating to cereals, with annex and sched-
ule. Done at London June 30, 19G7.'
Signatures: Argentina, Australia (ad referendum),
Canada, United Kingdom, United States.

Safety at Sea

International convention for the safety of life at sea,
li>GO. Done at London June 17, 1960. Entered into
force May 26, 196.5. TIAS 5780.
Acceptances deposited: Mauritania, December 4,
1967 ; South Africa, December 13, 1967.

Satellite Communications System

Agreement establishing interim arrangements for a

global commercial communications satellite system.

Done at Washington August 20, 1964. Entered into

force August 20, 1964. TIAS 5646.

Accession deposited: Uganda, January 5, 1968.
Special agreement. Done at Washington August 20,

1964. Entered into force August 20, 1964. TIAS

5646.

Signature: East African External Telecommunica-
tions Co., Ltd., for Uganda, January 5, 1968.

Trade

Protocol amending the General Agreement on Tariffs
and Trade to introduce a part IV on trade and de-
velopment, and to amend Annex I. Done at Geneva
February 8, 1965. Entered into force June 27, 1966.
TIAS 6139.

Acceptances: Dominican Republic, November 28,
1967 ; Malaysia, November 20, 1967.

Protocol for the accession of Switzerland to the Gen-
eral Agreement on Tariffs and Trade. Done at Ge-
neva April 1, 1966. Entered into force August 1,
1966. TIAS 6065.
Acceptance: Malawi, November 24, 1967.

' Not in force.

JANTJAET 22, 1968

127

Protocol for the accession of Tugoslayia to the Gen-
eral Agreement on Tarifts and Trade. Done at Ge-
neva JuT/^O 1966. Entered into force August 25,

1966. TIAS 6185. v. „ i^ iqfi7- India,

Acceptances: Denmark, November l-*' f |7 \^^^''''
November 7, 1967; Malawi, November 24, 1J*>'-
SecondTocL-verbal extending ^^^^^f^^^ZTl^^^^
provisional accession of t^ie Umtea Ardu ^ i

January 18, 1967. TIAS 6225.
Acceptance: Malawi, November 24 1967
Protocol for the accession of Korea to tlie •jenerai
Agreement on Tariffs and Trade. D^n^at Geneva
March 2, 1967. Entered into force April 14, 1967.

lltcp^aUcs: Denmark, November 14, 1967; Malawi,

Prot^crt^the'a^cJssion of Argentina to the Gen-
eral Agreement on Tariffs and Trade. Done at Ge-
neva June 30, 1967. Entered into force October 11,

Acceptances: Denmark, November 14, WSJ ! Malawi,

November 24, 1967 ; Netherlands October 27, 1967 ,

United Kingdom, October 25, 1967.

Protocol for the accession of Iceland to the General

igreement on Tariffs and Trade^ Done at Geneva

Tune 30 1967. Entered into force November 15, 1967.

Tceptunces: Denmark. November 14, 196J; Malawi,

November 24, 1967 ; Netherlands, October 27, 1967.

Protocolfor the accession of Ireland to the General

"^ Agreement on TarifCs and Jrade^Done at Geneva

June 30, 1967. Entered into force »/,t'7„^/„'-. f' J^^^^'

Acceptances: Denmark, November 14, 19f3 ' J"^™,

November 22, 1967 ; Malawi, November 24, 1967 ,

Netherlands, October 27, 1967.

BILATERAL

Argentina

Agreement amending the agreement of August 3 and 8,
iQfifi (TIAS 6086), relating to the status of the trade
Sreement^f October 14, 1941 (56 Stat. 1685), and
jSyT*! 1963 (TIAS 5402). Effected by exchange of

notes at Buenos Aires December 18 and 27, 1967. En-
tered into force December 27, 1967.

Canada

SuDDlementary convention further modifying and sup-
plemSg the convention and accompanying pro-
tocS of March 4, 1942, for the avoidance of double
taxation and the prevention of fiscal evasion m the
case of income taxes, as modified by supplementary
conventions of June 12, 1950, and August 8 19ob (56
Stat 1399, TIAS 2347, 3916). Signed at Washington
October 25, 1966. Entered into force December 20,

^Proclaimed by the President: December 27, 1967.

China

A-reement for sales of agricultural commodities un-
^"derTme I of the Agricultural Trade Development
and Assistance Act of 1954, as amended (68 Stat.
^54 as amended; 7 U.S.C. 1691-1736D), with annex
fnd related agreement. Signed at Taipei December
12, 1967. Entered into force December 12, 1967.

Grenada

Agreement relating to the establishment of a Pfce
Corps program in Grenada. EfEected by exchange of
notes at Bridgetown and Grenada December 19, 1966,
and olcembef 16, 1967. Entered into force December
16, 1067.

Indonesia

Agreement amending the agricultural commodities
florpement of September 15, 1967 (llAfe 0910 >• ^^
f?cteTby exchange of notes at Djakarta November
6? 1967. Entered into force November 6, 1967.

Trinidad and Tobago

Convention for the avoidance of do«bte taxation and
the prevention of fiscal evasion with respect to taxes
on income and the encouragement of international
tnadeTd investment. Signed at Port of Spam De-
cember 22, 1966. Entered into force December 19.

Proclaimed hy the President: December 28, 1967.

128

DEPARTMENT OF STATE BULLETIN

INDEX January ^2, 1968 Vol. LVIII, No. llfil

Asia. Secretary Rusk's New5 Conference of
January 4 IIC

Cambodia

Ambassador Bowles Designated for Mission lo

Cambodia (Wbite Plouse announcement) . . 119

President Jobnson's News Conference of Jan-
uary 1 (excerpts) 105

Secretary Rusk's News Conference of Jan-
uary 4 116

I'.S. Releases Note to Cambodia on Violations
of Its Territory (text of note) 124

Cyprus. U.S.-Cyprus Income Tax Convention
Terminated 127

Department and Foreign Service. Secretary

Rusk's News Conference of January 4 . . . 116

Economic Affairs

Action Program on the Balance of Payments

(Johnson) 110

Hearings To Begin March 25 on Future U.S.
Trade Policy 115

President Johnson's News Conference of Jan-
uary 1 (excerpts) 105

President Signs Executive Order on Capital
Transfers Abroad (text of Executive order) . 114

Secretary Rusk's News Conference of Jan-
uary 4 116

U.S.-Cyprus Income Tax Convention Termi-
nated 12T

U.S.-Japan Economic Talks To Be Held at
Honolulu 115

Europe. Secretary Rusk's News Conference of
January 4 116

Italy. President Jobnson's News Conference of
January 1 (excerpts) 105

Japan. U.S.-Japan Economic Talks To Be Held
at Honolulu 115

Laos. Secretary Rusk's News Conference of
January 4 116

Near East. Secretary Rusk's News Conference of
January 4 116

Presidential Documents

Action Program on the Balance of Payments . 110

President Johnson's News Conference of Jan-
uary 1 (excerpts) 105

President Signs Executive Order on Capital
Transfers Abroad 114

Science. U.N. Establishes Ad Hoc Committee To
Study Use of Ocean Floor (Goldberg, text of
resolution) 125

Trade. Hearings To Begin JMarch 25 on Future
U.S. Trade Policy 115

Treaty Information

Current Actions 127

U.S.-Cyprus Income Tax Convention Termi-
nated 127

United Nations. U.N. Establishes Ad Hoc Com-
mittee To Study Use of Ocean Floor (Go.ld-
berg, text of resolution) 125

Viet-Nam

President Johnson's News Conference of Jan-
uary 1 (excerpts) 105

Secretary Rusk's News Conference of Jan-
uary 4 116

U.S. Releases Note to Cambodia on Violations
of Its Territory (text of note) 124

Name Index

Bowles, Chester 119

Goldberg, Arthur J 125

.Tohnson, President 105, 110, 114

Rusk, Secretary 116

Check List of Department of State
Press Releases: January 1-7

Press relea.ses may be obtained from the Office
of News, Department of State, Washington, D.C.
20520.

Releases issued prior to January 1 which ap-
pear in this issue of the Bulletin are Nos. 299
of December 20 and 306 of December 27.

No.

1

Date

1/4

1/4

i3 1/6
t4 1/6

Subject

Rusk : news conference.

Program for visit of Prime Minister
Levi Eshkol of Israel.

Report on discussions of future U.S.-
Philippine economic relations.

U.S. note to U.S.S.R., January 5.

*Not printed.

tlleld for a later issue of the Bulletin.

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BULLETIN

Vol. LVIII, No. n92

January 29, 1968

MESSAGE TO AFRICA
Address by Vice President Humphrey 129

UNITED STATES AND CAMBODIA HOLD TALKS AT PHNOM PENH

Text of Joint Gomnw/nique 13S

U.S.-PHILIPPINE COMMITTEE HOLDS TALKS ON FUTURE ECONOMIC RELATIONS

Text of Commiittee Report llfi

UNITED STATES OFFICIALS REPORT ON OVERSEAS REACTIONS

TO PRESIDENT JOHNSON'S BALANCE-OF-PAYMENTS PROGRAM

Transcript of News Briefing 135

For index see inside hack cover

THE DEPARTMENT OF STATE

BULLETI

Vol. LVIII No. 1492
January 29, 1968

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f

i

il

Message to Africa

Address by Vice President Humphrey ^

Today I want to talk with you about tlie
people of Africa, the people of the United
St-txtes, and the conunon problems, aspirations,
and opportunities which we both share with
the wider family of man.

This is my first real visit to Africa. As any
newcomer, I am deeply impressed by the friend-
liness and exuberance of your people, by the
natural beauty and resources of your continent,
and by your determination to secure freedom,
justice, and human dignity for every African.

Indeed, I feel as though my heart has always
been here, as liave the hearts of most Americans
who share the dream of a just and peaceful
world.

In America we know that freedom, justice,
and human dignity must still be secured for
some of our citizens. And in parts of Africa —
in even greater proportion — we know that the
same is tnic. The conditions we seek to over-
come— ^those of injustice, exploitation, poverty,
and servitude — did not begin yesterday. Nor
will they be overcome tomorrow.

The important question for today is this: In
what direction are we moving?

Are we moving toward a future where all men
have the opportunity to share fully in the
bounty of their land and to participate fully in
the governing of their nations?

Or are we moving backward toward the time
when the few prospered at the expense of the
many, when dignity and freedom were the
chosen preserve of a self-appointed elite?

' Made at Africa Hall, Addis Al)aba, Ethiopia, on
.Ian. C. Ethiopia was one of nine nations visited by Vice
President Humphre.v during his i;!-day trip to Africa
Dec. 2D-.Ian. 11. The others were: Congo (Kinshasa),
Ohana, Ivory Coast, Kenya, Liheria, Somali Republic,
Tunisia, and Zambia.

As Franklin Roosevelt said more than 30
years ago:

The test of our progress is not whether we add to
the abundance of those who have much : it is whether
we provide enough for those who have too little.

Let it be clear where America stands.

Segregation : We opjjose it.

Discrimination : We oppose it.

Exploitation : We oppose it.

Social injustice: We oppose it.

Self-determination : We support it.

Territorial integrity : We support it.

National independence : We sup^jort it.

Majority rule — one man, one vote: We sup-
port it.

Iliunan brotherhood and equality of oppor-
tunity for every man, woman, and child : We are
conmiitted to it^ — in America, m Africa, and
around the world.

And we in America and you in Africa know
that the conditions which stand in our way shall
be overcome.

I bring this message to Africa as a representa-
tive of a nation and a people who feel they are
your natural partners, who have no colonial
memories or ambitions, and who shai'e your pur-
poses and goals.

The time is not long past when the fate of
this continent was decided in distant places.
There were those, both in Africa and abroad,
who said that Africans were not capable of
charting tJieir own destiny. But the facts betell
the lie. Those doubts have been dramatically dis-
proved.

The future of independent Africa is in your
hands. Aiid Africa Hall is where much of this
history will be written.

JANUARY 2 9, 1968

129

To those who even today try to preserve the
colonial past, I say : You tragically misread the
will and determination of Africans everywliere.
You misread history and fail to understand the
future.

To those who still believe that small minor-
ities can indefinitely hold domination over large
majorities, I say : You ignore the most vital and
inevitable movement of our time — ^self-determi-
nation.

I have seen freedom, pride, and self-confi-
dence in the faces of the ordinary men and
women in every African counti-y I have visited.

I have met with determined leaders who
know that social and economic progress will
come slowly but who are nevertheless ready to
sacrifice for it — to bring to their coimtries pro-
grams of health, of education, of rural develop-
ment, to build with such practical things as
rural roads and water systems.

And I have yet to meet one African who
would surrender his country's independence for
mere economic assistance.

Africa and America are committed to three
essentials of freedom and liuman progi-ess :

1. Independence with a full acceptance of
interdependence ;

2. National security with a firm commitment
to international cooperation for peace ;

3. National development witliin the frame-
work of regional cooperation.

Africa's Priceless Assets

You face many grave problems. But you also
possess many priceless assets.

Africa can remain insulated from much of
the turmoil and controversy elsewhere in the
world, as we in America did for the first century
and a half of independent nationhood. You can
make your choices, set your priorities, and de-
termme your true interests.

Most parts of Africa are not yet caught up in
the population explosion that holds back prog-
ress in other parts of the world. You still have
time to bring your food supply and human re-
sources into balance.

Beyond this, Africa has potential for enor-
mous agricultural productivity. With foresight
and management, with research and modern
teclmiques, you can both lift your own people
and help fill the desperate food shortage that
threatens others aroimd the world.

Africa, perliaps more than any other conti-
nent, can find a bright future in agi'iculture.

African nations need not turn, for the sake of
vanity, to grandiose industries which drain re-
sources without being competitive in world
markets.

This does not mean, of course, that Africans
should remain "hewers of wood and drawers of
water." The right industrial opportunities also
lie open to you.

You have raw materials, hydroelectric power,
and growing niunbers of trained engineers,
technicians, and workers. With careful plan-
ning, and with the creation of large-scale mar-
kets through regional cooperation, you can look
forward to healthy growth in industry and
trade. But havmg witnessed the tragic expe-
rience of others in rushing heedlessly into un-
economic industrial development, I know you
will choose both your industry and your mar-
kets realistically.

For our part, we in the developed nations
must be ready to do far more than we have
done to reduce barriers which restrict tlie ex-
ports of African and other developing nations.
It is not oiily in our enliglitened self-interest to
do so, but it must also be done because it is right
and just.

The United States intends to take the leader-
shi}) in reducing these barriers to trade and com-
merce.

You are also reaching outward toward new
regional cooperation. We enthusiastically sup-
port these efforts.

One of the lessons of recent liistory has been
that both markets and economic units must be
large enough to permit economic diversifica-
tion, competitiveness, and full employment.

In America we are fortimate to have such a
readymade large-scale economic unit. Others
in Europe, in Asia, and in Latin America are
building them just as j'ou are here.

For those wlio fear some loss of national
sovereignty in regional cooperation, I would
point out that the greatest loss of sovereignty
comes when a nation's people ai'e impoverished,
miable to find work, and unable to generate the
economic power which must lie at the heart
of independent nationliood.

We support the Economic Commission for
Africa.

We are encouraged by the work of the young,
vital African Development Bank, and we are
looking for new ways to help the Bank's special
fund.

We are heartened by tlie East African Com-
munity and its promise of growth.

130

DEPAKTMENT OF STATE BULLETIN

We see real potential in ev'olving e<:onomic
organizations in the Maghreb and in West
Africa, in negotiating for joint development of
river projects, m developing joint economic
plans among any group of like-minded coim-
tries.

We firmly support, too, the Organization of
African Unity.

If tliere are those who doubt the value of
the OAU, I direct them to the results of the
Kinshasa meeting in September. I believe it
■will prove to be a lanchnark in the growth of
African solidarity, a time when the world saw
the OAU's determination to come to grips re-
sponsibly with tangible problems and not just
to function as a convenient debating society.

Concept of African Solidarity

The concept of African solidarity deserves
and will receive the support of the American
people.

It is a concept which strives toward human
and social betterment, replacing violence and
dissension with brotherhood and peace. It is a
concept which binds men together rather than
driving tliem apart, a concept which respects
individual Iniman rights, as well as the unique
cultural and etlmic traditions of Africa's many
peoples.

It is this concept which has been at work
in ameliorating relations among Kenya, Ethi-
opia, and Somalia.

It is a concept that will be further tested this
spring in West Africa.

It is present whenever African nations work
together on development of transport, river
basins, or common markets — or when they con-
sider the problem of refugees, as you recently
did in this hall.

Tlie concept of African unity is surely the
only sane path toward peace and justice in a
world where mankind possesses the capacity for
self-annihilation.

I will not tell you all that America has done
to help Africa. We have done a good deal — but
it is still not enough.

Both the President and I deeply regret that
our requests for foreign assistance have been
reduced tliis year. We do not intend to retreat
in the face of these reductions — or fall back be-
fore those in America who call for a new
isolationism.

We intend to take our case before the Ameri-
can people. We intend to let them decide the

course we shall follow in the outside world.
I know my countrymen. They will not turn
away from their responsibility to others, in-
cluding Africa.

Human Riglits and Self-Determination

Yet, despite any amount of economic assist-
ance to Africa, we can never rest until human
as well as economic rights are fully realized.

On the third anniversary of the OAU, Presi-
dent Johnson set forth our position : *

The foreign policy of the United States (the Presi-
dent said) is rooted in its life at home. We will not
permit human rights to be restricted in our own coun-
try. And we will not support policies abroad which are
based on the rule of minorities or the discredited no-
tion that men are unequal before the law.

Nowhere are these rights more challenged
than today in southern Africa.

The case of South West Africa is but one case
in point. But it contains all the elements of
tragedy which characterize this situation.

My Government, through all legal and prac-
tical means, has tried — both alone and together
with other members of the United Nations— to
persuade South Africa to change her policies
and practices with respect to South West
Africa. We shall persist in these efforts.

In 1966 we joined the majority of the United
Nations General Assembly in declaring that
South Africa had failed to carry out the terms
of the mandate over South West Africa and
that the U.N. henceforth should assume respon-
sibility for the territory.*

Tlie South African Government is now trying
32 citizens of South West Africa — originally
37 — on charges of terrorism.

This trial is being conducted in Pretoria, over
1,000 miles from the homes of the accused. The
charges, made mider a South African law
enacted as much as a year after the alleged
crime, could lead to sentences of death.

That trial is a farce. It is based on a law that
provided for the retroactive political persecu-
tion of wards of the international community.
It raises fundamental questions regarding inter-
national norms of behavior. Great legal and
human issues are involved here. We believe that

" For an address made by President Johnson on
May 26, 1966, see Bulletin of June 13, 19G6, p. 914.

' For background and text of a U.N. General Assem-
bly resolution of Oct. 27, 1966, see iMd., Dec. 5, 1966,
p. 870.

JANUARY 29, 1968

131

the rights and well-being of the 32 are the
legitimate concern of all the international
comininiity.

As Thomas Jefferson wrote in the early days
of xVnierican independence: "All eyes are
opened or opening to the rights of man . . . the
mass of mankind has not been born with saddles
on their backs, nor a favored few booted and
spurred, ready to ride them legitimately, by the
grace of God."

We have supported majority rule, human
rights, and self-determination throughout tlie
world. We will not abandon them in the south-
ern sixth of Africa. That commitment dictated
our response when a white minority regime
seized power in Rhodesia. We strongly con-
demned that action, refused to recognize the
regime, and joined with others in the imposition
of voluntary economic sanctions.

Wlien stronger measures were required, we
gave full support to the U.N. policy of manda-
tory economic sanctions against the illegal
regime in Salisbury.*

No country in the world has recognized the
small minority which denies to the great major-
ity of the Rhodesian population effective par-
ticipation in the governing process. In the long
run, such reactionary behavior cannot succeed,
neither in Southern Rliodesia nor in other parts
of southern Africa where self-determination is
still denied.

President Jolinson said 18 months ago :

A nation in the 20th century cannot expect to
achieve order and sustain growth unless it moves —
not just steadily but rapidly — in the direction of full
political rights for all its peoples.

The Promise of America

I said at the beginning that we in America
see ourselves as yoiu- natural partners. We feel
this, most of all, because we see within ourselves
the vision which challenges you, the principles
which gtiide you, and the creativity which moti-
vates you.

We, too, were favored with abimdant natural
resources and with the detennination and imag-
ination to use them productively.

We also profited from a flow of investment
from more developed countries. Our canals, our

'For background, see ibid., Jan. 9, 1067, p. 73, and
Jan. 23, 1067, p. 14.5.

railroads, and much of our early industry were
financed in large measure with foreign capital.

We, like you, have always sought a world of
peace in which we could develop and mature in
our own way. We borrowed freely from the ex-
perience of other nations- We resented inter-
ference and resisted alien doctrines long before
thej' were served up under the now tattered and
discredited banner of "wars of national
liberation."

To this very day we are determined to fulfill
for every American the promises of our Decla-
ration of Independence: the inalienable rights
of "Life, Liberty and the pursuit of Happi-
ness." Our revolution is a continuing one.

There are some Americans who do not enjoy a
full measure of opportunity in education, in
housing, in employment, in social justice. AVe
shall not rest until full opportunity for all is
an accomplished fact.

We are very much part of the world revolu-
tion of rising expectations, and we have
experienced the frustrations and violence
resulting from legitimate expectations too long
postponed.

Yes, we live in a rapidly changing world :

— a world in which colonialism has given way
to national independence and self-determina-
tion;

— where men are no longer divided as ex-
ploiters and exploited but are being given the
chance to prove themselves on their own merit
and merit alone;

— where artificial social delineations are fall-
ing away in the face of the inescapable and
clear reality that all men are created equal.

We, now, in our time and generation, have
the power to make this change more rapid, to
bring the world closer to its vision of peace
and freedom.

We in America are with you, materially and
with our liearts, in your efi'ort to build a new
and better continent. We may at times make
mistakes. Our own shortcomings may be paui-
fully clear. We may, in confusion, sometimes
obscure our real purposes and goals. But you
should know nonetheless that our pledge is firm
and will not be withdrawn.

One of my favorite authors — one which I
wish more Africans could Icnow — is the Ameri-
can writer of the 1930's, Thomas Wolfe.

132

DEPARTMENT OF STATE BtTLLETIN'

Tliomas "Wolfe spoke out on behalf of all
Americans — he spoke our thoughts and dreams
— at a time when our America was filled with
poverty, liopelessness, discrimination, and
injustice.

To every man bis chance (he wrote), to every man
resardless of his birth, his shining golden opportunity.
To everj" man the right to live, to work, to be him-
self. And to become whatever things his manhood and
his vi.sion can combine to make him. This ... is the
promise of America.

Yes, this is the promise of America; and I
believe it is the promise and the cause of all
mankind.

It is a promise which one day will come ti'ue,
not only in my own country but here on this
continent where riches lie beneath your feet —
and in every farm and village where people are
determined to lift themselves.

It will come true if we determine to make it

so.

I think we can and shall.

United States and Cambodia Hold Talks at Phnom Penh

Chester Bowlex. American Ambassador to
India, tccus in Cainbodia January 8-12 as a spe-
cial representative of President Johnson. Fol^
lowing is the text of a joint communique at
Phnom Penh released at 7 :30 p.m. on Janu-
•iry 12 Cambodian titne, together tcith a state-
itwnt made by Ambassador Boivles upon his
return to New Delhi that day.

JOINT COMMUNIQUE

Pri'ss release 15 dated January 12

The Honorable Cliester Bowles, Special Rep-
lesentative of the President of the United
.•States, accompanied by other officials of the
United States Government, visited Phnom
Penh from January 5 to January li^, infiS to
discuss matters of mutual interest with the
Royal Cambodian Government.

During his visit Amba.s.sador Bowles was re-
ceived by His Royal Highness Prince Norodom
Sihanouk, the Chief of State of Cambodia, and
participated in several working meetings with
Ilis Excellency il. Son Sann, Prime Minister,
assisted by higli officials of the Royal Cambo-
dian Government.

During the discussions, Ambassador Bowles
renewed American assurances of respect for
Cambodian .sovereignty, neutrality and terri-
torial integrity. He expres.sed the hope that the
effective functioning of the International Con-

trol Commission would avert violations of
Cambodia's territory and neutrality by forces
operating in Vietnam. Moreover, he declared
that the Government of the United States of
America is prepared to provide material as-
sistance to the International Control Commis-
sion to enable it to increase its ability to per-
form its mission.

His Royal Higlmess Prince Sihanouk clearly
expressed his Government's desire to keep the
war in Vietnam away from his borders. He
stressed Cambodia's desire that its territory
and its neutrality be respected by all countries,
including the belligerents in Vietnam. The
Royal Government is determined to prevent
all violations of the present borders of Cam-
bodia. For this reason, the Royal Government
is exerting every effort to have the present fron-
tiers of the Kingdom recognized and respected.

Ambassador Bowles, convmced of Cambo-
dia's good faith, emphasized that the United
States of America has no desire or intention to
violate Cambodian territory. He assured the
Royal Cambodian Govermnent that the United
States will do everything possible to avoid acts
of aggression against Cambodia, as well as in-
cidents and accidents which may cause losses
and- damage to the inhabitants of Cambodia.

His Royal Higlmess Prince Norodom Siha-
nouk recalled that the Royal Government has
since 19G1 proposed the strengthening of the
International Control Commission by the pro-
vision of additional means, by the creation of

jjU JANUARY 20, 1968

1:33

mobile teams, and by tlie establishment of fixed
posts at various points in the country, and that
this proposal still remains valid. The Royal
Government is prepared to confirm anew to the
International Control Commission that it still
favors the strengthening of that organization
so that it may be able, within the framework of
its competence as defined by the Geneva Agree-
ments of 1954, to investigate, confirm, and re-
port all incidents as well as all foreign infiltra-
tions on Cambodian territory.

In the course of these conversations, there
was also a frank exchange of views on the gen-
eral situation in Southeast Asia and on other
subjects of mutual interest.

The working sessions took place in an atmos-
phere of reciprocal respect, comprehension, and
good faith. The two sides expressed their satis-
faction as well as their willingness to partici-
pate in similar meetings in the future.

At the end of his visit, Ambassador Bowles
expressed for himself and the members of the
American delegation the deepest gratitude for
the cordial reception and warm hospitality ac-
corded by His Royal Highness Prince Norodom
Sihanouk of Cambodia and the Royal Govern-
ment.

Son- Sankt

Chester Bowles

STATEMENT BY AMBASSADOR BOWLES

I am pleased to be able to say that the con-
versations between Cambodia and the United
States have gone well. On the one hand, we
were able to assure Prince Sihanouk of my
country's continumg respect for Cambodia's
sovereignty, neutrality, and territorial integ-
rity. On the other, the Cambodian Govern-
ment reaffirmed its determination to have its
territory respected by the North Vietnamese,
the Viet Cong, and, indeed, by all countries
engaged in the fighting in Viet-Nam. To help
achieve this goal, the Cambodians expressed
their firm desire for a stronger and better
equipped ICC. The meetings were most cordial,
and each side made a determined effort to un-
derstand and see each other's pomts of view
whenever possible. I believe we have made an
important step toward safeguarding Cambo-
dia's neutrality and, in a significant degree, the
furtherance of peace in Southeast Asia.

U.S. OfFers Helicopters for ICC
Surveillance Work in Cambodia

Press release 5 dated January 10

Following is the text of a U.S. message con-
veyed to the Royal Cambodian Government hy
the Australian Emhassy at Phnom Penh on
December 25.

The deep concern of the Government of the
United States of America over Viet Cong and
North Vietnamese use of Cambodia was con-
veyed by note to the Royal Cambodian Govern-
ment on December 4, 1967.^ The United States
Government is disappointed to note that the
Royal Cambodian Government, in its reply,^
does not share this concern. Nonetheless, the
problem remains grave and the Government of
the United States of America remains anxious
to assist in its amelioration. Accordingly, it
wishes to put forward tlie following proposal:

The United States Government is prepared to
offer material assistance to the International
Control Conmiission (ICC) so as to provide the
means of more effectively monitoring violations
of Cambodian neutrality. The United States
Government's intention is to enable the ICC to
have a greater mobility and the consequent ca-
pability of conducting independent and random
surveillance activities which would render sig-
nificant assistance to the Royal Cambodian Gov-
ernment's attempts to maintain its neutrality.
The United States Government believes this of-
fer is responsive to the suggestion made at a
press conference on November 26 by the Cam-
bodian Chief of State, His Royal Highness,
Prince Norodom Sihanouk.

Tlie delivery of the material assistance would
be made to the ICC under arrangements on
which the Royal Cambodian Government would
be consulted. The kind of assistance to be pro-
vided is a matter to be arranged. Our thinking
is to make available for an agreed period two
helicopters with which at least French, Cana-
dian or Indian crews are familiar. Also, the
United States Government would cover the costs
of the maintenance and operation of these two
helicopters. Delivery would be made at Siha-
noukville or any other point in Cambodia.

' Bulletin of Jan. 22, 1968, p. 124.
' Not printed here.

134

DEPARTMENT OF STATE BULLETIN

United States Officials Report on Overseas Reactions
to President Johnson's Balance-of-Payments Program

Under Secretary of State Nicholas deB.
Katzenbach^ Under Secretary of the Treasury
Frederick L. Deining, and William M. Roth,
Special Representative for Trade Negotiations,
discussed President Johnson's balance-of-pay-
ments program xvith government leaders in the
six Common Market countries and Switzerland
January 2-6; Under Secretary of State for
Political Affairs Eugene V. Rostow undertook a
similar mission to Japan, Australia, and New
Zealand during the sa7ne period. Following is
the transcript of a news iriefing they held at the
Department of State on January 8.

OPENING STATEMENTS

Mr. Kaizenbach

Ladies and gentlemen, Mr. Deming and Mr.
Roth and I have just completed a trip to Europe
to describe the President's balance-of -payments
program ^ and to seek the ideas and thoughts of
the various European leaders on the subject.

Mr. Rostow has just completed a similar trip
into East Asia for the same purpose.

In general, it was our experience in Europe
that the action taken by President Jolinson was
recognized as necessary and essential, as coura-
geous, and as absolutely unavoidable, given the
balance-of -payments situation the United States
was in.

The various countries were, of course, inter-
ested in detail, interested in estiniates, mterested
in figures. They had done some of their own
work on this. They had concern about what the
impact of the proposals that the President — the
action the President had taken- — the proposals
he had taken might be upon them, a natural

' For background, see Bulletin of Jan. 22, 1068, p.
110.

enough concern; but at the same time without
exception they endorsed at least the general
principles of the action that he was taking and
the steps already undertaken.

That is it in very brief summary as far as
Europe is concerned.

Perhaps you'd like to add a word as far as
Japan, Australia, and New Zealand were
concerned.

Mr. Rostow

Yes. The action taken was very much the
same. There was universal feeling that the
President had acted decisively and with great
courage in the face of the financial disturbance
that had followed upon the devaluation of ster-
ling in November, that he had laid out a pro-
gram that was balanced and adequate and, with
the passage of the tax bill and restraint at home
in wages and prices, assured the world econ-
omy a very firm and durable base.

There was universal recognition that a strong
dollar is the keystone of the world economy, and
there was an offer on the part of all three gov-
ernments that we saw of full cooperation in
every way to make this program a success; the
recognition that success in protecting the dollar
meant also success in protecting their own cur-
rencies and their own economies.

At the same time, there was concern about
two possibilities :

One, the possibility that there might be finan-
cial stringency and a shortage of money in the
reserves and of credits in the wake of this
drastic cutdown in the outflow of dollars from
the United States.

In the second place, vei-y great concern that
any actions at tliis time might trigger a revival
of protectionism and a loss of all that had been
gained in opening up with the world economy
through the Kennedy Round negotiations.

JANTJART 29, 1968

135

So it was accepted on the part of all thi-ee
governments that I saw that this trip was not
merely informative but the beginning of the con-
tinual consultations through tliis period so that
our cooperation — the cooperation of all the mam
trading countries — should be effective, so that
tliey could reach harmonized and concerted po-
sitions not only to manage the process of bal-
ance-of-payments adjustment so that the deficit
countries and the surplus countries could move
together toward balance-of-payments equilib-
rium but to manage all other aspects of policy
involved in the adjustment process — the mili-
tary side and the trade side — so that we could
reach solutions which were expansionist and
not restrictionist.

Mr. Katzenbach

Let me ask Mr. Deming, who talked with a
number of the central bankers in Euroi^e, if he
would like to add a word.

Mr. Deming

Nothing mucli. I think all of them had the
same feeling that Secretary Katzenbach and
Secretary Kostow have described : that the pro-
gram was necessary, showed great courage on
the part of the President, and that it was higlily
important not only for our purpose to preserve
the strength of the dollar but to preserve the
strength of the international monetary system,
of which the dollar is of major import.

Mr. Katzenbach

We'll be happy to take any questions you
might have.

QUESTIONS AND ANSWERS

Q. Mr. Katzenbach, what was the waction to
the travel curi on the part of some European
countrks as to what the nature of the travel
curb might be, and how did you ex plains-
Mr. Katzenbach: The reaction — there was
concern on the part of some European countries
as to what the natui-e of the travel curbs might
be and how they might be affected by them.

I explained to them that the President did not
have in mind any absolute prohibitions on
travel, he did not have in mind an exchange-
control system, that we were in the proceas of

consulting the Congi-ess in this regard, tJiat the
reason for taking action with respect to tourism
is that we ran last year a $2 billion deficit and,
with that big a deficit on the tourist account, it
seemed necessary to do something that would
create a savings on the balance-of-payments side
with respect to tourism.

We then discussed a number of possible ap-
proaches, on which I simply sought their views.
You got different reactions. This was of concern
in at least three or four of the countries that we
visited and de^Dendent somewhat on respect to
what their own tourist account was, what prob-
lems the devaluation of the pound and the de-
valuation of some other currencies followmg the
pomid had given them with respect to compe-
tition within the sort of tourism account.

Q. Did you. assure them students and busi-
nessmen would be exempt from these travel re-
strictions, as Secretary [of Commerce Alex-
ander B.] Trowbridge apparently did the other
day?

Mr. Katzenbach: No, I did not assure
them of that. I said, with respect to students,
we had an interest in students going abroad,
particularly if they were going abroad for
study, and that was one possible exemption that
the Congress might propose.

I don't believe that I said anything about
exemptions for businessmen.

Q. Mr. Secretary, there is a fear that has
been expressed by some critics that any move
toward restricting travel of Americans abroad
might, togetJier with otlier faxitors, accelerate
a. process perhaps toward some kind of isola-
tionism. Do you feel that this Is a legitimate
fear?

Mr. Katzenha-ch : I think that all of us, Mr.
Kalb [Marvin Kalb, CBS News], have an in-
terest of extending travel rather than restrict-
ing it, that we want people to know more about
other countries in the world — Americans to
know more about other countries in the world,
and we want people who live abi'oad to know
more about the United States. So I thinJv there
is a major and valuable interest that we have
in preserving freedom of travel.

Now, right at the moment, what we would
like to see is people who live abroad learn more
about the United States, because this would
help on the balance of payments.

Q. Mr. Secretary, do you expect West Ger-

136

DEPARTMENT OF STATE BUltLETIN

many to of set fully the Tnilitary dollar loss in
Germany?

Mr. Katzenhach: I don't know what they
will do in tliis respect. I think it's extremely im-
portant that the balance-of-payments cost of
maintaining American troops abroad in a com-
mon interest be dealt with as a common prob-
lem and that in that reccard that action be taken
to offset the balance-of-payments losses which
can occur from almost an accident of geogra-
phy, if j'ou will, in a common alliance system.

Q. Did you get any assurances on this?

Mr. Rostow: May I add a little on that per-
haps?

If you will recall the background of this prob-
lem, with the trilateral talks last year in the
spring,- those negotiations which were highly
successful from our point of view have estab-
lished several new principles in handling the
lialance-of -payments consequences of the ac-
cident that Mr. Katzenhach sees — the geo-
iriaphic accident — that British and American
and other Allied troops stationed in Germany —
and the essence of the idea was that, beyond
offsets and beyond purchases and military pro-
curements and so on, the residual balance-of-
payments consequences of the military presence
in Europe would be dealt with through measures
of cooperation in the management of monetary
reserves.

That is an extremely important princi{>lc,
and it's the basis of negotiations with other
idinitries where our troops are stationed; and
we expect to use it as the foundation of our ef-
forts to build, hopefully, a multilateral system
for dealing with these problems and more per-
nument on-going system for handling the issue.

Q. Secretary Rostow^ ivould you say. sir, that
definite support of the U.S. program, is condi-
tioned to the Congress not passing any protec-
tire legislation, ar how wouhl you expand that?
Windd you expand on protectionism?

Mr. Rostoin: Prime Minister [of Japan
Eisaku] Sato made a very eloquent and moving
statement about the political meaning of the
President's plan. He said that every thoughtful
person in the world would appreciate and
understand the fact that the Government of the
United States is imdertaking to deal with the
balance-of-payments problem through the ad-

- For text of a t'.S. statement issued on May 2, 1!M)7.
see ihld.. May 22, 19C7, p. 78S.

justment of ordinary biisiness activities in tour-
ism and trade without touching its security
commitments, its overseas troop presence, or its
aid program.

He said this was an extraordinary political
fact, and he paid very high compliments to the
courage of the President in proceeding along
this line. And he said every political leader in
the world would have to give very careful
thought to this, which he regarded as the es-
sence of the President's program as annotmced
on January 1st.

Now, he expressed concern about the avail-
ability of credit under the credit program as
far as Japan was concerned and the risk, as I
said before, of protectionism arising out of
trade measures that might be taken.

But what he proposed simply was that we
remain in very close touch on these problems,
that we discuss them together and try to reach
agreed solutions which would be expansionary
and not contractionist in their impact. So that
he was not making any threats or qualifying
his support of cooperation in any sense what-
ever. He was simply recognizing a common
problem.

Q. Mr. SecretaTy, you have heen talking
ahmit the revival of protectionism: How can
you increase exports and decrease invports
without protectionism measures?

Mr. Katzenhach : If your question is whether
or not you can increase exports in relation to
imports, you can do it by a little bit more
aggressive sales policy.

Q. Mr. Secretary, shortly after the Labor
Party took office in England in 'ff^, they had a
run on the pofund. Tlie government resorted to
prcc'/sely the same measures you have just re-
sorted to here: They slapped a lower tourist
allowance on tourists, and they put on a 15-
perccnt import tax to keep the pound at home.
These measures have proved singularly in-
effective, and, the pound was devalued. Is there
any reason that the sa7ne measures to try to save
the dollar would he any less ineffective?

Mr. Katzenhach: Yes, there is. They are not
the same measures and doii't even bear a remote
relationship to those measures.

Q. Go ahead — why?

Mr. Katzenhach: Because I just explained
we were not imposing exchange controls with
respect to tourism. So you say "If we are going

JANUARY 2 9. 19 68

137

to put on exchange controls, why do we expect
them to be effective" after I just said we were
not going to do this. And then you talk about
a "15-percent tax." Nothing we are talking
about is a 15-percent tax.

Q. But the device dijfers slightly, l>ut still
they are hoth devices for keeping the currency
at home.

Mr. Eatzenhach: They differ in a very major
way.

Ml'. Rostmo: The underlying reserve posi-
tion of the dollar is totally different, and the
role of the pound in world trade and the role
of the dollar in world trade and finance are
totally different.

A Problem for Surplus and Deficit Nations

Q. Could we put it this way: On the basis
of this initial survey that you have made, do
you feel that the Presidents program can, given.
any time period that you might care to suggest,
take care of this problem?

Mr. Katzenbach: Yes, I think it can take
care of the problem. I don't think anybody con-
templates the measures as being in any sense
permanent kinds of measures. A good deal will
depend on the response of other countries.

I put forward the thesis — and I am sure Mr.
Rostow did as well — that, while countries in
deficit on the balance of payments have obliga-
tions to take steps to move toward equilibrium
or close to it, countries that are in surplus have
obligations to deal with the other side of the
problem.

The simple fact of the matter is that you
cannot get rid of a deficit without getting rid of
a surplus. Unless we adopt a new system of
keeping accounts, it can't be done.

Mr. Rostow : The principle has been accepted
by the OECD [Organization for Economic
Cooperation and Development]. I think if you
will look at the background of the problem since
the war, you will see the prospective of it. For
many years we have been running a deficit — for
about 17 years. For most of that period, this
was a deliberate act which was the fuel of re-
covery in Europe and Japan, and it was
heartily approved by all the leaders— countries
of the world— as a means of redistributing the
world reserves which accumulated in the United
States during the thirties and during the war.

It has become a problem for monetary man-

agers only in the last few years. And at the meet-
ing of the OECD as recently as the 1st of De-
cember it was agreed unanimously that there
was a common problem that had to be handled
by both surplus and deficit countries together.^

Q. Secretary Rostow, you referred a moment
ago to using the technique of the trilaterals.
Which other countries do you have in mind?
Isn't that a principle amounting to perpetuat-
ing the surplus, postponing the deluge?

Mr. Rostow : Well, it remains to be seen what
devices of cooperation are developed and in
what time frame.

Q. Well, if other countries are stockpiling
American Treasury paper, in what sense is that
reducing our deficit?

Mr. Rostow: Well, all forms of cooperation
in the management of reserves don't have to
take the form of purchasing Treasury bonds.

Q. This is the technique you are referring to,
isn't it?

Mr. Rostow: That was the principle. But we
can, hopefully, develop new techniques through
NATO and otherwise that will broaden and di-
versify our means of cooperation in this field.

Q. Mr. Secretary, I v/nderstand a consider-
able dollar drain has gone into private funding
for Israeli bonds. Are we asking Israel to call
off its bond campaigns in this country?

Mr. Katzenbach: No.

Mr. Deming, correct me if I am wrong. I
think a good deal of that money came back to
the United States in one form or another.

Mr. Deming: And we are not going to ask
Israel to call off that loan.

Q. Mr. Secretary, what is going to be done
about American tourists who go either to
Canada or Mexico and go overseas from there?
How do you control that in any way? Do you
propose to establish any controls at the frontier?

Mr. Katzenbach: I would think it would be
very difficult to establish any controls at the
frontier with respect to Canada and Mexico.
But, if they proceed to go overseas from there,
then I would expect them to comply with what-
ever law that we have. I don't think, in any
event, that would constitute a major drain, for

" For background, see ilid., Dec. 2.5, 1967, p. 876.

138

DEPARTMENT OF STATE BULLETIN

ii

the rather simple reason that I thuilc most
American citizens are law-abiding and that if
they have a tax, they ■will pay it.

U.S. Tax Increase an Important Element

I Q. Mr. Secretary, there have been reports
that the French Finance Minister, Mr. [Michell
Debrc, has some very grave reservations about
the administration's entire program and he has
conditioned French support — and I would
think, by indirection, this might also mean the
Common Market support — upon the passage of
tJie tax increase. What happens if the tax in-
crease is not passed?

Mr. Katzenbach: It is perfectly correct to say
that Mr. Debre felt that it was essential that the
noninflation tax be passed by the United States.
"We didn't express any disagreement with that.
"We think that is important, too. President
Jolinson has made that quite clear. He thinks
that is an essential part of this program. So, in
that respect, there certainly was no difference of
opinion between us and Mr. Debre. I don't think
he conditioned support on that, but I think he
said "That is a primary element in the solution
of your problems, and, without the tax increase,
I don't think your other measures will solve
them." This is the essence of the message that he
had.

Mr. Deming : Can I say a word on that ?

Mr. Rostow: I got the same message in the
Far East. Eveiyone in the Far East felt that
the passage of the tax bill and other measures
of restraining inflation at home were essential to
make this program effective and credible.

Mr. Katzenbach: Mr. Deming had a word.

Mr. Deming: Just a word on this point, be-
cause I think there are two important aspects
of it that need to be understood.

Everywhere we were in Europe — and I have
heard tliis elsewhere, also — there was consider-
able regard for the necessity of keeping the
United States economy growing but in a stable
fashion, if that doesn't sound paradoxical to
you. No one wanted the United States to adopt
sharp deflationary measures which would have
a greater impact on the world economy. Con-
tainment of inflation, yes — deflation, no.

In this context, the fiscal part of the tax pro-
gram, expenditure control, not too much genera-
tion of new money — all of these were regarded
as important for the maintenance of world eco-
nomic health. And, in that context, everybody
has told us, as Mr. Katzenbach has just told you.

the tax bill is a necessity to make the whole thing
work. I don't think anybody represented their
acceptance of the other measures as being ab-
solutely contingent on the tax bill. They just
said, as Mr. Katzenbach has said, that the other
measures wouldn't work very well unless we
were able to contain the American economy.
And it is in that framework that you have to
look at their attitude with respect to the tax bill.

Q. Mr. Katzenbach, why was Greece ex-
empted from, the —

Japan's Cooperation and Understanding

Q. Was your mission the first time that the
principle of cooperative management of mone-
tary reserves was brought to the Far East and,
in particular, to Japan? And what was their
reaction?

Mr. Rostow : No, it was not. We have been co-
operating very closely with Japan in handling
balauce-of -payments and reserve problems now
for several years. It has been one of the prin-
cipal contributions of the Joint Cabinet Com-
mittees which have been meeting ; and their re-
action was one of understandmg and of full
cooperation within the limits of their capacity.
The specific issues to be discussed for the coming
year will come up at a meeting in Honolulu at
the end of this month. The meetings we had in
Tokj'o, as I have said, were not negotiating ses-
sions but exploratory sessions and sessions of
consultation to prepare the way for the meetings
in Honohilu. But this is not a new principle in
our relationship with Japan.

Q. Just about the principle of military offset
— is that new?

Mr. Rostow : That's what I meant. I thought
that was the question.

Q. Mr. Secretary, we have heard that the
Japanese Foreign Minister lauded the Presi-
dent for not sacrificing security commitments in
this area. Did anyone on the way talk about the
best ivay to hasten the balance-of-payments
problem would be to hasten an end to the war
in Viet-Nam?

Mr. Rostow : No. Well, the Australians talked
about it ; but, of course, their views are pretty
vigorous.

Q. To what extent could you —

Mr. Katzenbach: I understand — Mr. Fan-
fani [Ammtore Fanfani, Italian Foreign

JANUARY 29, 1968

139

Minister] in Italy inquired of me the impact
in that regard. I responded to him privately, as
I responded publicly on this, that if Viet-Nam
did not exist, ^Ye would still have a balance-ot-
payments problem and we would still have to
deal with it.

Q. Secretary Rostow, with the capital hivcst-
ments, the Groii.]) B cotmtries-^vhlch have heen
cut to 65 percent^would that apply to them, m-
dividimlly, or the 1965-1966 average, or as a
(jroup?

Mr. Rostoxo: As a group. The regiilation
deals with individual companies, in the first in-
stance; and their investment decisions withm
this group of countries, as a group— so tliat it
is impossible at this moment to tell any particu-
lar country, until company decisions have been
indicated exactly, what cut in the investment
outflow from the United States is involved for
that country.

Q. Mr. Katzenhach, did any of the European
coimtries suggest toe ought to cut down on
troops in Europe instead of cutting doion on
investments in Europe?

Mr. Katzenbach: No; quite the contrary.

Q. They were all for keepijig all the forces
we had tJiere?

Mr. Katzenbach: Yes. And I would say, with-
out exception, they recognized their obligation
to deal in one way or another with the balance-
of -payments problems that were caused thereby.

Reaction to Possible Travel Restrictions

Q. Mr. Secretary, you mentioned there are
seceral possible approaches that were discussed
on tra.vel. What were tliese approaches? And
what reaction did you, get to them?

Mr. Katzenbach: The approaches we dis-
cussed were simply a variety of possible tax
measures —

Q. What, for example?

Mr. Katzenhacli: — and, with respect to the
reactions to them, I would say a good deal of
relief that this was not going to be an exchange-
control measure ; some concern as to how much
this would aifect travel; in some countries a
concern that it might affect travel to them more
than others. For example, countries such as
Italy, which felt that many of the Americans

commg to Italy were of Italo-American origin
and of modest means, felt that we ought to do
something to distinguish them from the jet set-
that kind of consideration.

We simply put forward a whole variety of
ways in which this might be controlled, ways
that you can tliink of as well as I, simply to see
whether they had any reactions to one method
rather than another.

Q. Could you give u.s a few examples?

Mr. Katzenbach: Oh, the possibility of a head
tax, increase in passport fees, tax on the days out
of the country, and maybe three or four other
measures of that kind.

Q. Well, how does that help Grandma against
the jet set? [Lavghter.]

Mr. Kiifzenhach: They pointed out that there
might have to be some exemptions or changes,
that this might fall inequitably on the —

Q. What did you say?

Mr. Katzenbach: I said I tliought that was
something very much woi+h considering.

Q. You msntioned some kind of exemption
for relatives, people with ethnic origin.

Mr. Katzenbach : Oh, it could be that. It could
be an exemption for people who hadn't traveled
abroad over a certain period of years. You
could have, oh, a variety of ways of dealing with
this. The legislative process is one that gives
room for various ingenuities in terms of trymg
to make it equitable.

Q. Could you explain, Mr. Katzenbach, why
Greece toas exem,pted from the investment re-
strictions?

Mr. Deming: It's a part of the interest equali-
zation tax list. It's in Category A. So is Fmland.

Q. Where is that list, by the way? Is there
such a list?

Mr. Dem.ing: Oh, of course.

Q. Isn't it all others who aren't in Category
B or Category C?

Mr. Deming: No. If you look at the interest
equalization tax list, you have a list of what is
classified there as "developed countries," and
every other country is a less developed country.

Q. There's no list of "■less developed'' as such.

140

DEPARTMENT OF STATE BULLETIN

Mr. Deming: Just all the other countries in
the world, yes; there is such a list. As a matter
of fact, I think it's in the record of the hearings
of the Interest Equalization Act.

Q. There H no Government document of such
a list.

Mr. Katzenhach : No; but if j'ou subtract the
other countries from the developed countries —
and you have, you know, a National Geogi-aphic
globe in front of you — you probably could
work it out. [Laughter.]

Q. Secretary Katzenhach, you talk about a
list in that Executive order. There's no such I'tst;
ifs all the others left off.

Mr. Katzenbach: That's a list, isn't it?

Q. Well, where is there a list^

Mr. Deming: There's a list on the interest
equalization tax — published in 1965, I believe
it is.

Q. Tlianks a lot.

Mr. Deming: If you're really interested in
that, I am sure we can get you a copy.

Q. Mr. Katzenhach. you said earlier there''s
nothing like a 15-percent tax on imports.

Mr. Katzenhach: Yes.

Q. Does this indicate there will he some sort
of tax on imports., even a teeny-weeny one?

Mr. Katzenhach: That is a possible measure.
It would be related to what countries are per-
mitted to do within the rules of GATT [General
Agreement on Tarifl's and Trade].

Q. In that connection., Mr. Secretary —

Discussions With Common Market Countries

Q. Mr. Secretai'y, did you a'sk tlie Common
Market countries to modify their contemplated
rneasures on their turnover tax and, if so, what
reaction did you get?

Mr. Katzenhach: We discussed that. We un-
derstood the reasons for their value-added tax
measures in their efforts to equalize the tax
system among the Six. We contended that this
liad some impact on those who were outside the
Six, some advei-se impact. Thex'e wasn't a great
deal of argument with the efl'ect that this might
have, although there might be disasreement as

to how much it was; so we did discuss that prob-
lem. It's a problem that Mr. Roth discussed
within the Kennedy Eoiuid, I believe, and which
is capable of further discussion ; isn't that right?
Mr. Roth: Tliat's right.

Q. Mr. Secretary —

Q . D Id yo ugct amy Indication that they might
be prepared to modify tlhelr system so as to do
away with any adverse impact on the United
States?

Mr. Katzenhach : I think it would be fair to
say they'd be willing to consider whatever ad-
justments were necessary. I'm not sure that
would necessarily be a modification of their sys-
tem. It might be in two steps. They might pro-
ceed to do what they're doing and then see what
mode of adjustment one could make to the out-
side. And I tliink that would require some quite
teclmical discussions multilaterally, probably
within the GATT, before you could really ar-
rive at that kind of a figure. But it doesn't neces-
sarily require their changing that system if
there's another way of taking account of the
external effects of it.

Q. What Is the possibility of us giving a re-
hate to our exporters of taxes paid here?

Mr. Katzenhach: I should think that would
be considered to the extent that it could be done
within the rules of GATT.

Q. This means a direct tax as opposed to —
wait a minute- — a nonincome tax?

Mr, Katezenhach: Yes. GATT permits an ad-
justment for indirect taxes passed on to the con-
smner. I should think that would be something
that at least should be considered.

Q. Wouldn't that he an export subsidy? I
th might that loas illegal under GATT.

Mr. Katzenhach: You can take — many Euro-
pean countries have had border taxes based upon
indirect taxes. It's the theory of GATT that you
are not involved in a subsidy if all you are dohig
is compensating for the internal taxation sys-
tem. The theoiy of GATT is that all indirect
taxes are passed forward and no direct taxes are
passed forward. It's an economic theory that I
tliink a good many economists would question
todaj-, but that's the— I tliink I'm right, Bill,
am I not ?

Mr. Roth: Yes.

Mr. Katzenhach: That's the basis for it.

JANXTAEY 29, 1968

141

Q. Mr. Secretary, on the relation of Viet-
Nam —

Q. Mr. Secretary, on the specific measures
which the Japanese Government are going to
take in order to assist the dollar specifically, do
they agree with you to purchase some of the
Treasury bonds, especially intermediate-term
Treasury ionds?

Mr. Rostmo: No. As I said before, this was
not a negotiating session, and we reached no
agreements on specific measures. The Japanese
Government did offer very fully to cooperate
■with the United States Government and with
other governments in seeking solutions to this
common problem of the world economy through
measures that would be expanionist, if possible.
We discussed in a preluninary way various pro-
posals of financial cooperation which will come
up for action at Honolulu later this month, but
it made no — the Government of Japan made no
commitments ; nor did I seek any commitments
with respect to its purchase of bonds at this
time.

Viet-Nam and the Balance-of-Payments Problem

Q. Mr. Secretary, you said before that we
wo^dd still have a balance-of-payments prob-
lem even if we didn't have Viet-Nam. Could you
give us your judgjnent of the effect that Viet-
Nam has had upon this problem?

Mr. Katzenbach : I think that as far as I could
make out from the figures — and Mr. Demmg
can correct me if I'm wrong about this — that we
probably have, overall, a balance-of-payments
deficit on Viet-Nam of perhaps a billion and a
half and we have overall within the NATO area
a deficit to the extent not offset of about a billion
and a half. That's roughly right.

The increase in 1967 of our balance-of-
payments costs on Viet-Nam ran about $500 mil-
lion, whereas the increase in our deficit ran— two
and a half ?

Mr. Deming : Two billion or more.

Mr. Katzenbach : Two billion plus.

Mr. Deming: Those are essentially right.
To put it in a little different way, the overall
deficit this year will be between three and a half
and four billion. The Viet-Nam deficit would be
less than half of that, a billion and a half out
of the total. So either on a straight military ac-
count or on an overall account, you could not

attribute the American deficit in 1967 to
Viet-Nam.

Q. It would account then for 30 or Ifi percent
of the total, is that right?

Mr. Deming: Yes, but you can't really account
for it. We've got pluses in some areas and
minuses in other areas. What Mr. Katzenbach
was saying, which I thoroughly agree to, is if
you eliminate Viet-Nam, you would still have
a deficit in the balance of payments, and a
substantial one.

Mr. Katzenbach: A substantial one.

Q. But a 30 percent less problem, roughly
speahing.

Mr. Deming: Perhaps.

Q. But some of the NATO area deficit is due
to the Viet-Nam tvar, isn't it?

Mr. Deming: No.

Q. Surely — because Europe is selling us goods
which ive would otherwise manufacture our-
selves if our own manufacturers weren't busy
supplying the war, is that correct?

Mr. Katzenbach: I don't think so, no.

Q. Did you say one and a lialf billion for the
NATO area — one and a half billion?

Mr. Katzenbach: I think, roughly, yes.

Q. For the NATO area the same figure?

Mr. Deming : It's roughly one and a half bil-
lion for all the rest of the world outside of Viet-
Nam, most of wliich is in the NATO area.

Q. Last summer at a press conference. Secre-
tary Fowler said that without Viet-Nam there
would be no trouble. Has the situation deteri-
orated since?

Mr. Katzenbach: Yes. The situation deteri-
orated considerably in 1967, especially in the
last quarter of 1967.

Q. Mr. Katzenbach, did you get any inquiries
about the Joint Export Association that the
President referred to in his remarks — in his
message or statement — especially if this would
be an American cartel arrangement?

Mr. Katzenbach: No, I had no — it never
came up in the discussion.

Q. Thanh you, Mr. Secretary.

142

DEPARTMENT OF STATE BULLETIN

Development Aid: the National
Interest and International Stability

Following are excerpts from an address made
ty William S. Gattd, Administrator of the
Agency for International Development, hefore
the Economic Club of Detroit at Detroit, Mich.,
071 December 4.

I propose to talk to you today not about for-
eign aid in general, nor about military assist-
ance, but about that part of our foreign aid
program which is designed to promote eco-
nomic and social development in the emerging
nations. And let me make no bones about it:
I want to enlist your active support for this
part of our program. Foreign aid today badly
needs domestic help.

"When the Congress passes a foreign aid ap-
propriation bill for this fiscal year, there is
every likelihood that it will be the smallest aid
liill ever.^ In the opinion of the President, in
the opinion of the Secretary of State and in
my own opinion it will be too small to serve
our interests adequately. For example:

— "We will have to reduce sharply our pro-
grams in India, in Pakistan, and in Africa.

— We will not be able to carry out our part of
the plans made last spring at the Punta del Este
conference to increase efforts in agriculture,
education, and health under the Alliance for
Progress.

— We will have to shortchange our security-
oriented and military aid programs in East
Asia and elsewhere.

The decline in the fortunes of foreign aid is
not a phenomenon which has come upon us over-
night. President George Woods of the World
Bank has repeatedly stated that the needs of
the developing world for outside assistance are
not })eing met. Yet, while our gross national
product has increased nearly 150 percent over
the past 15 years, the share of our gross na-
tional product which we are devoting to foreign
aid has shrunk by roughly 50 percent. In short,

'The .$2.29.5,635,000 economic and military a.s.sist-
anee bill cleared by Congress on Dec. 15 was .$9.30,-
785,000 below the administration reque.st and
$407,706,750 under the previous low appropriation.
[Footnote furni.shed by author.]

as we have been able to afford more, we have
done less.

There is a tendency to blame the difficulties
of foreign aid on the Congress. Or, if one looks
beyond the Congress, to blame them on Viet-
Nam, summer violence in our cities, the budget
deficit, the tax bill, or our balance-of -payments
situation.

These are easy explanations, but I think the
real explanation lies elsewhere. In my view, it
lies with the American people. Too few Ameri-
cans understand the purposes of the foreign aid
program and how it serves their interests. Too
many are asking : Wliat has this got to do with
us? How does this help the United States? Why
should we have foreign aid?

Our interests in the world, as well as the ob-
jectives of our aid program, have changed
gi-eatly since the days of the Marshall Plan
and also since the early days of the cold war
when our aid program was preponderantly
security-oriented and extended military assist-
ance. Many people fail to recognize these differ-
ences. They judge the new by the standards of
the old. As a result, they often expect the wrong
things from today's aid program and are dis-
satisfied when their expectations are not real-
ized.

The earlier programs, which helped to re-
build Europe and which built up the defenses
of Greece, Turkey, Taiwan, and Korea, had
deep f eai-s behind them : fear for the future of
the Western alliance, fear of Communist ag-
gression, fear that the cold war would go
against us. The Western alliance was designed
to contain the causes of our fear. The aid pro-
grams which supported that alliance clearly
served the national interest. The connection be-
tween our assistance progi'am and our interests
abroad was crystal clear.

Today, many of the fears of the early cold
war have waned, and the tie between our for-
eign aid and our foreign policy is more com-
plex.

There is a second key difference between for-
eign aid 20 years ago and today. It is in our
relations with the nations which receive our
assistance. In the aftermath of the war, much
of our aid program was an extension of war-
time relations with intimate allies. Aid went
largely to old friends, to nations with whom
Americans felt strong common bonds. In 1948,

JANTJART 29, 196S

143

when Senator Vandenberg introduced the Eu-
ropean Recovery Program in the Senate, he
pointed out that Europe was "the stock which
has largely made America." As he put it, the
Marshall Plan was essential because "Western
civilization" depended on European inde-
pendence.

Today, outside Latin America, the nations re-
ceiving development aid from the United States
are not, by and large, this coimtry's old friends.
They are our new neighbors. Many are new to
nationhood. They have emerged from the wave
of decolonization which, since the war, has more
than doubled the number of sovereign states. In
the past most of their people had little to do with
the United States. Our present relations with
them lack the historical ties and political and
military intimacy that supported the Western
alliance after the war. In short., where fear for
our security helped to motivate aid, we are now
less afraid. Where we gave aid to old friends, we
now help new nations. "Wliere aid supported key
alliances, it is now extended outside the old de-
fense framework.

These differences are gromided in changes in
the world and in changes in our interests in the
world. The focus of United States foreign policy
has widened since the years immediately fol-
lowing World War II. The challenges to that
policy have also changed. But today's challenges
are no less real, no less compelling, than the chal-
lenge of 15 and 20 years ago.

The dominant interest of the nations of moi'e
than half the free world has switched in recent
years from traditional political goals to devel-
opment. National progress now overshadows all
other goals in the less developed world. This
drive for national progress has become a para-
mount fact of world affairs. Nothing is more
characteristic of the world today, nothing will
do more to shape the world tomorrow, than the
determination of the new nations to realize
goals which are still far beyond their reach.

How can a strong program to assist develop-
ment serve our national interests in today's
world?

First, let me say that Americans should dis-
abuse themselves of the notion that the purpose
of such a program is to win friends, earn grati-
tude, or gain votes in the United Nations.
Development aid is a poor tool for the attain-
ment of any of these goals. Development aid
serves our foreign policy in ways which go far
beyond these.

The critical fact for our relations with the

developing nations is that their new goals are
beyond their reach. They cannot attain them
alone. They need help, and they look to us
and other developed nations to provide it.

To conduct meaningful relations with the
backward half of the world, the United States
must recognize the urgency of its need for
progress. As a major power, we have the
strength to force our way on issues that con-
cern us. But political relations involve more
than the threat of force; our own sensibilities
tend to curb the use of force. So long as national
progress is the overwhelming concern of the
new nations, we must work with them to achieve
their goals. Our aid programs offer a way to
meet both our national uiterests in the world
and the aspirations of the developing nations.

Foreign aid is also right. As citizens of the
richest and most powerful nation on earth, it
would be wrong for us to shrug our shoulders
at the conditions in which the people of the
developing countries now live.

Finally, development is necessary for the
achievement of a stable peace. The underdevel-
oped nations are dependent and vulnerable;
their wealuiess leads to instability in the world ;
their increased independence can help to keep
the peace. Aid for development will not guar-
antee stability or peace. But when we neglect
development, we invite instability and collisions
between nations.

In neglecting development, we also encour-
age unrest, racism, and hostility within the
new nations. The target, inevitably, is the de-
veloped half of the world. "Wlien we neglect
development, we jeopardize the possibility of
peace.

In half the world, there is tremendous and
unprecedented pressure for development. There
has never been anytliing like it. We do not have
pat solutions to all the problems this pressure
raises. Indeed, the main response must come
from the emerging iiations themselves. But we
can play an important role, and we have al-
ready done so. We have made key contributions
to development success in some countries, and
we have promising work imderway in many
others. Development aid does work.

Development aid does not meet all the for-
eign policy objectives of the United States.
Indeed, day to day, our assistance efforts can
raise problems while we are meeting problems
that run from decade to decade.

But for the rest of this century, the phenom-
ena of development will be a large part of the

144

DEPARTMENT OF STATE BULLETIN

raw material of Aniprican forpijn^ relations.
This is certain. "We must accept it. It means
that foreifrn aid for development will be in-
tesfral to our foreign policj' and essential to our
interests.

Twenty years ago, when tlie war ended, tlie
United States did not enter the world in order
to police it or to expand our influence or even
to play Santa Claus and give away our share.
The new compactness of the world put us in
the world and has kept us in it. There is no
getting out. Our size and wealth endow us with
a large role on this planet. We cannot hide
from our own dimensions and power.

These, it seems to me, are facts of life, just
as the drive for development is a fact of life.
Are we now to ignore tliese facts, turn our backs
on the world, and tell other nations to solve
their problems without our help? Could we do
this even if we wished? Do we care about in-
ternational stability, about peace, about the
kind of world we will leave to our children?

These questions answer themselves. The
choice is clear. It lies between investing in in-
ternational stability and surrendering to the
frustrations of living in a difficult and imper-
fect world.

U.S. Replies to Soviet Charges
of Damage to Ship at Haiphong

Press release 4 dated January G

Following is the text of a United States Gov-
ernment note handed to the Soviet Ambassador
on January 5.

The Government of the United States of
America refers to the note of the Government
of the Union of Soviet Socialist Kepublics
dated January 4, 1968, which alleges that the
Sovdet motor vessel "Pereyaslavl-Zalesskdy"
was damaged on January 4 by a bomb explosion
during the course of an attack hy United States
aircraft on the port of Haiphong.

Initial investigation by United States au-
thorities of the chai'ges contained in the Soviet
note has neither substantiated nor ruled out the
Soviet claim that anj- damage inflicted on the
"Pereyaslavl-Zalesskiy"' was caused by ord-
nance from United States aircraft.

If any damage to international shipping in

the Haiphong area was produced by ordnance
dropped by United States aircraft, it was in-
advertent and is regi'etted by the United States
Government, which will continue to take care-
ful precautions to avoid damage to non-hostile
shipping. Unfortmiately, it is impossible to
eliminate completely the risk that foreign ves-
sels entering or remaining in an area of active
hostilities may sustain unintentional damage as
a result of actions by one or the other side.

Xevertheless, the Soviet Government may
be assured that United States authorities will
continue to make every effort to avoid recur-
rence of such incidents.

Implementation of Katzenbach Report

Press release 307 dated December 29

The Katzenbach Committee recommended
that no Federal agency provide any covert fi-
nancial assistance of support, direct or indirect,
to any of the Nation's educational or private
voluntai-y organizations.^ "Where such support
had been given, the committee said that it should
be tenninated as quickly as possible, without
destroying valuable private organizations be-
fore they could seek new means of support.. The
committee envisaged that the process of termi-
nation could be largely — perhaps entirely —
completed by December 31, 1967.

In fact, this target has been met; covert fi-
nancial support will in every instance be dis-
continued prior to December 31, 1967. At the
time of termination of support, some of the or-
ganizations received contributions to tide them
over the period required to develop new sources
of funds. xVlso, as recommended by the Katzen-
bach Committee, the Government is continu-
ing to study j^ossibilities for providing public
funds openly for the overseas activities of or-
ganizations which are adjudged deserving, in
the national interest, of public support.

The particular organizations wliich have re-
ceived covert fuiancial support in the past are
not being identified because to do so would not
be in the national interest and might jeopard-
ize their chances of developing new means of
support.

' For text of the committee'.s report, see Bulletin
of Apr. 2-t, 1967, p. 665.

JAXUART 2 9, 1968

287-157— 68 3

145

U.S.-Philippine Committee Holds Talks on Future Economic Relations

The Philippines and United States Joint
Preparatory Committee for Discussion of Con-
cepts Underlying a Neio Instrument To Replace
the Laurel-Langley Trade Agreement ^ met at
Manila and Baguio City, the Philippines, No-
vember 20-30, 1967. Following is the text of the
Committee's report, which was made public at
Manila and Washington on January 6.

Press release 3 dated January 6

TEXT OF REPORT

Introduction

In accordance with the agreement contained
in the Joint Communique issued by President
Marcos and President Jolinson following talks
in Washington, D. C, September 14 and 15,
1966,^ intergovernmental discussions were held
in the Philippines from November 20-30, 1967
on the concepts underlying a new instrument
to replace the Laurel-Langley Agreement after
its scheduled expiration in 1974.

These discussions were carried on by a Philip-
pine panel designated by President Marcos and
a United States team designated by President
Johnson.

The Philippine panel was composed of : Cesar
Virata, Undersecretary of Industry, as Chair-
man; Wilfredo Vega, Acting Assistant Secre-
tary of Economic Affairs, Department of
Foreign Affairs, as Vice-Chairman ; Montano
Tejam, Tariff Commissioner; Bernardmo Ban-
tegui, Director of Statistical Coordination,
National Economic Council; Efren I. Plana,
Assistant Chief Legal Counsel, Department of
Justice; Ricardo M. Tan, Technical Assistant,
Central Bank; and Antonio Ayala, Attache,
Philippine Embassy, Washington, D. C., as

Members ; and Jose Ira Plana, Executive Officer
for Legal Affairs ; Pacifico Castro, Special As-
sistant of the Undersecretary for Policy ; both
of the Department of Foreign Affairs ; Urbano
Zafra, Executive Director, Technical Staff, De-
partment of Commerce and Industry; Felipe
Mabilangan, Jr., Second Secretary, Pliilippine
Mission to the United Nations, Geneva ; Tomas
Toledo, Chief of Assessment Department, Bu-
reau of Internal Revenue; Ramon Katigbak,
Special Assistant to the Director General, Pres-
idential Economic Staff'; as Ad^^sers.

The United States team was composed of
Eugene M. Braderman, Deputy Assistant Sec-
retary of State, Chairman ; ^ Eugene J. Kaplan,
Director, Far Eastern Division, Bureau of In-
ternational Commerce, Department of Com-
merce; C. Hoyt Price, Pliilippine Country
Director, Department of State ; George H. Aid-
rich, Assistant Legal Adviser, Department of
State; and Dawson S. Wilson, International
Economist, Philippine Affairs, Department of
State. The supporting staff for the United
States team was composed of William E.
Knight, Counselor for Economic Affairs, Ed-
ward G. Misey, Legal Adviser, and William S.
Diedrich, Second Secretary, of the United
States Embassy in Manila.

The following are the Committee's findings
and recommendations as a result of these
discussions :

I. General Observations

1. The subject of economic relations between
the Philippines and the United States is one of
major importance and one which has many
ramifications.

2. It is agreed that an expansion and diversi-
fication of trade between the Philippines and
the United States would contribute to the at-

' For text of the agreement, see Bulletin of Sept. 19,
19.0.5, p. 463.

' For text of the communique, see ibid., Oct. 11, 1966,
p. 531.

' For a statement by Mr. Braderman at the opening
session of the meeting on Nov. 20, 1967, see iiid., Jan. 1,
1968, p. 11.

146

DEPARTMENT OF STATE BITLLETIK

tainmcnt of development goals. (See Appendix
I on the investment and foreign exchange re-
quirements of the current Philippine plan.)

3. It is recognized that Filipino-American
economic relations are burdened unnecessarily
with certain pending questions which should be
resolved to the satisfaction of both countries.

4. There is manifested in both countries a
fund of goodwill, mutual respect, sincerity of
purpose and sense of responsibility in resolving
these pending economic issues, as well as a seri-
ous concern for the future of their economic
relations, whicli the people of both countries
value and seek to strengthen and expand in
ways which satisfy their national aspirations.
There is a consensus favoring the exploration
and pursuit of new opportimities for coopera-
tion between the two coimtries, consistent with
such aspirations and goals.

5. Filipino-American economic collaboration
should be responsive to the needs of the Philip-
pines and the United States and, at the same
time, should be consistent with developments
in the international commimity.

6. There are many views shared in common,
but there still remain a number of important
issues to be resolved.

II. Trade Relations
A. General

7. The United States team asked whether the
Philippines desired to continue a special trade
relationship with the United States. The Phil-
ippine panel stated that, while recognizing that
the primary responsibility for Philippine eco-
nomic development and trade expansion rests
with the Philippines, it believes that a preferen-
tial trade relationship with the United States
on a non-reciprocal basis will be advantageous
to tlie Philijipines and will not be inimical to its
national interest. In fact, the Philippine panel
conveyed the view of the Philippine Govern-
ment that such preferential treatment for Phil-
ippine articles in the U. S. market should be
continued beyond 1974 even if, as it hopes, a
system of non-reciprocal temporary generalized
preferences by all developed countries for all
developing countries is established. The Philip-
pine panel stated that such arrangements would
provide the Philippines a further, needed oppor-
tunity to expand its exports and thereby to
develop more rapidly its economy, as contem-
plated by both governments at the time the

Laurel-Langley Agreement and the Bell Trade
Act * were concluded.

8. The Philippine panel stated that Philip-
pine exporters have not been able to utilize fully
the trade preferences accorded by the Laurel-
Langley Agreement because of a number of
factors, the most important of which has been
inadequate financial resources, aggravated by
the orientation of domestic capital to invest in
real estate ventures and import substitution in-
dustries ; another factor has been limited prod-
uct diversification. Only in the last few years
have these preferences been availed of, and dur-
ing this i^eriod the margins of preference have
been diminishing. The Philippine panel ex-
pressed the view that the twenty-year period
of diminishing preferences provided by the
Laurel-Langley Agreement as a reasonable
period of adjustment now appears too brief.

9. The United States team stated that, be-
cause the Government of the Philippines had
raised many tariff rates and had, over extended
periods, established non-tariff barriers which
have affected U.S. articles, it was the general
feeling in the United States tliat the trade bene-
fits granted U.S. articles under the terms of the
Laui-el-Langley Agreement had in the main
been nullified; the reciprocity originally in-
tended had not been obtained. Thus, the ques-
tion remained as to how these difficulties could
be resolved in the context of a new agreement.

10. The Philippine panel, noting that the ten
percent margin of tariff preference currently
accorded U.S. articles in the Philippine market
by virtue of the Laurel-Langley Agreement is
no longer of significant value to U.S. exporters,
proposed that the United States relinquish such
preference. The United States team stated that
this question could only be considered within
the context of a satisfactory new agreement.

11. The two groups noted that both govern-
ments were prepared to support the establish-
ment of a system of generalized preferences,
under the terms of which all developed coun-
tries, with certain safeguards, would grant
temporary, non-reciprocal, generalized tariff
preferences to imports of raw materials, semi-
processed and processed goods, and semi-manu-
factured and manufactured goods from the
developmg countries. This question will be con-
sidered at the forthcoming United Nations
Conference on Trade and Development
(UNCTAD). The Philippine panel urged, and

' Public Law 371, 79th Congress.

JANUARY 2 9, 1968

147

the U.S. Team agreed to recommend that, under
such a system, important Philippine exports be
assured continued entry into the U.S. market.

12. Without prejudice to the Philippine posi-
tion stated in paragraph 13 below, the two
groups agreed that, with respect to the entry
of Philippine articles into the U.S. market, any
general system of preferences should be modi-
fied by the preferences provided until 1974
under the Laurel-Langley Agreement. Such
modification would ensure that these articles
obtain a larger margin of preference than that
granted to other developing countries in the
United States market.

13. The Philippine panel stated that the gen-
eralized preference scheme shoidd include the
following additional elements: (a) a system of
enlarged preference treatment for Philippine
exports in the U.S. market for a ten-year period
extending beyond 1974; (b) ensuring at least
equivalent advantages to developing coimtries
enjoying preference in certain developed coun-
tries which will share their preferred position
with other developing countries; (c) a mecha-
nism for the continuing automatic redress of
any adverse situation created for any develop-
ing country enjoying existing preferences
which may suffer in its fonner protected market
as a result of the institution and operation of
the generalized system of preferences; and (d)
the cooperation of the developed countries in
not reducing their aid to the developing coun-
tries as a result of the generalized system of
preferences, or otherwise nullifying or impair-
ing the benefits of the system.

14. The United States team noted that such a
proposal for enlarged preferential treatment
raises questions as to how such special prefer-
ences could be justified to other friendly de-
veloping countries. It noted further that the
United States is seeking the phasing out by all
countries of existing special prefei-ential tariff
systems, and Philippine proposals to extend
the period of preferential treatment for Philip-
pine articles beyond 1974 would seriously
undercut its effort to achieve the phasing out of
discriminatory trade preferences extended by
other developed countries.

15. In the event that efforts to create a gen-
eralized system of preferences fail, the two
groups will be prepared at that time to explore
and examine further future United States and

Philippine trade relationships. The Philippine
panel stated its hope that this relationship could
be based on non-reciprocal preferences for
Philippine articles. The United States Team
indicated that it could not at this time take a
position on this question.

16. In the meantime, it was agreed that there
should be continuing consultation and full ex-
change of information between the two Govern-
ments on these matters, through the American
Embassy in Manila and the Philippine Em-
bassy in Washington and later at the UNCTAD
meeting in New Delhi.

B. Specifi-c

17. Sugar — The Philippine panel said that,
on a basis separate from tlie general preference
scheme, the Philippine Government was seek-
ing arrangements within the context of a new
agreement for ten years beyond 1974 which
woidd provide for Philippine exports of sugar
to the U.S. :

a) a new higher floor of 1,126,000 short tons
as the basic annual quota;

b) assurance of a share in the growth of the
U.S. market amounting to no less than the
current 10.86% participation;

c) assurance of participation in any pro-
ration of deficits ; and

d) maintenance of the same price system for
sugar.

The United States team noted that any pro-
posal calling for continuation or expansion of
the special IJ.S.-Philippine agreement on sugar
beyond 1974 entailed special difhculties particu-
larly in view of the manner m which the sugar
allocations are decided upon by the United
States Government. Nevertheless, the U.S. team
agreed that consideration would be given to this
proposal within the context of a new agreement.

18. Coconut Oil, Inedible Talloxo^ Soy Beans,
and Liiiseed Oil — The Philippine panel said
that Philippine coconut oil is estimated to be
competitive with that of other foreign suppliers
ui the U.S. market and would consider re-
linquishing the preferential Pliilippine exemp-
tion from the processing tax if the U.S. 1-ceut
duty per pound were completely removed at the
same time and if coconut oil is included in the
generalized scheme, and not in the exemption

148

DEPARTMENT OF STATE BULLETIN

list. Thp T'nited Stutcw teiun undertook to con-
sider tills ([uestion ;ind to conunent further on
the proposal independently of the new agree-
ment. The United States team inquired whether
the Government of the I'hiiippines had con-
sidered lowering its <luties on inedible tallow,
so_y beans, and linseed oil. The Philippine panel
undertooiv to consider this question and to
conunent further on the proposal independ-
ently of the new agreement.

19. The Philippine panel proposed that, if
a generalized system of preferences does not
come into effect. United States tariff rates on
Philippine wood and otiier products be reduced
so that reductions made during the Kemiedy
Round with respect to similar products from
other countries would also be accorded Philip-
pine products. The United States team took
note of this proposal.

20. American Products — The United States
team noted tliat the following types of actions
taken h\ the Philippines tended to nullify bene-
fits granted American exportere under the
Laurel-Langley Agreement :

a) Successive tariff increases have been in-
troduced since 1955;

b) Non-tariff barriers, for tobacco and rem-
nants in particular, have cut sharply into tra-
ditional U.S. exports to the Philipi^ines;

c) Customs administration, particularly
with regard to documentation requirements,
has been so cumbersome and burdensome as to
discourage many existing and potential U.S.
exports to the Philippines; and

d) American businessmen have encountered
visa and residence pennit difficulties notwith-
standing the treaty-trader guarantees of the
Laurel-Langley Agreement.

The United States team noted that the appli-
cable provisions of the Laurel-Langley Agree-
ment had not proWded an effective mechanism
for expeditiously resolving trade problems. The
two groups agreed that any new trade agree-
f' ment shoidd provide an orderly and effective
mechanism for expeditiously resolving trade
problems. The United States team, m response
to a request by the Pliilippine panel, presented
a statement (Appendix II) concerning certain
specific actions by the Philippines that had
adversely affected U.S. exj^orters. The com-

ments of the Philippine panel on these issues
are contained in Appendix III.

21. The Philippine panel informed the
United States team that the Philippines, to-
gether with Indonesia, Thailand, Malaysia, and
Singapore are moving toward the creation of
a free trade area. The United States team indi-
cated that it would recommend the inclusion
in any future agreement of a waiver of most-
favored-nation rights with respect to a free
trade area that meets the requirements of the
General Ao-reement on Tariff's and Trade.

ill. Investment Concepts

A. PKili'pfine Investment Goals
and Hotv They Can Be Met

22. The two groups agreed that the trade and
in\'estment goals of the Philippines are closely
I'elated. The Philippine Panel stated that for-
eign exchange earnings, from increased trade,
as well as investment and other sources, will be
needed to support the Philippine economic de-
velopment program. The aim of this program
is the overall development of the natural re-
sources and industry of the Philippines. The
Govei'nment's immediate efforts will be concen-
trated on increasing food production, making
greater public investment in infrastructure for
which increased tax revenues will be needed, and
examining existing laws to determine what re-
visions may be desirable.

23. The Philippine Panel pointed out that the
foreign exchange needs of the current develop-
ment program are great. It is anticipated that,
in addition to export earnings, these needs will
be met from the following sources: (a) supplier
credits, (b) development loans, (c) direct in-
vestment, (d) Japanese reparations payments,
(e) payments from the Special Fund for Edu-
cation, (f) veterans payments, and (g) grants
from friendly countries. The Philippine Panel
indicated that substantial foreign investment
will be required if sufficient foreign exchange
for the economic development program is to be
obtained.

24. Both groups agreed that only the Govern-
ment of the Philippines can decide the extent
to which it desires foreign investment and the
inducements it is prepared to offer. The Philip-
pine Panel stated that the Philippines needs and

JANtJART 29, 1968

149

desires substantial foreign investment, particu-
larly in selected areas, but it stressed that for-
eign investment is welcome especially on a joint
venture basis as a means of supplementing Fili-
pino capital. The Philippines is determined to
give fair and equitable treatment to existing
investment and to assure such treatment to
future investment.

25. The United States team outlined the ad-
vantages it believes can result from foreign
investment and stated its view that foreign
capital, which has many alternative opportuni-
ties, will not come to the Philippines in any
significant amount unless the investment climate
in the Philippines is one in which it is clearly
welcome. It set forth examples of the legisla-
tive, administrative, and judicial actions of
Philippine Government agencies which have
had the effect in a number of cases of making
investors feel not welcome in the Philippines.

The Philippine Panel replied that foreign
firms, who may have felt unwelcome during the
period that the Philippine Government was in
the process of determining its foreign and do-
mestic investment policy, were tlie exception
rather than the rule, and these firms were gener-
ally in areas where their financial, tecluiological
and marketing advantages prevented any local
firm from entering the field or remaining com-
petitive. As a matter of fact, foreign investment
is welcome in the Philippines and the new In-
vestment Incentives Law encourages, with vari-
ous incentives such as income tax and tariif
exemptions, foreign investment in pioneer areas
of investment.

26. The United States team noted that the
general practice in most of the world has been
for countries, on a basis of reciprocity, to accord
foreigii investment in most fields of activity
treatment equal to that accorded local invest-
ment. In the agreements providing for national
treatment certain areas of investment are usu-
ally excluded to meet the interests of either gov-
ernment, but the general rule for other areas is
tliat of equal treatment for the nationals of
both countries. Both groups agi-eed that recipro-
cal national treatment should be included to the
maximum extent possible in any future agree-
ment on economic relations between the two
countries, and the Philippine Panel stated that
it would give further consideration to this ques-
tion with a view to determining the extent to
which exceptions to national treatment would

be required by the Philippines. With the excep-
tion of certain areas, such as natural resources,
public utilities, and retail trade, where most
favored nation treatment should be accorded,
the two groups believe that a provision accord-
ing national treatment can be worked out.

B. The Investment Incentives Law

27. The Philippine Panel stated that the new
Investment Incentives Law is a central feature
of the Philippine private mvestment jjrogram,
both domestic and foreign. After describing the
economic planning machinery and the incen-
tives provided by the law, the Philippine Panel
pointed out that, in non-pioneer areas, if a cor-
poration wished to avail itself of the incentives,
it would normally have to have sixty percent
Pliilippine ownership of the voting equity in-
terest and sixty percent Philippine membersliip
on the board of directors. The Philippine Panel
noted, however, that foreign investors could, in
fact, provide more than forty percent of the
investment funds and reap more than forty
percent of the profits through such arrange-
ments as non-voting shares or bonds. Manage-
ment contracts would also generally be possible
where the companies concerned deemed them
desirable.

28. The Philippine Panel stated its view that
United States citizens and United States cor-
porations would not be entitled, by virtue of
Article VII of the Laurel-Langley Agreement,
to enjoy the same advantages under the Invest-
ment Incentives Law as Philippine citizens and
corporations. In the view of the Philippine
Panel the non-discrimination requirement of
that article entitles U.S. citizens and corpora-
tions controlled by U.S. citizens to national
treatment except with respect to special tax
benefits. Under this view, for example, corpora-
tions controlled by U.S. citizens that wish to
enter a preferred area without benefit of incen-
tives could do so at any time, whereas corpora-
tions controlled by citizens of third countries
would have to observe the three year waiting
period contained in Section 20 of the Act. On
the other hand, corporations controlled by U.S.
citizens would not be entitled to equal treatment
with Philippine controlled corporations with re-
spect to oljtaining the tax benefits provided for
by the Act. The United States team disagreed
with this view and stated its opinion that dis-
crimination between United States and Philip-

150

DEPARTMENT OF STATE BULLETIN

iU

pine nationals and corporations with respect to
tax benefits would be discrimination prohibited
hv Article VII of the Laurel -Langley Agree-
ment. It was agreed tliat further consideration
would be given to this issue.

C. Problems of Eoeisting U.S. Investment in
the Philippines

29. Aside from any difficulties that could be
caused U.S. investore by decisions concerning
national treatment and the implementation of
the Investment Incentives Law, the two groups
agreed that particular care should be taken to
ensure fair and equitable treatment to existing
U.S. investment in the so-called parity field,
i.e., natural resources and public utilities.
Rights accorded in this field to U.S. enterprises
by Article \T of the Laurel-Langley Agree-
ment and the Parity Ordinance of the Philip-
pine Constitution will expire on July 4, 1974,
unless terminated earlier by mutual agreement,
and many transitional problems are emerging.
The Philippine Panel stated that the Philip-
pine Government is aware of these problems
and has taken some actions and will take others
before 1974 to facilitate this transition.

30. It was agreed that U.S. investment made
prior to July 4, 1946 raises few problems in
view of the fact that Article XVII (1) of the
Philippine Constitution protects the full en-
joyment of property rights, which would in-
clude leases and franchises in the parity area,
acquired prior to that date. Thus, such leases
and franchises would continue valid through-
out their term.

31. With respect to real estate, leases, and
franchises acquired subsequent to July 4, 1946,
the situation is more complex. The Philippine
Panel stated the view that leases of private
agricultural land would remain valid tlirough-
out their term but that development, exploita-
tion, and utilization of natural resources and
operation of public utilities by U.S. nationals
and by corporations less than sixty percent
Philippine owned must cease on July 4, 1974.
The United States team welcomed the state-
ment concerning leases of private agricultural
land. With respect to natural resources and
public utilities, the United States team stressed
its concern that the view of the Philippine
Panel, if carried forward by the Philippine
Government, would give rise to serious differ-

ences between the two governments, unfore-
seen difficulties for U.S. investors, and serious
economic dislocations. The two groups agreed
that settlement of these problems requires the
resolution of legal issues. They agreed that
both governments should take whatever meas-
ures may be appropriate to facilitate such
resolution at an early date through judicial
process, perhaps by means of declaratory
judgment.

32. With respect to ownership of private
agricultural land acquired by U.S. citizens
or corporations subsequent to July 4, 1946, the
United States team expressed the view that,
under the terms of the Philippine Constitu-
tion, such ownership would not be affected by
the termination of parity rights in 1974. A more
detailed exposition of the views of the United
States team on this question is contained in
the memorandum in Appendix IV. The Phil-
ippine Panel expressed the view that such
ownership would not continue beyond 1974 but
undertook to consider the memorandum of the
United States team.

33. The Philippine Panel emphasized its
view that tennination of parity rights at the
earliest possible date prior to 1974 would be in
the best interests of both countries. The United
States team stated that only in the context of
a satisfactory new agi'eement could the United
States Government seriously consider includ-
ing a provision terminating new rights of ac-
cess in the parity field.

34. The United States team stated that un-
intended and undesirable difficulties have oc-
casionally been caused U.S. public stock cor-
porations in the Philippines by requirements
to prove certain percentages of U.S. citizen
ownership or reciprocity with the particular
states within the United States of which the
shareholders are residents. The two groups
agreed that any new agreement should contain
appropriate provisions to eliminate or mini-
mize this problem in the future.

IV. Form of Possible Agreemenf

35. The two groups examined typical pro-
visions of a Friendship, Commerce, and Navi-
gation Treaty and discussed the principles of
national treatment and most favored nation
treatment on which such a treaty is generally
based.

JANUARY 29. 1968

151

36. The two groups agreed that, if the prin-
cipal substantive issues were resolved satis-
factorily, the new treaty instrument should
be modeled along the lines of an FCN treaty,
modified appropriately to include whatever
provisions may be agreed upon concerning
trade preferences, investment and related
matters.

37. Both groups recognized that any new
instrument would require action by the respec-
tive legislatures of both Governments to be-
come effective.

V. Other Matters

38. The Philippine Panel indicated its de-
sire to raise certain other questions which it con-
sidered important to its future economic de-
velopment. The U.S. team said it was not
authorized to discuss such issues, but suggested
that they be taken up through diplomatic
channels.

VI. Procedures

39. The Joint Committee should be regarded
as a continuing consultative body. If the re-
maining substantive issues are not resolved by
other means, the Committee should be recon-
vened at tlie earliest practicable date, hope-
fully in April or May 1968, for tlie purpose of
resolving them and thereby making possible
the negotiation of a new instrument to replace
the Laurel-Langley Agreement.

40. In that event, negotiations, if desirable,
could follow shortly thereafter.

Eugene M. Braderman

Chairman.

United States Team

November 30, 1967

Cesar Virata

Chairman.
Phil i p pine Panel

TEXTS OF APPENDIXES

Appendix I

A Note oi^f the Investment and Foreign Exchange
Requirements of the Current Philippine Plan

Targets. The current Plan covers the period fiscal
1967 to fiscal 1970, and has entered its second year. A
printed summary, published September 1966, is now
being revised, mainly because very recent improvements
in the estimation of national accounts have enabled a
more realistic estimate to be made of the investment
required to support the program. Since the revision is
still in progress, the figures in this note must be re-
garded as tentative. The basic objective of the cur-
rent Plan is to increase income per head by about 2.5
per cent annually. This means that gross national prod-
uct must increase at the fast average of 6.1 per cent
annually over the four years of the Plan : The target
growth rates increase progressively from 5.8 per cent
the first year to 6.3 per cent in the fourth year.

Attaining growth targets as high as these means
heavy costs in terms both of investment and imports.
The average rate of savings, already a high 19.8 per
cent of income in fiscal 1967, is expected to increase
slightly to an average 20.3 i)er cent of gross national
product over the program period. But investment re-
quirements will be very large, both because the growth
targets are high and increasing, and because so much
of the investment must be in public worlis and manu-
facturing, both highly capital-intensive sectors. Sav-
ings are, therefore, expected to fall short of investment
by a total of P2.-1 billion over the Plan period. Though
imports of consumer goods are expected to remain
steady at an annual level of about P450 million, about
half of the capital goods and a substantial proportion
of industrial raw materials must still be imported, so
that the growth targets also imply a large increase in
imports. The rate of growth of exports, however, is
expected to drop slightly from the rate over the last
five years. (The initial impetus given to exports by ex-
change decontrol and by the temporary increase in
world market prices of sugar seems to have slackened
considerably ; and neither of these unusual circum-
stances is expected to recur during the Plan period.)
The balance of foreign trade is expected to be in deficit
by a total, over the four years of the Plan, of scjme
P3.3 billion.

The table below gives details :

Targets and Requirements of the Philippine Plan — Fiscal Years 1967-1970

(MiUion pesos at constant fiscal 1967 prwes)

1967 i 1963 1969 1970 Four

1. Gross National Product 23,391 24,752 26,294 27,948

2. Capital Account

Gross Investment 4,988 .5,444 6,168 6,617

Gross Savings 4628 4,985 5,492 5,705

Kesources Gap _360 -459 -676 -912

3. External Accoiuit

Exports 3 128 3,338 3,561 3,799

imports.... 3_70y 4 ^g^ 445Q 4575

Gross Foreign Trade Gap » -581 -726 -889 -1,076

^Preliminary estimate, based on partial data. [Footnote in original.]
Not including non-trade receipts. [Footnote in original.]

Year Total
102, 385

23, 217

20, 810

-2,407

13, 826
17, 098
-3,272

152

department of state bulletin

Itcsourrc KniuircmcnlK. The fisnrcs on avnilahle ro-
soiirces are siKuitlcant. Tlicy indicato that tlio foreign
exchange problem is ex'iieeted to be more serious over
the long term than the savings problem. A long term
projection indicates that althougli investment reqiiire-
ments. even for the ambitious development tiirgets just
stated, can Iv tinaneed entirely from domestic sources
after nine years, a trade gap will remain and will in
fact he the controlling factor. Even takinginto account,
be.sides the value of traditional exports projected on
the liasis of recent trends, and net additional foreign
exchange savings and earnings from new exports and
import substitution forthcoming from priority projects
li.sted in the I'lan. new exports not taken into accomit
by the Plan must still l>e raised in the amount of .f4(J0
million.

Hcmainrlcr of the Plan. The first year of the IMan has
IKissed, and an assessment of performance is still in
progress. For the remainder of the Plan i>eriod. over
the fiscal .years IDGJS to 1070, domestic .savings are
estimated to fall short of the investment required to
support the Plan's target by a total of P2,047 million or
$.j14 million.

Appendix II

Problems Excounteked by American Exporters
IN THE Philippines

The t'nited States team noted the following types of
problems encountered by American exporters in the
Philippine market, which tend to nullify the trade
benefits granted to the Iiuited States under the Lanrel-
Langley Agreement.

1. Philippine imjiort duties have been rai.sed sub-
stantially since ll).5-j.

2. In addition to an increase in tariff barriers, serious
non-tariff barriers have been imposed. Two illustrative
examples of these are the obstacles placed on the im-
port of American tobacco and remnants.

A. Tolacco — This problem originated in the early
lO.oO'.s when a program to develop the growing of
Virginia-type toliacco in the Philippines was l)egun.
Since that time, the Philippine Government has taken
various measures to reduce the importation of t'nited
States tobacco. Most recently, the Philii>pine Govern-
ment has required that a Philippine importer of United
States tobacco purcha.se and export four kilos of Philip-
pine-grown Virginia-type tobacco for each kilo of
llnited States tobacco he imports. This requirement has
greatly reduced fnited States tobacco exports to the
Philippines.

B. Remnants — Under normal conditions the United
States exjKirts .?20 million worth of textile remnants to
the I'hilippines annually. However, through a series
of decrees estalilishing unrealisticall.v high fixed values
for these remnants for the purpose of assessing
cu.stoms tax and duty, the Philii»pine Government has
in re<ent years greatly reduced the flow of United
States exiM)rt.s of the.se remnants to the Philippines.
The latest such dwree, that issued on .July 31, 1907,
sets values that are, for most categories of remnants,
ten times higher than their true values. Consequently,
tax and duty assessments for remnant shipments on
the basis of the July 31 decree are .so high as to render
uneionomic the acceptance of these remnants by the

Philippine importers who ordered them. As a result,
there are now large quantities of the.se remnants in
Philippine Customs custody, many of which were
shipped from the United States before the July 31
decree. Further United States exports have ceased.

3. The manner in which certain aspects of the
Philippine customs system have been administered has
also proven to be a barrier. Documentation require-
ments, particularly, are so cumbersome and liurdensome
as to discourage many existing and potential U.S. ex-
ports to the Philippines. These include: a) the require-
ment for a manufacturer's or supplier's Exiwrt Price
List (often completely unavailable) : b) the require-
ment that consular Invoices be certified at particular
I'hilippine Consulates (sometimes more than one)
which are often far from the point or points of ship-
ments; c) the requirement that air freight shipments
be certified before departure of the carrier ( in contrast
to the rule applied to surface shipments) ; and d)
special requirements for notarized declarations on
textile and remnants shipments. While these require-
ments may have been imposed on all other supplying
countries as well, the.v naturally are of the greatest
Imrden to the United States exports, given the volume
of these exports to the Philippines.

4. Despite the provision of Article V of the Agree-
ment providing for reciprocit.v in the treatment of one
another's businessmen. Philippine treatment of
American businessmen is non-reciprocal. A memo-
randum describing the problem in detail is attached.

November 2.S, 1967

AttachvieTit :

Memorandum — Visa Problems of American Businessmen.

Memorandum

Visa Problems of American Businessmen

Article V of the Uaurel-Langle.v treaty provides for
certain categories of American and Philippine bu.si-
nessmen to enter one another's territories as treaty
traders or treaty investors under reciprocal conditions.

However. Philippine vi.sas are issued to American
businessmen valid for a maximum of .59 days, after
which they are subject to various fees and charges
amounting to some $53 in the course of a year's time.
Filipino businessmen, under current American vi.sa
regulations, obtain visas gratis and pay no fees to the
Immigration and Naturalization Service for extensions
of their visas, which are grante<l almost without
question.

Additionally, Philippine administrative criteria such
as the limitation of issuance to top executive personnel
only and the diversion of requests for treaty trader
visas to that for pre-arranged employment visas have
at times been establishe<l for the issuance of Philippine
treaty trader and treaty investor visas, while a two
peso fee to finance a law library was added to fees for
all transactions of the Bureau of Immigration in 1964.
Moreover, all treaty trader and investor visa applica-
tions liy Americans require referral to Manila before
ap[)roval. On the other hand, American consular
otRcials have been instructed to interpret liberally the
provisions covering treat.v traders and have consist-
ently issued .such visas, without referral to Wash-
ington, to anyone who could remotely qualify under the
law for such classification.

JAXUARY 2 9, 1968

153

Appendix III

1. In regard to paragraph 20 a) , the Philippine Panel
replied that over the period 1949-19G2, exchange and
import controls rather than tariffs were the oiierative
import-restriction mechanism, and their imposition was
fully justified in view of the acute foreign exchange
situation of the Philippines. Since the dismantling of
exchange and import controls in early 1962, the Philip-
pines has had to rely on the tariff mechanism in order
to discourage unessential imports, and tariff rates on
such imports were therefore raised in order to ensure
the success of the decontrol program and to maintain
the viability of infant industries in key sectors of the
Philippine economy.

The Philippine Panel emphasized that, over the pe-
riod under discussion, many essential imports of raw
materials and capital equipment were facilitated
through generous allocations of foreign exchange dur-
ing the period of controls and, during the post-control
I>eriod, through import duty and tax exemption privi-
leges through such laws as the Basic Industries Act
(R.A. 3137 as amended). Moreover, the Philippine
Panel pointed out that despite the tariff increases which
were applicable to imports from all third countries, the
bulk of essential imports by the Phi!ipi)ines originated
from the United States.

2. In regard to paragraph 20 b) , the Philippine Panel
replied that:

A. The measures taken by the Philippine Government
were necessary to protect its foreign exchange position
and to promote the growth of the tobacco industry.

B. Large quantities of textile remnants entered into
this country had unrealistic valuations for customs
dut.v purposes, thus depriving the Government of rev-
enue and creating a situation wherein such textile rem-
nants dominated the domestic market and threatened
the extinction of the textile industry in the Philippines.
The imposition of fixed values was intended to ensure
the appropriate collection of customs revenues on the
textile goods actually exported to the Philippines.

3. In regard to paragraph 20 c) , the Philippine Panel
replied that positive steps are being taken to simplify
documentation requirements.

4. In regard to paragraph 20 d ) , the Philippine Panel
replied :

1. That there are two kinds of visas under Section
9(a) (temporary visitor's visa) of the Philippine Immi-
gration Act of 1940 available to American businessmen
depending upon the duration of the trip in the Philip-
pines as stated in their applications, namely : a gratis
single entry visa for a period of .59 days and a multiple
entry visa valid for one year. The fees for visas or
services rendered for their extension are prescribed by
law and have remained at the same rates since 1940 ;
and

2. That the apparently strict interpretation of the
treaty trader's and treaty investor's visa requirements
has been dictated by the indiscriminate practice of
large American firms in the Philippines of applying
for these types of visas to circumvent immigration
requirements for pre-arranged employment for their
personnel who do not possess the requisite qualifica-
tions.

Appendix iV

Memorandum

NOVEMBEE 25, 1967

Subject: Ovsmership of Private Agricultural Land by
US Nationals after July 3, 1974

Article XIII, Section 5 of the Philippine Constitution
provides :

Save in cases of hereditary succession, no private
agricultural land shall be transferred or assigned
except to individuals, corporations, or associa-
tions qualified to acquire or hold lands of the public
domain in the Philippines.

Article XIII, Section 1 of the Constitution allows
alienation of public agricultural land but restricts the
"disposition, exploitation, development, or utilization"
of those lands, as well as timber and mineral lands and
other natural resources to Philippine citizens and cor-
porations in which at least sixty percent of the capital
is owned by Philippine citizens. The so-called "Parity
Ordinance" to the constitution modified this restriction,
however, by specifying that, notwithstanding the pro-
visions of Article XIII, section 1, the "disposition, ex-
ploitation, development, and utilization" of these public
lands and natural resources "shall, if open to any per-
son, be open to" US citizens and corporations in the
same manner and under the same conditions as Philip-
pine citizens and corporations. This ordinance also
provided that it would in no case extend beyond July
3, 1974. Therefore, during that period, US citizens and
corporations are able to hold land in the public domain
and, for that reason, private agricultural land may
lawfully be transferred or assigned to US citizens and
corporations.

Unlike Article XIII, section 1, there is no provi.sion
in the constitution prohibiting dispo.sition, utilization,
development, or exploitation of private agricultural
land by aliens ; all that is prohibited is transfer or
assignment to aliens. It seems apparent, therefore, that,
in the absence of any law to the contrary, lawful
transfers or assignments of private agricultural land
to US citizens or corporations on or before July 3, 1974
remain effective after that date in accordance with
the terms of such transfers or assignments. Except
through hereditary succession, however, these lands
could not thereafter be transferred or assigned to other
US citizens or corporations.

Even with respect to leases and franchises concern-
ing natural resources and public utilities, it has not
been suggested that US citizens cannot continue to own
these leases or franchises after July 3, 1974 tf the
terms of the lease or franchise extend beyond that date ;
it is merely the rights to develop, exploit, and operate
that have been questioned.

As this analysis demonstrates, the que.stion of private
agricultural land is separate and distinct from the
question of leases or franchises relating to natural re-
sources or jiublic utilities. Neither the constitution nor
any other law of the Philippines, so far as I am aware,
purports to terminate on July 4, 1974 lawfully acquired
rights of ownership or possession of private agricultural
land. I conclude that the right of US citizens to acquire
such land terminates on that date but not the rights
created by previous, lawful transfers or assignments.

Geobqe H. Aldeich, Memher, U.S. Panel

154

DEPARTMENT OF STATE BULLETIN

U.S. Calls Soviet Allegations
Against Germany Unfounded

Follmcing is the text of a note delivered to
the Soviet Ministry of Foreign Affairs hy the
American Evibassy in Moscoio on December
29.

Press release 305 dated December 29

The Government of the United States refers
to the declaration of the Government of the
U.S.S.E., dated December 8, 1967.^

Tlie liistory of American policy on Germany
since World War II makes clear the importance
which the American Government attaches to
the oblications it assumed with the Soviet
Union, France and the United Kingdom for
the future of Germany. In dealing with the
German problem, including the Federal Ee-
public and Berlin, this Government has con-
I sistently adhered to these obligations and acted
I in a way consistent with U.S. special responsi-
bilities as one of the Four Powers.

The enduring opposition of this Government
to totalitarianism of any form is a matter of
public record, and does not need repeating. The
United States, adhering to this position, must
\ reject the accusations against the Government
of the Federal Kepublic as completely un-
founded. The Government of the Federal Ee-
public is the only freely elected and representa-
tive government in Germany. There is no evi-
dence whatsoever that the Government of the
I Federal Eepublic of Germany has supported
" or now supports totalitarian ideas in any way.
Indeed, the present government, which repre-
sents the free choice of the great majority of
the German people, is a coalition of parties
which, both in philosophy and m practice, are
dedicated to democratic principles. This is true
as well of the opposition party in the Bundestag.
The Soviet allegation that the Federal Ee-
public has threatened its neighbors is entirely
without foundation. In fact, as the Soviet Gov-
ermnent is aware, the Government of the Fed-
eral Eepublic seeks to improve rslations with
its neighbors and is prepared to conclude agree-
ments for reciprocal renunciation of the use of
force. The Federal Eepublic, as long as 13
years ago, renounced the manufacture of nu-
clear weapons and has repeatedly made clear
it has no intention to acquire them. The armed

' Not printed here.

forces of the Federal Eepublic are within the
framework and imder the command of the North
Atlantic Treaty Organization and are defensive
in nature and in purpose. They are not a threat
to anyone.

The Government of the United States en-
dorses the efforts of the Federal Eepublic to
reduce tension between itself and the countries
of Eastern Europe, including the Soviet Union,
and to obtain a more humane life for all Ger-
mans. This Government hopes that, as a result
of these efforts, as well as those of the powers
having special responsibilities for Germany as
a whole, it will eventually be possbile to agree
on a just and peaceful solution of the German
problem which will satisfy the legitimate inter-
ests of all people, including the people of Ger-
many, and will strengthen the peace of Europe.

Congressional Documents
Relaf^ing to Foreign Policy

90th Congress, 1st Session

United States Contributions to International Organiza-
tions. Letter from the Secretary of State transmit-
ting the 15th Report on the Extent and Disposition
of U.S. Contributions to International Organizations
for the Fiscal Year 1066. H. Doc. 140. July 12, 1967.
171 pp. and charts.

Message from the President of the United States trans-
mitting Eleventh Annual Report of the President on
the Trade Agreements Program for 1966. H. Doc. 177.
October 25, 1967. 67 pp.

World Newsprint Supply-Demand Outloolj Through
1969. Report of the House Committee on Interstate
and Foreign Commerce. H. Rept. 970. November 17,
1967. 40 pp.

National Commitments. Report to accompany S. Res.
187. S. Rept. 797. November 20, 1967. 29 pp.

Submission of the Vietnam Conflict to the United Na-
tions. Report to accompany S. Res. 180. S. Rept. 798.
November 21, 1967. 7 pp.

International Claims. Report to accompany H.R. 9063.
S. Rept. 836. December 4, 1967. 24 pp.

Interim Report on the United Nations and the I-ssue
of Deep Ocean Resources together with hearings by
the Subcommittee on International Organizations
and Movements of the House Committee on Foreign
Affairs. H. Rept. 999. December 7, 1967. 311 pp.

Naval Vessel Loans. Conference Report to accompany
H.R. 6167. H. Rept. 1016. December 8, 1967. 5 pp.

Construction of Nuclear Desalting Plants in the Middle
East. Report to accompany S. Res. 155. S. Rept. 920.
December 11, 1967. 4 pp.

Marine Resources and Engineering Development Act
of 1966. Report to accompany H.R. 1.3273. S. Rept.
939. December 13. 1967. 10 pp.

Foreign Assistance and Related Agencies Appropria-
tions, 1968. Conference Report to accompany H.R.
13893. H. Rept. 1044. December 13, 1967. 6 pp.

JANUARY 29, 1968

155

INTERNATIONAL ORGANIZATIONS AND CONFERENCES

U.S. Proposes International Education Year

Following is a statement hy Arthur J. Gold-
herg, U.S. Representative to the General As-
sembly .^ made in Committee II {Economic and
Social) on Deceinher 7, togetlier with the text
of a resolution ivhich uuvs approved hy the com-
mittee on December 8 and adopted hy the
General Assembly on December 13.

STATEMENT BY AMBASSADOR GOLDBERG

U.S. /D.N. press release 231 dated December 7

My Government has joined with Argentina,
Austria, Ceylon, Colombia, Dahomey, Ghana,
Liberia, Mexico, Nepal, Nigeria, Norway,
Pakistan, Philippines, Thailand, Turkey,
United Arab Republic, and Venezuela in tabling
a draft resolution ' by which the General As-
sembly would de.signate the year 1970 as Inter-
national Education Year. It is with great
pleasure, Mr. Chairman, that I also advise you,
sir, and the members of this committee that
India and Iran this moniing have likewise
indicated a desire to join as cosponsors of this
resolution.

Mr. Chairman, we propose this step in the
conviction that human history, as H. G. Wells
wrote long ago, is "a race between education
and catastrophe" — and as of this moment there
can be no assurance that education is winning.
But education can win the race— if we, the
nations of the world, sufficiently mobilize our
educational resources to meet the pressing needs
of the better world all of us are ti-ying to create.

We believe that a well-conceived and carefully
planned International Education Year can give
a powerful stimulus to this cause.

Today, throughout the world, both rich and
poor countries are devoting more resources to
education than ever before. Yet, despite often
heroic efforts under veiy great odds, there is
still a glaring inadequacy of educational results.
Forty percent of the world's people — and in
some regions 80 percent — cannot read or write
the simplest word. Many schools and univer-
sities, maintained at great cost, are becoming
obsolete in both method and subject matter and
largely irrelevant to the concepts and skills
which developing nations desperately need.
Many millions of children and young people
who must live and produce and provide leader-
ship in the 21st century are still being educated
for the 19tli century — if indeed they are being
educated at all.

It is true, of coui'se, that these problems have
been recognized for years. Indeed, in 1962 the
Secretary-General wrote in his proposals for
action for the Development Decade : ^

Educated and trained pet>ple are always the chief,
and in the longer run the only, agents of development.
The unutilized talents of their people constitute the
chief present waste, and the chief future hope, of the
developing countries.

Proceeding from this premise, the Secretary-
General went on to propose ambitious educa-
tional targets. To help developing nations meet
these targets, various U.N. agencies createtl new
educational projects and facilities. For example,
UNESCO [United Nations Educational, Scien-
tific and Cultural Organization] and the World
Bank created the International Institute for
Educational Planning in Paris. The Inter-
national Labor Organization established an In-
ternational Center for Advanced Technical and

' U.X. doc. A/C.2/L. 992.

' U.N. doc. E/3613.

156

DEPARTMENT OF STATE BULLETIN

Vocational Traiiiinir in Turin. The General As-
sembly created tiie I'nited Nations Institute for
Training and liesearch. The World Bank not
only indicated an interest but began to invest
in etlucational facilities. The increasing: re-
souri'es of the U.N. Development Program have,
as the members of this committee know, gone
into educational projects.

In addition, contributions to international
education have continued to flow fi'om many
other sources. My own Government created over
'2 years ago a task force to recommend a long-
range jilan of worldwide educational endeavor
and particularly to assist the educational etforts
of the developing nations. I trust, Mr. Chair-
man, you will forgive me if I point out that I
personally took a great interest in this task
force because m\' wife was one of the members
of this task force.

But despite all such steps, we, the nations of
the world, are still a long way from having fully
mobilized our resources in the worldwide war
on ignorance. There exists among the educators
of the world a vast unexploited wealth of expe-
rience and ideas about etfective education. This
wealth has yet to be put fully to work where it
is most needed. There is still a wide gap between
the best educational work that we have at-
tained— or that new research will engender —
and (he worst that we still tolerate.

In the awareness of these worldwide needs,
there was convened this past October in my own
country, at Williamsburg, Virginia, an Inter-
national Conference on the World Crisis in
Education.^ This conference ai'ose from a pro-
posal by President Johnson, who urged that it
"take a fresh look at the world's new educational
needs.'' * It brought together under i^rivate
auspices 170 distinguished educational leaders
from 52 countries in Africa, Asia, Europe, and
the Americas. Among its prime movers and
leading particiixmts was the distinguished
Director General of UNESCO, Mr. Kene
Maheu.

It was from this conference in AVilliamsburg
that tJie suggestion ai'ose whicli we have laid
before this committee. I should like to quote
from the working group report on this subject :

We propose that tbe .vear 1970 should be designated
a.s the International Education Year, to draw atten-
tion ... to the long-term importance of education in
the balanced development and modernization of the
Planet.

This jn-oposal was endorsed in the final report
of (he conference, which stated the belief that
such an observance in 1970 "could mobilize ener-
gies and inspire world-wide initiatives that
would give this subject the priority it deserves."

I turn now to the pending draft resolution by
which we seek to give effect to this proposal.
Wlien I say "we," I mean our country and our
cosponsors.

The major step which this resolution proposes
is that the Assembly act now to designate the
year 1970 as the International Education Year.
It then proposes that the details should be
worked out and the necessary jjlanning set in
motion by our distinguished Secretary -General
in consultation with UNESCO and other appro-
priate entities of the United Nations family. The
Secretary-General's recommendations, after re-
view by the Economic and Social Council, would
then come before the General Assembly in time
for the International Education Year to be
formally proclaimed at its 24th regular session
in 1969.

Among the major issues to which the Inter-
national Education Year should appropriately,
m our view, address itself will certainly be such
important and widespread questions as these:

— How can teaching be made more efficient
and productive through better management and
tlirough new technology such as television and
communications satellites?

— How can new technology also be put to
work to spe«d the growth of literacy, without
which democracy itself is virtually impossible?

— How can schools work with conmiimity
development programs to improve the quality
of both rural and urban life?

— How can severely limited educational re-
sources be opened to gifted students on the most
appropriate and democratic basis, without re-
gard to wealth, class, sex, or race?

— What kinds of international cooperation
are most critically needed in the educational
field?

— And perhaps most crucial of all : How can
each nation's educational system give the most
vigorous support to that nation's development?

' For an address by President Johnson made before
the conference on Oct. 8, 1967, see Bulletin of Oct 30
1967. p. .569.

* For an address b.v President Johnson made at Hono-
lulu, Hawaii, on Oct. 17, 1966, see ibid., Nov. 28 1966
p. 812.

JAXCART 2 9, 10G8

157

To deal most effectively with such questions,
my Government believes that the International
Education Year should be planned and executed
on the broadest scale — by educators, national
leaders, economic development officials, man-
power experts, employers, labor unions, and
many others. A program so developed could
have a most beneficial effect, particularly in ce-
menting a closer understanding between educa-
tors and national developers and the broad fab-
ric of the whole society of every nation.

The need for such an understanding is great.
Without education, a nation cannot properly
heal the sick, feed the hungry, or house the
homeless. And — equally obviously — sick, hun-
gry, and homeless children cannot be educated.
Close cooperation between educators and devel-
opers is thus essential to tlie success of national
development programs on which the future of
himianity itself largely depends.

Mr. Chainnan, in this statement I have dis-
cussed education primarily in the context of the
development of nations. But I would not want to
leave the impression that we in the United
States view education solely in this light. Far
from it — the values of education are as many-
sided and many-faceted as human nature. True
education illuminates the mind and the soul of
the individual and imparts meaning and in-
spiration to his life. It is essential to a free, just,
and democratic society. It nourishes the arts and
sciences. It builds understanding, toleration, and
friendship among all groups and creeds and na-
tionalities. It is a messenger of peace on earth.

Especially in this great organization of the
United Nations, it is fitting that we should re-
member the enlightening jjower of education in
the service of peace. Perhaps the International
Education Year can help the schools of tomor-
row to fulfill this vital function — not only by
teachmg the truth about the human family but
also by helping to build societies which will be
more prosperous, more just, and thus more re-
sistant to hatred and violence.

We all know that this, not war and prepara-
tion for war, is the road that mankind must
travel, however difficult that road may be. In-
deed, the greater the difficulties, the greater must
be our efforts. For this is our common cause. In
our need for education and for all tlie works of
peace, we are truly one human family, tran-
scending any difference in political or economic
ideology.

In this spirit, Mr. Chairman, the United
States joins with its cosponsors in commending
to this committee the pending resolution to de-
clare the year 1970 the International Education
Year, and we urge its adoption.^

TEXT OF RESOLUTION «

International Education Yeab

The General Assembly,

Recalling the Secretary-General's appraisal of the
United Nations Development Decade at mid-point,' and
in particular his emphasis on the development of human
resources as the greatest potential resource of any
country,

Recalling Economic and Social Council resolution
1274 (XLIII) of 4 August 1967 on the development and
utilization of human resources.

Recognizing the urgent need for a more effective mo-
bilization of efforts in education and training as an es-
sential element of a successful strategy of international
development,

Recognising further the fundamental importance of
education as a means of widening man's horizons, im-
proving mutual understanding and strengthening inter-
national peace.

Convinced that an international education year on
the basis of appropriate planning would serve through-
out the world to mobilize energies and inspire initia-
tives in education and training,

1. Decides to observe an International Education
Year and provisionally designates the year 1970 for
this purpose, subject to review at the twenty-fourth
session of the General Assembly, in the light of the
preparatory work ;

2. Requests the Secretary-General to consult with the
United Nations Educational, Scientific and Cultural
Organization and other interested specialized agencies
in preparing a programme of activities to be undertaken
or initiated by Member States, by the United Nations
and by the specialized agencies, particularly the United
Nations Educational, Scientific and Cultural Organiza-
tion, and by other interested intergovernmental bodies,
in order to initiate those world-wide activities in edu-
cation which constitute the purpose of the International
Education Year ;

3. Further requests the Secretary-General to submit
a progress report to the General Assembly at its twenty-
third session through the Economic and Social Council
at its forty-fifth session, so that the Assembly may de-
cide, on the basis of those preparations, on the procla-
mation of International Education Year.

" Draft resolution A/C.2/L. 092/Rev. 1 was approved
by the committee on Dec. 8 by a vote of 76 (U.S.) to 0,
with 6 abstentions.

' U.N. doc. A/RES/2306 (XXII) ; adopted by the As-
sembly on Dec. 13 by a vote of 102 (U.S.) to 0, with 1
abstention.

' United Nations publication, Sales No. : 6.5.1.26.
[Footnote in original.]

158

DEPARTMENT OF STATE BULLETIN

U.S. Asks Security Council Study
of Criteria for U.N. Membership

Letter From Arthur J. Goldberg

U.S. Representative to the United Nations

U.S./D.N. press release 236 dated December 13

Decembek 13, 1967

His Excellency
Chief S. O. Adebo, CM.G.
President of the Security Council
United Nations, New York

Excellency: My Government has given
careful attention to the considerations expressed
by the Secretaiy General in the "Introduction of
the Annual Keport of the Secretary General on
the "VYork of the Organization" 22nd Session of
the General Assembly, Supplement No. lA
(A/6701/Add. 1), with respect to those states
"which have been referred to as 'micro-States',
entities which are especially small in area, popu-
lation, and human and economic resources, and
which are now emerging as independent States."

The Secretary General suggested in this In-
troduction that it might "be opportune for the
competent organs to undertake a thorough and
comprehensive study of tlie criteria for mem-
bership in the United Nations with a view to
laying dovm the necessary limitations on full
membership while also defining other forms of
association which would benefit both the 'micro-
States' and the United Nations." In so doing
he also referred to the provision of the Charter
with respect to membership (Article 4) under
which each applicant must, in the judgment of
the Organization, be able and willing to carry
out the obligations contained in the Charter.

It is our belief that examination of the con-
siderations presented by the Secretary General
is most likely to be fruitful if it is made in
terms of general principles and procedures.
Inasmuch as no applications for membership
are now pending in the Security Council, we
believe the time may be appropriate for con-
sidering the suggestions that have been put
forward.

As have other Council members, the United
States has for some time had under consider-
ation the sort of issues elucidated by the Secre-
tary General in his Introduction. As early as
September 20, 1965, the United States Eepre-

JANTjARY 29, 1968

sentative in the Council had occasion to refer
to the mattei".^ Representatives of other states
have done likewise on various occasions.

Members of the Council will recall that Rule
59 requires that in the absence of a contrary de-
cision by the Security Council, applications for
membership be referred by the President to the
Committee on the Admission of New Members.
Although the Committee on Membership has in
fact been inactive for some time, it is a stand-
ing committee under the Rules, on which all
members of the Council are represented.

The United States believes that the Security
Council could usefully and appropriately seek
the assistance and advice of this Committee in
examining the issues outlined by the Secretary
General with a view to providing the members
and the Security Council with appropriate in-
formation and advice. We would accordingly
request that as President of the Council you
consult the members about the possibility of re-
convening the Committee for such a purpose.

I would appreciate it if you would circulate
this letter as a document of the Security
Council."

Accept, Excellency, the assurances of my
liighest consideration.

Akthur J. Goldberg

TREATY INFORMATION

United States and Mexico Extend
Radio Broadcasting Agreement

Press release 304 dated December 26

On December 21 a protocol between the
United States and Mexico further extending
until December 31, 1968, the agreement of Jan-
uary 29, 1957,^ concerning radio broadcasting in
the standard broadcast band was signed at
Mexico City.

' For a statement made in the Security Council on
Sept 20, 1965, by Ambassador Charles W. Tost, see
U.S./U.N. press release 4643.

= U.N. doc. S/S296.

° Treaties and Other International Acts Series 4777.

159

The 1957 ag^reement entered into force on
June 9, 1961, efTective for 5 j'ears. It expired by
its own terms on June 9, 1966. A protocol signed
on April 13, 1066, and brought into force by
the exchange of instruments of ratification on
January 12. 1967, had the effect of reviving and
continuing in force the 1957 agreement through
the year 1967.

Discussions between United States and Mexi-
can officials with a view to a new compi-ehensive
agreement on the subject are continuing.

The new protocol will be sent to the Senate
for advice and consent to ratification.

Current Actions

MULTILATERAL

Labor

International Labor Ckinvention (No. 58) fixing the
minimum age for the admission of children to em-
ployment at sea (revised 1936). Adopted b.v the In-
ternational Labor Conference at its 122d session,
Geneva, October 24, 1930. Entered into force April
11, 1939; for the United States October 29, 1939.
TS 952.

Territorial application,: Bermuda (with modifica-
tions), October 4, 196T.

Maritime Matters

Amendment to article 28 of the Convention on the In-
tergovernmental Maritime Consultative Organiza-
tion (TIAS 4(K14). Adopted at Paris September 28,
1965. Enters into force November 3, 1968.
Acceptance deposited: Nigeria, December 6, 1967.

Narcotic Drugs

Single convention on narcotic drugs, 1961. Done at
New York March 30, 1961. Entered into force De-
cember 13, 1964 ; for the United States June 24, 1967.
TIAS 6298.

HalifieatioDfi deposited: Australia' and Guatemala,
December 1, 1967.

BILATERAL

Ceylon

Agreement for sales of agricultural commodities under
title I of the Agricultural Trade Development and
Assistance Act of 19.54, as amended (68 Stat. 454, as

amended; 7 U.S.C. 1691-1736D), with annex. Signed
at Colombo October 27, 1967. Entered into force
October 27, 1967.

Chile

Agreement for sales of agricultural commodities under
title I of the Agricultural Trade Development and
A.ssi.stance Act of 1954, as amended (68 Stat. 454,
as amended; 7 U.S.C. 1691-1 736D). with agreement
and annex. Effected by exchange of notes at San-
tiago December 29, 1967. Entered into force Decem-
ber 29, 1967.

China

Agreement relating to the loan of a naval vessel to
China. Effected by exchange of notes at Taipei
December 7 and 15, 1967. Entered into force Decem-
ber 15, 1967.

Congo (Kinshasa)

Agreement amending the agreement for sales of agri-
cultural commodities of March 15. 1967, as amended
(TIAS 6329). Effected by exchange of notes at Kin-
.shasa December 15 and 21, 1967. Entered into force
December 21, 1967.

Italy

Agreement amending the agreement of December 18,
lf)48, as amended, for financing certain educational
exchange programs (TIAS 1864, 3148, 3278, 4254,
6179). Effected by exchange of notes at Rome Octo-
ber 12 and December 6, 1967. Entered Into force
December 6, 1967.

Malagasy Republic

Agreement amending and extending the agreement of
October 7, 1963, as amended, providing for the es-
tablishment and operation of a space vehicle track-
ing and comuuinication station in Madagascar
(TIAS 5473, 6024). Effected by exchange of notes
at Tananarive December 11 and 21, 1967. Entered
into force December 21, 1967.

Paraguay

Agreement for sales of agricultural commodities under
title I of the Agricultural Trade Development and
Assistance Act of 1954, as amended (68 Stat. 4.54, as
amended; 7 U.S.C. 1691-1736D). with annex. Signed
at Asuncion December 22, 1967. Entered into force
I^ecember 22, 1967.

' With a declaration.

Correction

The Editor of the Bulletin regrets an error in
the is.sue of January 8, 1968, p. 49. The title ap-
pearing on that page and on the cover should
have read ; "North Atlantic Council Meets at
Bnissels." Also, in the second line of the italic
paragraph on p. 49, "Brussels" should be sub-
stituted for "Luxembourg."

160

DEPARTMENT OF STATE BULLETIN

INDEX January 29, 1968 Vol. LVIII, No. H92

Africa. Message to Africa (Humphrey) . . . 129

Asia. United States OflJcials Report on Overseas
Reactions to President Johnson's Balance-of-
Payments Program (transcript of news brief-
ing) 135

Cambodia

United States and Cambodia Hold Talks at
Phnom Penh (Bowles, joint communique) . 133

U.S. Offers Helicopters for ICC Surveillance
Work in Cambodia (text of U.S. message to
Cambodia) 134

Congress. Congressional Documents Relating to
Foreign Policy 155

Economic Affairs

Message to Africa (Humphrey) 129

United States Officials Report on Overseas Re-
actions to President Johnson's Balance-of-
Payments Program (transcript of news brief-
ing) 135

U.S.-Phillppine Committee Holds Talks on Fu-
ture Economic Relations (text of Committee
report) 146

Educational and Cultural Affairs

Implementation of Katzenbach Report . . . 145

U.S. Proposes International Education Year

(Goldberg, text of resolution) 156

Europe. United States Officials Report on Over-
seas Reactions to President Johnson's Balance-
of-Payments Program (transcript of news
briefing) 135

Foreign Aid. Development Aid : the National
Interest and International Stability (Gaud) . 143

Germany. U.S. Calls Soviet Allegations Against
Germany Unfounded (text of U.S. note) . . 155

HumanRights. Message to Africa (Humphrey) . 129

Mexico. United States and Mexico Extend
Radio Broadcasting Agreement 159

Philippines. U.S.-Philippine Committee Holds
Talks on Future Economic Relations (text of
Committee report) 146

Trade. U.S.-Philippine Committee Holds Talks
on Future Economic Relations (text of Com-
mittee report) 146

Treaty Information

Current Actions 160

United States and Mexico Extend Radio Broad-
casting Agreement 159

U.S.S.R.

U.S. Calls Soviet Allegations Against Germany
Unfounded (text of U.S. note) 165

r.S. Replies to Soviet Charges of Damage to
Ship at Haiphong (text of U.S. note) ... 145

United Nations

U.S. Asks Security Council Study of Criteria for

U.N. Membership (Goldberg) 159

U.S. Proposes International Education Year

(Goldberg, text of resolution) 156

Viet-Nam

United States and Cambodia Hold Talks at
Phnom Penh (Bowles, joint communique) . 133

U.S. Offers Helicopters for ICC Surveillance
Work in Cambodia (text of U.S. message to
Cambodia) 134

United States Officials Report on Overseas Reac-
tions to President Johnson's Balance-of-Pay-
ments Program (transcript of news briefing) . 135

U.S. Replies to Soviet Charges of Damage to
Ship at Haiphong (text of U.S. note) ... 145

Name Index

Bowles, Chester 133

Deming, Frederick L 135

Gaud, William S 143

Goldberg, Arthur J 156, 159

Humphrey, Vice President 129

Katzenbach, Nicholas deB 135

Rostow, Eugene V 135

Roth, William M 135

Check List of Department of State
Press Releases: January 8-14

Press releases may be obtained from the Office
of News, Department of State, Washington,
D.C. 20520.

Releases issued prior to January 8 which ap-
pear in this issue of the Bulletin are Nos. 304
of December 26, 305 and 307 of December 29,
and 3 and 4 of January 6.

No. Date Subject

5 1/10 U.S. message of December 25 to Royal
Cambodian Government.

t6 1/13 Katzenbach: Adlal E. Stevenson In-
stitute, Chicago.

t" 1/13 U.S.-Japan cotton textile arrange-
ment (rewrite).

15 1/12 U.S.-Cambodia joint communique.

tHeld for a later issue of the Bulletin.

Superintendent of Documents

u.s. government printing office

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THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

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BULLETIN

Vol. LVJII, No. H9S

February 5, 1968

THE STATE OF THE UNION

Address of President Johnson to the Congress (Excerpts) 161

THE CHALLENGES OF OUR CHANGING ATLANTIC PARTNERSHIP
iy Under Secretary Katzenbaoh 168

VIET-NAM AND THE FUTURE OF EAST ASIA
by Assistant Secretary Bvmdy 176

U.S. AND U.S.S.R. SUBMIT COMPLETE DRAFT TREATY ON NONPROLIFERATION
OF NUCLEAR WEAPONS TO GENEVA DISARMAMENT CONFERENCE

Statements by President Johnson amd Adrian S. Fisher
and Text of Draft Treaty 16^.

For indew see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1493
February 5, 1968

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Note: Contents of this publication are not
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STATE BULLETIN as the source will be
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The Department of State BULLETIN,
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Office of Media Services, Bureau of
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with information on developments in
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and the Foreign Service,
The BULLETIN includes selected
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The State of the Union

ADDRESS OF PRESIDENT JOHNSON TO THE CONGRESS (EXCERPTS)

Mr. Speaker, Mr. President, Members of the
Congress, and my fellow Americans:

I was thinking, as I was walking down the
aisle tonight, of what Sam Eaj'burn told me
years ago : The Congress always extends a very
warm welcome to the President — as he comes
in. I thank all of you very, very much.

I have come once again to this Chamber, the
home of our democracy, to give you, as the
Constitution requires, "Information of the
State of the Union."

I report to you that our country is challenged
at home and abroad :

— that it is our will that is being tried, not our
strength ; our sense of purpose, not our ability
to achieve a better America ;

— that we have the strength to meet our every
cliallenge: the physical strength to hold the
course of decency and compassion at home and
the moral strength to support the cause of peace
in the world.

And I report to you that I believe, with abid-
ing conviction, that this people — nurtured by
their deep faith, tutored by their hard lessons,
moved by their high aspirations — have the will
to meet the trials that these times impose.

Since I reported to you last January, three
elections have been held in Vietnam — in the
midst of war and under the constant threat of
violence. A President, a Vice President, a House
and Senate, and village officials have been
chosen by popular, contested ballot. The enemy
has been defeated in battle after battle. The
number of South Vietnamese living in areas
under government protection tonight has grown
by more than a million since January of last
VL'ar. These are all marks of progress.

Yet the enemy continues to pour men and

material across frontiers and into battle despite
his continuous heavy losses. He continues to
hope that America's will to persevere can be
broken. Well, he is wrong. Ainerica will per-
severe. Our patience and our perseverance
will match our power. Aggression will never
prevail. But our goal is peace — and peace at the
earliest possible moment.

Right now we are exploring the meaning of
Hanoi's recent statement. There is no mystery
about tlie questions which must be answered
before the bombing is stopped.

We believe that any talks should follow the
San Antonio formula that I stated last Septem-
ber,- which said the bombmg would stop im-
mediately if talks would take place promptly
and with reasonable hopes that they would be
productive and the other side must not take
advantage of our restraint, as they have in the
past. This nation simply cannot accept anything
less without jeopardizing the lives of our men
and of our allies.

If a basis for peace talks can be established
on the San Antonio foundations — and it is my
hope and my prayer that they can — we would
consult with our allies and with the other side
to see if a complete cessation of hostilities, a
really true cease-fire, could be made the first
order of business. I will report at the earliest
possible moment the results of these explora-
tions to the American people.

I have just recently returned from a very
fi-uitful visit and talks with His Holiness the
Pope, and I share his hope, as he expressed it
earlier today, that both sides will extend them-
selves in an effort to bring an end to the war
in Vietnam. I have today assured him that we
and our allies will do our full part to bring this
about.

'Delivered on .Jan. 17 (White House press release).

' Bulletin of Oct. 23, 1967, p. 519.

FEBRtJART 5, 1968

161

Since I spoke to you last January, other
events have occurred that have major conse-
quences for world peace.

— The Kennedy Round achieved the greatest
reduction in tariff barriers m all the history of
trade negotiations.

— The nations of Latin America at Punta del
Este resolved to move toward economic integra-
tion.

— In Asia, the nations from Korea and Japan
to Indonesia and Singapore worked behind
America's shield to strengthen their economies
and to broaden their political cooperation.

— In Africa, from which the distinguished
Vice President has returned, he reports to me
there is a spirit of regional cooperation that is
beginning to take hold in very practical ways.

These events we all welcomed. Yet, since I
last reported to you, we and the world have
been confronted by a number of crises :

During the Arab-Israeli war last June, the
hot line between Washington and Moscow was
used for the first tune in our liistory. A cease-
fire was achieved without a major-power con-
frontation.

Now the nations of the IMiddle East have the
opportunity to cooperate with Ambassador
[Gumiar] Jarring's U.N. mission ^ and they
have the responsibility to find the terms of liv-
ing together in stable peace and dignity, and
we shall do all in our power to lielp them
achieve that result.

Not far from this scene of conflict, a crisis
flared on Cyprus involving two peoples who
are America's f liends : Greece and Turkey. Our
very able representative, Mr. Cyrus Vance, and
others helped to ease this tension.

Turmoil continues on the mainland of China
after a year of violent disruption. The radical
extremism of their govermnent has isolated the
Chinese people behind their own borders. The
United States, however, remains willing to per-
mit the travel of journalists to both our coun-
tries; to undertake cultural and educational
exchanges; and to talk about the exchange of
basic food crop materials.

Since I spoke to you last, the United States
and the Soviet Union have taken several im-
portant steps toward the goal of international
cooperation.

For background and text of a Security Council reso-
lution adopted on Nov. 22, 1967, see Md., Dec. 18, 1967,
p. 834.

As you remember, I met with Chairman [of
the Council of Ministers of the Soviet Union
Aleksei N.] Kosygin at Glassboro for 2 days,
achieving, if not accord, at least a clearer under-
standing of our respective positions.

Because we believe the nuclear danger must
be narrowed, we have worked with the Soviet
Union and other nations to reach an agreement
that will halt the spread of nuclear weapons.
On the basis of conmnunications from Ambas-
sador Fisher [Adrian S. Fisher, U.S. Repre-
sentative to the Conference of the 18-Nation
Disarmament Committee] in Geneva this after-
noon, I am encouraged to believe that a draft
treaty can be laid before tlie conference in
Geneva in the near future.* I hope to be able to
present that treaty to the Senate this year for
the Senate's approval.

"We achieved in 1967 a consular treaty with
the Soviets, the first conmiercial air agreement
between the two countries, and a treaty banning
weapons in outer space. We shall sign and sub-
mit to the Senate shortly a new treaty witli the
Soviets and with others for the protection of
astronauts.

Serious differences still i-emain between us,
yet in these relations we have made some prog-
ress since Vienna, tlie Berlin wall, and the
Cuban missile crisis.

Yet, despite this progress, we must maintain
a military force that is capable of deterring
any threat to this nation's security, whatever
the mode of aggression. Our choices must not be
confined to total war or total acquiescence.

We have such a military force today. We
shall maintain it.

I wish with all of my heart that the expendi-
tures that are necessary to build and to protect
our power could all be devoted to the programs
of peace. But until world conditions permit,
and until peace is assured, America's might and
America's bravest sons who wear our nation's
uniform must continue to stand guard for all
of us, as they gallantly do tonight in Vietnam
and other places in the world.

Yet neither great weapons nor individual
courage can provide the conditions of peace.

For two decades America has committed itself
against the tyranny of want and ignorance in
the world that threatens the peace. We shall
sustain that commitment.

This year I shall propose :

* See p. 164.

162

DEPARTMENT OF STATE BtILL,ETlK;

I

— tliiit we launch, with other nations, an ex-
ploration of tlie ocean doptlis to tap its wealth
and its energy suid its abundance;

— that we contribute our fair share to a major
expansion of the International Development
Association and to increase the resources of
the Asian Development Banl^;

— that we adopt a prudent aid program rooted
in the principle of self-help ;

— that we renew and extend the Food for
Freedom program.

Our food programs have already helped mil-
lions avoid the horrors of famine. But unless
the rapid growth of population in developing
countries is slowed, the gap between rich and
poor will widen steadily.

Governments in the developing countries
must take such facts into consideration. We in
the United States are prepared to help assist
them in those efforts.

But we must also improve the lives of chil-
dren already born in the villages and towns
and cities already on this earth. They can be
taught by great teachers through space com-
munications and the miracle of satellite tele-
vision, and we shall bring to bear every resource
of mind and technology to help make this dream
come true.

Next month we begin our eighth year of
uninterrupted prosperity. The economic out-
look for this year is one of steady growth — if we
are vigilant.

On January 1st, I outlined a program to re-
duce our balance-of-payments deficit sharply
this year.= We will ask the Congress to help
carry out those parts of the program which re-
quire legislation. We must restore equilibrium
to our balance of payments.

We must also strengthen the international
monetary system. We have assured the world
that America's full gold stock stands behind our

"Bulletin of Jan. 22, IOCS, p. 110.

commitment to maintain the price of gold at $35
an oimce. We must back this commitment by
legislating now to free our gold reserves.

Americans, traveling more than any other
people in history, took $4 billion out of their
country last year in travel costs. We must try to
reduce the travel deficit that we have of more
than $2 billion. We are hoping tliat we can
reduce it by $500 million — without unduly
penalizing the travel of students or teachers or
busmess people who have essential, necessary
travel or people who have relatives abroad
whom they need to see. Even with the reduction
of $500 million, the American people will still be
traveling more overseas than they did in 1967,
1966, or 1965 or any other year in their histoiy.

If we act together as I hope we can, I believe
we can continue our economic expansion which
has already broken all past records.

Tonight I have spoken of some of the goals I
should like to see America reach. Many of them
ca,n be achieved this year — others by the time
we celebrate our nation's 200th birthday — the
bicenteimial of our independence.

Several of these goals will be very hard to
reach. But the state of our Union will be nuich
stronger 8 years from now on our 200th birth-
day if we resolve to reach these goals now. They
are more important — much more important —
than the identity of the party or the President
who will then be in office.

These goals are what the fighting and our
alliances are really meant to protect.

Can we achieve these goals ?

Of course we can — if we will.

If ever there was a people who sought more
than mere abundance, it is our people.

If ever there was a nation that is capable of
solving its problems, it is this nation.

If ever there M-as a time to know the pride
and the excitement and the hope of being an
i\jnerican, it is this time.

So this, my friends, is the state of our Union :
seeking, building, tested many times in this past
year — and always equal to the test.

Thank you and good night.

FEBRUARY 5, 1968

163

U.S. and U.S.S.R. Submit Complete Draft Treaty on Non proliferation
of Nuclear Weapons to the Geneva Disarmament Conference

The Conference of the Eighteen-N ation Com-
mittee on Disarmam,ent resumed its session at
Geneva on January 18. The White House an-
nounced on January J8 that it had been in-
formed at Ji.:25 that morning that the U.S.S.R.
and the United States, as cochairmen of the
Committee, would that day submit to the Con-
ference a comflete draft of the treaty to stop
the spread of nuclear weapons. Following is
the text of the draft treaty, together tcith state-
ments hy President Johnson and iy Adrian S.
Fisher, head of the U.S. delegation at Geneva.

STATEMENT BY PRESIDENT JOHNSON

Wbite House press release dated January 18

I am most heartened to learn that the Soviet
Union will join the United States, as cochair-
men of the Eighteen-Nation Disarmament
Committee, to submit a complete text of a treaty
to stop the spread of nuclear weapons and that
this draft treaty will be submitted today to the
Committee in Geneva. This revised text includes
an agreed safeguards article and other revisions
that will make the treaty widely acceptable.^

We have worked long and hard in an effort
to draft a text that reflects the views of other
nations. I believe the draft presented today
represents a major accomplishment in meeting
these legitimate interests.

The text submitted today must now be con-
sidered further by all govermnents. Following
its review by the Conference in Geneva, it will
be considered by the General Assembly in the
spring. It is my fervent hope that I will be able
to submit it to the Senate of the United States
for its advice and consent this year.

The draft treaty text submitted today clearly
demonstrates an important fact. In the face
of the differences that exist in the world, the

'For background and text of a draft treaty sub-
mitted to the Geneva Disarmament Conference on
Aug. 24, 1967, see Bulletin of Sept. 11, 1967, p. 315.

two nations which carry the heaviest responsi-
bility for averting the catastrophe of nuclear
war can, with sufficient patience and determina-
tion, move forward. They can move forward
toward the goal which all men of good will seek :
a reversal of the arms race and a more secure
peace based on our many common interests on
this one small planet.

I believe history will look on this treaty as a
lancbnark in the effort of mankind to avoid nu-
clear disaster, while insuring that all will bene-
fit from the peaceful uses of nuclear energy.

This treaty will be a testament of man's faith
in the future. In that spirit I commend it to all.

STATEMENT BY MR. FISHER,
GENEVA, JANUARY 18 ^

As chairman I would like to say a few words
about the importance of the session of the Con-
ference of the Eighteen-Nation Committee on
Disarmament which we are beginning with our
meeting today. I would like to do so against
the background of United Nations General As-
sembly Eesolution 2346 (XXII), which was
adopted on December 19, 1967, by the General
Assembly of the United Nations, with only one
dissenting vote.

In that resolution the General Assembly
called upon this Committee urgently to con-

^ Made at the opening session of the Conference of
the Eighteen-Nation Committee on Disarmament at
Geneva on Jan. 18. Mr. Fisher served as U.S. Repre-
sentative and head of the U.S. delegation to the Con-
ference in the absence of William C. Foster, Director
of the U.S. Arms Control and Disarmament Agency,
who had been unable to return to Geneva because of
Illness. On behalf of the U.S. delegation Mr. Fisher
sent the following message to Mr. Foster on Jan. 18:
"We are about to table complete identical texts this
afternoon. Our only regret is that you are not here
and you are not tabling it, because it represents the
results of so many months and years of hard work and
leadership on your part. We hope that you will soon
be here to finish up the job. The entire delegation
joins me in this expression."

164

DEPARTMENT OF STATE BULLETIN

tiniie its work in preparing a draft inter-
national treaty to prevent tlie pi'oliferation of
nuclear weapons. It requested this Committee
to submit to the General Assembly on or before
March 15 of this year a full report on the nego-
tiations on such a draft treaty. It recommended
that, upon receipt of such report, appropriate
consultations be instituted in accordance with
the rules and procedures of the General Assem-
bly on the setting of an early date after March
15 for tiie resumption of the 22d session of the
General Assembly to consider item 28(a) "Non-
proliferation of nuclear weapons: Report of
the Conference of the Eighteen-National Com-
mittee on Disarmament."

In other resolutions the General Assembly
called upon this Committee to consider various
subjects, but only in connection with a treaty
on the proliferation of nuclear weapons has the
General Assembly requested us to submit a
report by an early date and only in connection
with tliis treaty did the General Assembly indi-
Ciite that it was prepared to consider a resumed
session to consider the results of our work. This
indicates the high importance the United Na-
tions has placed on the work of the Committee
in drafting an international treaty to prevent
the proliferation of nuclear weapons.

I am particularly pleased, therefore, to be
able to inform the Committee that the cochair-
men have today submitted revised draft texts
of the treaty for the Committee's consideration.
These texts, appearing in document ENDC/
192/Rev. 1 and ENDC/193/Rev. 1, contain an
article III on safeguards, as well as several new
articles and amendments to existing articles.

I know I speak for all of us when I express
tlie hope that this Committee can nov,' act defi-
nitely and expeditiously in responding to the
recommendation of the General Assembly. The
time has now arrived for decisive action to stop
the spread of nuclear weapons, and the woi"ld
will expect us to respond accordingly.

TEXT OF DRAFT TREATY

Januaby 18, 1968

Draft Tbeatt on the Non-Peoliferation
OF Nuclear Weapons

The States concluding this Treaty, hereinafter re-
ferred to as the "Parties to the Treaty",

Considering the devastation that would be visited
upon all mankind by a nuclear war and the consequent
need to make every effort to avert the danger of such

a war and to take measures to safeguard the security
of peoples,

Believing that the proliferation of nuclear weapons
would seriously enhance the danger of nuclear war.

In conformity with resolutions of the United Nations
General Assembly calling for the conclusion of an
agreement on the prevention of wider dissemination
of nuclear weapons,

Undertaking to cooperate in facilitating the applica-
tion of International Atomic Energy Agency safeguards
on peaceful nuclear activities,

EJxpressing their support for research, development
and other efforts to further the application, within the
framework of the International Atomic Energy Agency
safeguards system, of the principle of safeguarding
effectively the flow of source and special fissionable
materials by use of instruments and other techniques
at certain strategic points,

AtHrming the principle that the benefits of peaceful
applications of nuclear technology, including any
technological by-products which may be derived by
nuclear-weapon States from the development of nuclear
explosive devices, should be available for peaceful
purposes to all Parties to the Treaty, w-hether nuclear-
weapon or non-nuclear-weapon States,

Convinced that in furtherance of this principle, all
Parties to this Treaty are entitled to participate in the
fullest possible exchange of scientific information for,
and to contribute alone or in cooperation with other
States to, the further development of the applications
of atomic energy for peaceful purposes.

Declaring their intention to achieve at the earliest
possible date the cessation of the nuclear arms race,

Urging the cooperation of all States in the attain-
ment of this objective.

Desiring to further the easing of international ten-
sion and the strengthening of trust between States in
order to facilitate the cessation of the manufacture
of nuclear weapons, the liquidation of all their existing
stockpiles, and the elimination from national arsenals
of nuclear weapons and the means of their delivery
pursuant to a treaty on general and complete disarma-
ment under strict and effective international control,

Have agreed as follows:

Article I

Each nuclear-weapon State Party to this Treaty
undertakes not to transfer to any recipient whatsoever
nuclear weapons or other nuclear explosive devices or
control over such weapons or explosive devices directly,
or indirectly ; and not in any way to assist, encourage,
or induce any non-nuclear-weapon State to manufac-
ture or otherwise acquire nuclear weapons or other
nuclear explosive devices, or control over such weapons
or explosive devices.

Article II

Each non-nuclear-weapon State Party to this Treaty
undertakes not to receive the transfer from any trans-
feror whatsoever of nuclear weapons or other nuclear
explosive devices or of control over such weapons or
explosive devices directly, or indirectly ; not to manu-
facture or otherwise acquire nuclear weapons or other
nuclear explosive devices ; and not to seek or receive
any assistance in the manufacture of nuclear weapons
or other nuclear explosive devices.

FEBRUARY 5, 1968

165

Article III
1 Each non-nuclear-weapon State Party to the
Treaty undertakes to accept safeguards, as set forth
in an agreement to be negotiated and concluded with
the International Atomic Energy Agency in accordance
with the Statute of the International Atomic Energy
Agency and the Agency's safeguards system for the
exclusive purpose of verification of the fulfillment of
its obligations assumed under this Treaty with a view
to preventing diversion of nuclear energy from peaceful
uses to nuclear weapons or other nuclear explosive
devices. Procedures for the safeguards required by
this Article shall be followed with respect to source or
special fissionable material whether it is being pro-
duced processed or used in any principal nuclear
facility or is outside any such facility. The safeguards
required by this Article shall be applied on aU source
or special fissionable material in all peaceful nuclear
activities within the territory of such State, under its
jurisdiction, or carried out under its control anywhere.

2. Each State Party to the Treaty undertakes not
to provide: (a) source or special fissionable material,
or (b) equipment or material especially designed or
prepared for the processing, use or production of spe-
cial fissionable material, to any non-nuclear-weapon
State for peaceful purposes, unless the source or spe-
cial fissionable material shall be subject to the safe-
guards required by this Article.

3. The safeguards required by this Article shall be
implemented in a manner designed to comply with
Article IV of this Treaty, and to avoid hampering the
economic or technological development of the Parties
or international cooperation in the field of peaceful
nuclear activities, including the international exchange
of nuclear material and equipment for the processing,
use or production of nuclear material for peaceful
Atomic Energy Agency to meet the requirements of this
Article and the principle of safeguarding set forth in
the Preamble.

4. Non-nuclear-weapon Stales Party to the Treaty
.shall conclude agreements with the International
Atomic Energy Agency to meet the requirements of this
Article either individually or together with other
States in accordance with the Statute of the Interna-
tional Atomic Energy Agency. Negotiation of such
agreements shall commence within ISO days from the
original entry into force of this Treaty. For States
depositing their instruments of ratification after the
180-day period, negotiation of such agreements shall
commence not later than the date of such deposit. Such
agreements shall enter into force not later than
eighteen months after the date of initiation of negotia-
tions.

Article IV

1. Nothing in this Treaty shall be interpreted as
affecting the inalienable right of all the Parties to
the Treaty to develop re.^earch, production and use
of nuclear energy for peaceful purposes without dis-
crimination and in conformity with Articles I and II
of this Treaty.

2. All the Parties to the Treaty have the right to
participate in the fullest possible exchange of scien-
tific and technological information for the peaceful
uses of nuclear energy. Parties to the Treaty in a
position to do so .shall also cooperate in contributing

alone or together with other States or international
organizations to the further development of the appU-
cations of nuclear energy for peaceful purposes,
especially in the territories of non-nuclear-weapon
States Party to the Treaty.

Article V
Each Party to this Treaty undertakes to cooperate
to insure that potential benefits from any peaceful
applications of nuclear explosions will be made avail-
able through appropriate international procedures to
non-nuclear-weapon States Party to this Treaty on a
non-discriminatory basis and that the charge to such
Parties for the explosive devices used vnll be as low
as possible and exclude any charge for research and
development. It is understood that non-nuclear-weapon
States Party to this Treaty so desiring may, pursuant
to a special agreement or agreements, obtain any such
benefits on a bilateral basis or through an appropriate
international body with adequate representation of
non-nuclear-weai)on States.

Article VI

Each of the Parties to this Treaty undertakes to
pursue negotiations in good faith on effective measures
regarding cessation of the nuclear arms race and dis-
armament, and on a treaty on general and complete
disarmament under strict and effective international
control.

Article VII \

Nothing in this Treaty affects the right of any group i
of States to conclude regional treaties in order to as-
sure the total absence of nuclear weapons in their
respective territories.

Article VIII
1 Any Party to this Treaty may propose amend-
ments to this Treaty. The test of any proposed amend-
ment shall be submitted to the Depositary Governments
which shall circulate it to all Parties to the Treaty.
Thereupon, if requested to do so by one-third or more
of the Parties to the Treaty, the Depositary Govern-
ments shall convene a conference, to which they shall ■
invite all the Parties to the Treaty, to consider such
an amendment.

•> Any amendment to this Treaty must be approved
by a majority of the votes of all the Parties to the
Treaty including the votes of all nuclear-weapon States :
Party to this Treaty and all other Parties which, on
the date the amendment is circulated, are members of
the Board of Governors of the InternaUonal Atomic
Energy Agency. The amendment shall enter into force
for each Party that deposits its instrument of ratifica-
tion of the amendment upon the deposit of instruments
of ratificaUon by a majority of all the Parties, includ- ,
ing the instruments of ratification of all nuclear-weapon ,
States Party to this Treaty and all other Parties which,
on the date the amendment is circulated, are members
of the Board of Governors of the International Atomic
Energy Agency. Thereafter, it shall enter into force
for any other Party upon the deposit of its instrument of
ratification of the amendment.

3. Five years after the entry into force of this
Treaty, a conference of Parties to the Treaty shall be
held in Geneva, Switzerland, In order to review the

166

DEPARTMENT OF STATE BULLETHf

operation of this Treaty with a view to assuring that
*•>" .«^.~o „„A „..^„!o;,.„o Qf ^ij^ Treaty are being

the purposes and provisions
realized.

Article IX

1. This Treaty shall be open to all States for signa-
ture. Auy State which does not sign the Treaty before
its entry into force in accordance with paragraph 3 of
this Article may accede to it at any time.

2. This Treaty shall be subject to ratification by
signatory States. Instruments of ratification and
instruments of accession shall be deposited with the
Governments of , which are hereby desig-
nated the Depositary Governments.

3. This Treaty shall enter into force after its ratifi-
cation by all nuclear-weapon States signatory to tiis
Treaty, and 40 other States signatory to this Treaty
and the deposit of their instruments of ratification. For
the purposes of this Treaty, a nuclear-weapon State is
one which has manufactured and exploded a nuclear
weapon or other nuclear explosive device prior to Janu-
ary 1, 1967.

4. For States whose instruments of ratification or
accession are deposited subsequent to the entry into
force of this Treaty, it shall enter into force on the date
of the deposit of their instruments of ratification or
accession.

."). The Depositary Governments shall promptly in-
form all signatory and acceding States of the date of
each signature, the date of deposit of each instrument
of ratification or of accession, the date of the entry into
force of this Treaty, and the date of receipt of any
requests for convening a conference or other notices.

6. This Treaty shall be registered by the Depositary
Governments pursuant to Article 102 of the Charter of
the United Nations.

Article X

1. Each Party shall in exercising its national sov-
ereignty have the right to withdraw from the Treaty
if it decides that extraordinary events, related to the
subject matter of this Treaty, have jeopardized the
supreme interests of its country. It shall give notice of
such withdrawal to all other Parties to the Treaty and
to the United Nations Security Council three months in
advance. Such notice shall include a statement of the
extraordinary events it regards as having jeopardized
its supreme interests.

2. Twenty-five years after the entry into force of the
Treaty, a Conference shall be convened to decide wheth-
er the Treaty shall continue in force indefinitely, or
shall be extended for an additional fixed period or
periods. This decision shall be taken by a majority of
the Parties to the Treaty.

Article XI

This Treaty, the English, Russian. French, Spanish
and Chinese texts of which are equally authentic, shall
be deposited in the archives of the Depositary Govern-
ments. Duly certified copies of this Treaty shall be

transmitted by the Depositary Governments to the
Governments of the signatory and acceding States.

In witness whereof the undersigned, duly author-
ized, have signed this Treaty.

Done in at this

of

Letters of Credence

Barbados

The newly appointed Ambassador of Barba-
dos, Hilton Augustus Vaughan, presented his
credentials to President Johnson on January 19.
For texts of the Ambassador's remarks and the
President's reply, see Department of State press
release dated January 19.

Gabon

The newly appointed Ambassador of the Re-
public of Gabon, Leonard Antoine Badinga,
presented his credentials to President Johnson
on January 19. For texts of the Ambassador's
remarks and the President's reply, see Depart-
ment of State press release dated January 19.

Maldive Islands

The newly appointed Ambassador of the Mal-
dive Islands, Abdul Sattar, presented his cre-
dentials to President Johnson on January 19.
For texts of the Ambassador's remarks and the
President's reply, see Department of State press
release dated January 19.

Sierra Leone

The newl}' appointed Ambassador of Sierra
Leone, Adesanya Iv. Hyde, presented his creden-
tials to President Johnson on January 19. For
texts of the Ambassador's remarks and the
President's reply, see Department of State press
release dated January 19.

Thailand

The newly appointed Ambassador of Thai-
land, Bmichana Atthakor, presented his creden-
tials to President Jolinson on January 19. For
texts of the Ambassador's remarks and the
President's reply, see Department of State press
release dated January 19.

FEBRTJARY 5, 1968

167

The Challenges of Our Changing Atlantic Partnership

l>y Under Secretary Katzenbach '

As a lawyer who wandered into tlie diplo-
matic world a little over a year ago, I have
sometimes been forced to remind President
Johnson of Heniy Clay's advice to a nervous
client : "I cannot, at this juncture, clearly fore-
tell the outcome, but I counsel you to cultivate
calmness of mind and prepare for the worst."

But, despite some current problems, I have
never felt this way about the United States and
Europe.

We have behind us a 20-year record of
astonishing success in first building the Atlantic
relationship out of the chaos of the Second
World War and then adapting it progressively
to present-day needs. Our past achievements
give us every reason to believe that we can deal
successfully with the challenges ahead.

I want to talk today about some of those
challenges.

France, long a keystone of our Atlantic secu-
rity system, is now no more than a part-time
participant in the NATO system of collective
defense. Britain has taken the historic decision
to become a full partner in continental Europe.
But her application for entry into the Common
Market has, for a time, been frustrated. And
now the United States faces a balance-of-pay-
ments deficit which can only be reduced to liv-
able proportions through the understanding and
cooperation of the great trading nations of
Western Europe.

If we were to look at present difficulties with-
out perspective, Henry Clay's counsel might be
well taken. But to do so would be to overlook
the basic strengths of our Atlantic alliance.
There is still a great fund of good will on both
sides of the Atlantic; the areas of common

' Address made before the Adlai E. Stevenson Insti-
tute, Chicago, 111., on Jan. 13 (press release 6).

interest and purpose still greatly exceed those of
disagreement.

Any doubts I might have had about this
were quickly dispelled by the trip I made to
Europe last week at the President's behest.

Despite the physical strains involved in visit-
ing seven countries in 6 days — which, by the
way, is about as effective a way to discourage
tourism as any I can think of — I returned en-
couraged by the reception we received. Without
exception, Europe's political and economic
leaders accepted the necessity of the President's
action ; without exception, they recognized that
the economic well-being of the Western World
depends on the health and vigor of the
American economy.

In short, I returned from Europe with a re-
newed conviction that the ties that bind our
two continents to a common purpose will out-
last the strains the atavists among us are placing
upon them.

Yet I also returned with another feeling, a
feeling that we are now in the midst of what
after-dinner speakers like to call "a turning
point in history."' I am convinced that when we
emerge from this period, however long it may
take, relationships between the United States
and Europe will have changed substantially —
and for the better.

It is a truism, though one easily overlooked,
that in the 3'ears since World War II the inter-
dependence that has grown up between Europe
and America has almost totally transformed the
traditional relationships between nation-states.
We have become so interdependent, so enmeshed
in the same economic-teclinological-political
system, that conditions on one side of the At-
lantic have a profound and immediate effect on
the other side. It may once have been true that
when the United States sneezed Western

168

DEPARTMENT OF STATE BULLETIN

Europe caught cold. Now Europe and America
must work in tlie closest harmony if both are
to keep from coming down with pneumonia.
Great as the strength of the United States is,
overwhelming as our economic power may be,
we are no longer able to effect a cure by our-
selves.

That was the essence of my message to
Western Europe last week. I told them of the
President's plan to move our balance of pay-
ments toward equilibrium.- And I asked them to
avoid actions that would negate the effective-
ness of our program. Without the sympathetic
cooperation of our European friends, our meas-
ures can be, at best, only partially effective.

The International Adjustment Process

The vei-y success we have achieved in building
an international economic system which has per-
mitted history's gi-eatest expansion of world
trade has brought with it a whole new range
of problems. Dealing with them eff'ectively will
require the closest possible consultation and con-
tinuing cooperation between governments. This,
in turn, must inevitably lead to the further de-
velopment of existing institutional arrange-
ments within which the coordination of policy
can be accomplished. This necessary task has
already begim, but much still remains to be
done.

Let me cite a specific example which is before
us very much these days. You have all heard, no
doubt, of what we now refer to as the "adjust-
ment process." You will be hearing the phrase
often in the months to come. OECD [Organiza-
tion for Economic Cooperation and Develop-
ment] discussions have already indicated that
the free exchange of goods, tourists, and capital
caimot continue indefinitely if large imbalances
persist for long periods of time.

A principal conclusion of the OECD experts
who examined the adjustment process is that the
responsibility of maintaining equilibrium and
growth must be shared by deficit and surplus
countries alike. The United States, as a deficit
country, has a clear responsibility, a responsi-
bilitv which the President has demonstrated we

' For a statement by President Johnson on Jan. 4
regarding the action program on the balance of pay-
ments, see Bulletin of Jan. 22. 196S, p. 110 : for tran-
script of a news briefing held by Mr. Katzenbach and
other U.S. officials on Jan. 8, see ibid., Jan. 29, 1968,
p. 13.^.

intend to meet. Our first priority must be
passage of a tax bill which can help check
inflationary pressures. We can hardly expect
our trading partners to accept our balance-of-
payments measures — nor would they work well
— unless we demonstrate that we can continue
to run our internal economy responsibly.

But it is equally clear that the responsibility
for returning the balance of payments to equi-
librium should not rest solely with the deficit
partner. If we are forced to move in that direc-
tion, our only option is to take restrictive action.
To avoid a return to a protectionism reminiscent
of the thirties, the surplus countries must accept
a part of the responsibility. They must share
with us the search for ways to expand trade
which also further movement toward balance-
of-payments equilibrium.

Let me cite the kind of action that surplus
countries might take in the adjustment jjrocess.

We have long been concerned about tlie border
effects of certain taxes in the Common IMarket
countries. To reach an adjustment at a higher
level of equilibrium, the Europeans might see
their way clear to reduce or elhninate these
border efl'ects.

They could also help the movement toward
international equilibrium by following expan-
sionary policies that will mcrease their rate of

economic growth while maintaininar

price

stability.

The direction in which we must move is clear.
Most of us have learned the lessons of the "new
economics" as they aj^ply to our domestic econo-
mies. We must now extend those lessons to the
international sphere so that the progress we
have made domestically is not undone by our
failure to run our international economy in a
sensible fashion.

There is at least some evidence that we are
learning. The recent London and Rio Agree-
ments to meet future international liquidity
needs through the creation in the IMF [Inter-
national Monetary Fund] of Special Drawing
Eights ^ are more significant than they may ap-
pear to some. Unless we invent a new mathe-
matics, the elimination of our deficit would
ahnost certainly lower European surpluses and
limit future liquidity in our international pay-
ments system. Tlie SDR agreement at least
begins to deal with this situation. We hope that
go'-ernments will now proceed to approve the

' For background, see ibid., Oct. 23, 1967, p. 523.

FEBRUARY 5, 1968

169

SDR agreement so that it will be available next
year.

Yet, despite our growing interdependence,
our partnership still remains an unequal one.
For, no matter how much we strengthen exist-
ing consultative institutions and no matter how-
many new institutions we create, the basic
power relationship will remain unchanged. The
United States — a nation of 200 million people
with an $800 billion GNP— still must deal with
more than a dozen individual Western Euro-
pean countries whose power and wealth — no
matter how creative and productive they may
be — can never, except in the aggregate, match
ours.

Toward an Equal Partnership

This is, I believe, the cause of some of the
vexations which crop up to mar relations be-
tween us. For Western Europe is not prepared
to accept indefinitely the role of junior partner
in the transatlantic relationship.

ISTor, if I read the mind of America at all
accurately, is this what we want. The exercise
of power may, to some extent, have become a
habit. It may also be a habit not easily shed.
But I doubt that we have ever really been
happy with our lonely position as the free
world's dominant power. As a nation, we have
always felt more at ease with the give-and-take
of competition and compromise. Most of us
would far prefer the role of equal partner to
that of father confessor.

Together we have come far since the gi'im
days of the late forties. If we are to come out of
the next two decades as successfully as we did
the last two, both Europe and America must
accommodate to the changing times. Europe
must be prepared to assume a gi-eater share of
the responsibilities and costs of world leader-
ship. America must be willing to accept a less
dominant role within the alliance.

The greater share of the task must, at this
point, be Europe's. There must emerge a Euro-
pean entity unified enough to create the condi-
tions for its own development and strong enough
to deal with America as an equal.

The technological gap we have been hearing
so mucli about in the past year or two is a case in
point. Many Europeans are, quite legitimately,
concerned over the fact that Europe is falling
behind the United States in a broad range of
scientific, technological, and managerial fields.

Various suggestions on what can be done to
close the "gap" have been made, including pro-
posals for a technological Marshall Plan.

I personally doubt that we can do much more
than provide some marginal help in closing the
"gap." The real outcome depends on what
Europe can do to change its economic and
industrial structure— not what we give away.

Teclmology cannot be transferred from one
hand to another like money or commodities. An
industrial or scientific process given by the cre-
ator to another for his use is secondhand by
definition. A leading position on the frontiers
of teclmology is a measure of the creativity of
the society. Technological creativity today also
requires the mobilization of human and mate-
rial resources on a scale beyond the individual
capacity of smaller industrial states. It requires
research and development on a comparably
large scale. It also requires a modern, well-
supported system of education and modern
management techniques to use resources
efficiently.

If the technological gap is to be closed,
Europe must coordinate and pool its creative
energies more effectively.

Providing for Our Common Defense

A balanced partnership also means an equal
sharing of responsibilities.

Certainly this is true in the area of providing
for our common defense. Developments in weap-
onry, in commimications, and in the strategic
mobility of combat forces have drastically
changed the working hypotheses of our defense
planners. Increasing capabilities in intelligence,
and the mobility of reserves, broaden the options
of those who will do our strategic planning for
the 1970's. NATO has adopted a strategic con-
cept designed to achieA'e a posture of deterrence
to aggression at any level. Western Europe's
security must continue to be based on a system
of collective defense, with the United States
playing its part. Yet it is increasingly feasible
for Western Europe to assume a role in the com-
mon effort cormnensurate with its true potential.
An assumption of greater responsibility for the
planning and direction of the defense of Europe
by the Europeans themselves would be a healthy
evolution in the structure of our Atlantic alli-
ance. As Secretary Rusk indicated last Decem-
ber, we would welcome some form of European
defense organization permitting Western Eu-

170

DEPAETMENT OF STATE BULLETIN

rope to deal with us as a full NATO partner.^

Meanwhile, we must see that the costs of main-
taining American forces in Europe are not a
negative factor in the balance of payments,
while at the same time insuring that our com-
mon security interests are not endangered. Col-
lective defense requires a collective resolution of
the problem.

Over the past few years we have negotiated a
series of bilateral arrangements for partially
offsetting these costs. Now that our payments
position has become more serious we and our
European allies must — in our common inter-
est— seek to exjjand these arrangements. We
must also begin to explore together the possibili-
ties for finding multilateral means of neutraliz-
ing these balance-of-payments effects.

And what about Eastern Europe and the task
of healing what President Jolmson has called
"the woimd in Europe which now cuts East
from "West and brother from brotlier"' ? ^ There
are some, both here and in Europe, who argue
that if Europe is ever to be made whole again it
can best be done by reducmg American militai-y
strength on the continent and by slowing down
the pace of European integi-ation.

This is a view that neither we nor most of our
NATO allies can accept. We see no inconsist-
ency between moves to unify Europe and
strengthen NATO's defensive system and
moves to improve East-West relations. Cer-
tainly our experience with the Soviet Union
since the war has taught us that it can best be
dealt with from a position of strength.

We are not, of course, opposed to bilateral
dealings with the U.S.S.E. We have stressed
that we welcome them. We fully support, for
example, the German Federal Republic in its
efforts to improve relations with its Eastern
European neighbors.

But we do believe there should be constant
consultation — both within NATO and through
normal diplomatic channels — to insure that all
our efforts are coordinated. Without such co-
ordination the security interests of the West
might imwittingly be undermined in the race
to secure competitive advantage in dealing with
the Soviets.

' For an address made by Secretary Rusk on Dec. 2,
1967, .see ibid., Dec. 25, 1967, p. 8.5.5.

' For an address by President Johnson made at New
York, X.T., on Oct. 7, 1966, see ibid., Oct. 24, 1966,
p. 622.

Other — perhaps less jialatable — responsibili-
ties must also accompany equality.

It will come as a surprise to no one to hear
that the United States is deeply involved in
areas other than the European Continent. De-
spite the protestations of a vocal few, most
Americans accept this condition as one of the
responsibilities of jiower. But it is a responsi-
bility we are fully prepared to share with our
European friends.

Aid to Developing Nations

There is, first of all, our common obligation to
the world's poor.

If there is any certainty in this world, it is
that we must give hope to the poor that they,
or their children, will some day see the last of
tlieir age-old companions : hunger, poverty, and
disease. But the have-nots of this world will
not wait forever.

Europe and America have moved far in re-
cent years in dealing with this problem. There
is an increasing willingness to consiilt and co-
ordinate our aid to the developmg nations. But
we have really done little more than scratch the
surface.

The next few years will be critical. Both Eu-
rope and the United States must increase their
efforts to insure that progress in the developing
countries continues. We must find new solutions
to the transfer of technical and managerial
skills and knowledge. Private enterjirise and
multilateral aid mechanisms must be more ef-
fectively engaged in fostering development. We
must find new techniques for transferring capi-
tal without adding to the growing debt-service
burden of the developing nations. And we must
find new ways to improve their trade prospects.

The United States has made every effort, in
dealing with its balance-of-payments deficit, to
avoid actions which would adversely affect the
economies of the less developed. We thought it
only right that the developed countries, particu-
larly tliose in surplus, be called upon to make
the principal adjustments.

There is, as well, the difficult task of safe-
guarding the free world's security at points on
the globe far removed from both Europe and
America. It is here that Europeans seem, to
many Americans, to be insufficiently concerned.

The United States has no desire to police the
world or to be the only bulwark against aggres-
sion. It is terribly expensive and distracts us

FEBRUARY 5, 19 68

171

from other pressing domestic and international
problems. But the task of helping free nations
preserve their independence must be performed
if we are to build a stable and lasting peace.
It is a task we are fully prepared to share. We
hope Western Europe will be prepared to accept
a larger role in the future.

Eoles within the alliance are changing, and
with any cliange there is bound to be uncertainty
and discomfort. At the same time we are wit-
nessing the fruition of 20 years of devotion to
a principle and a belief: a principle which
holds that we have a common obligation and
responsibility to provide for the common de-
fense, a belief that by acting together we can
preserve the peace and better the lot of all man-
kind. In President Johnson's words :

Americans and all Europeans share a connection
which transcends political differences. We are a single
civilization ; we share a common destiny ; our future is
a common challenge.

Twenty years ago the United States acted
decisively on the common destiny we had long
since shared with the nations of the Atlantic
community. Behind our shield and with the
help of our resources, a shattered Europe built
anew a freedom and vitality unrivaled in its
history.

We have shared sacrifice. We have shared
hojie and fulfillment. I believe we share a com-
mon vision of the future. But it is together — and
only together — that we have the potential to
make that vision a reality. In the end, this is
what we are about in Europe. This is the mean-
ing of our irrevocable commitment.

U.S. and Israel Reaffirm Dedication to Peace in the Middle East

Prime Minister Levi Eshkol of Israel visited
President Johnson at the LB J Ranch at John-
son City, Tex., January 7-8. Following are an
exchange of greetings ietween the President and
the Prime Minister upon the latter's arrival at
Randolph Air Force Base, San Antonio, Tex..
on JanuaTy 7, their exchange of toasts at a
dinner at the ranch that evening, and a joint
statement issued at the close of their meetings
on January 8.

EXCHANGE OF GREETINGS

White House press release (San Antonio, Tex.) dated
January 7

President Johnson

Shalom. The traditional greeting of Israel
has very special meaning for all of us who have
come here today.

We meet here in peace, and we will talk in
peace. And we will try to extend the peace that
is m our hearts— extend it to all men who are
willing to share our partnership of good faith
and good purpose.

Mr. Prime Minister, we will be together for
only 2 short days. But they will be long days

full of friendship and full of happiness because
you have come here to be with us.

These, too, will be hopeful days, because this
land was born in that spirit — that spirit of
promise and opportunity.

Here in this land our neighbors work hand
in hand for the common good.

So, Mr. Prime Minister and Mrs. Eshkol, we
extend to you this afternoon the hand of wel-
come to this land. We hope its spirit refreshes
you after the long journey that you have taken.

I know that its hospitality will lift your
heart.

Mr. Prime Minister, we hope that you find
that peace, which all Americans are proud to
seek with you.

We are delighted to have you, sir.

Prime Minister Eshkol

Mrs. Eshkol and I are very happy to be here
as your guests.

Since 1964 we have with us fond memories
of our first meeting. We come to you in friend-
ship, and we know that friendship awaits us.

My central concern is peace — peace for my
country and for the area of the world in which
we live.

172

DEPARTMENT OF STATE BULLETIN

It was there in ancient days that men first
expressed a striving for peace on earth.

I will not ever give up the hope that this will
come to pass. We in our country are working
toward this end.

I know how much America is doing under
your leadership, Mr. President, to help the cause
of peace and justice in the world.

In the Biblical phrase: ShaJo7)i Vrachoh
y'Jekarov, which means: Peace be to him that
is far, and to him that is near.

Mr. President, it is a great pleasure to be
with you.

President Johnson

I know you people would want to meet Mrs.
Eslikol and Mi-s. Johnson.

Mr. Mayor [W. W. McAllister, Mayor of San
Antonio], Congressman [Henry B.] Gonzalez,
Congressman [Abraham] Kazen, and other dis-
tinguished public officials, all you ladies and
gentlemen, boys and girls : It is a cold afternoon,
but it is a warm welcome.

We are very proud of San Antonio and South
Texas for the wannth of j'our welcome.

Thank all of you so much.

EXCHANGE OF TOASTS
President Johnson

White House press release (San Antonio, Tex.) dated
January 7

Mr. Prime Minister, Mrs. Eshkol: Welcome
to our family table. We are honored and happy
to have you here in our home.

Here, we ask only that you enjoy the warm
ties of friendship and partnership that mean
so much to each of us and both our peoples.

Our peoples, Mr. Prime Minister, share many
qualities of mind and heart. We both rise to
challenge. We both admire the courage and
resourcefulness of the citizen-soldier. We each
draw strength and purpose for today from our
heroes of yesterday. We both know the thrill of
bringing life from a hard but rewarding land.

But all Americans — and all Israelis — also
Icnow that prosperity is not enough, that none
of our restless generation can ever live by bread
alone. For we are equally nations in search of
a dream. We share a vision and purpose far
brighter than our abilities to make deserts
bloom.

We have been born and raised to seek and
find peace. In that common spirit of our hopes,
I respect our hope that a just and lasting peace
will prevail between Israel and her neighbors.

This past year has been a busy one for Amer-
ica's peacemakers — in the Middle East, in Cy-
prus, in Viet-Nam. Wherever conscience and
faith have carried them, they have found a
stubborn truth confirmed. Making peace is pun-
ishing work. It demands enormous courage,
flexibility, and imagination. It is ill served by
hasty slogans or half -solutions. I know you un-
derstand this, sir, better than most men. One
of your ancestors said it for all men almost
two thousand years ago: "Other precepts are
performed when the occasion arises . . . but
for peace it is written, 'pursue it.' "

That is our intention in the Middle East and
throughout our world. To pursue peace. To find
peace. To keep peace forever among men. If we
are wise, if we are fortunate, if we work to-
gether— perhaps our nation and all nations may
know the joys of that promise God once made
about the children of Israel: "I will make a
covenant of peace with them ... it shall be an
everlasting covenant."

Let that be our toast to each othei- — our gov-
ernments and our peoples — as this new year be-
gins. Its days are brighter, Mr. Prime Minister,
because you lighten them with your presence
here and the spirit you will leave behind.

To our friends. Prime Minister and Mrs.
Eshkol, and to the people of Israel: Shalorn.

Prime Minister Eshkol

Mr. President, Mrs. Johnson : For Mrs.
Eshkol and myself this has been a wonderful
exjierience to be here as your guests at your
home in Texas. On our way here today we
saw again the vastness and variety of America.
But from the moment we met you we were
made to feel once more the warmth of your
friendship and the depth of your own view that
in terms of rights and duties all peoples are
equal: that they have equal right to be them-
selves and to be left in peace. I remember our
first meeting in 1964. I have carried the
memory of that with me. In the days of peril
I thought often of your friendship.

This great land of Texas reminds me very
much of parts of mj^ own country, though there
is, of course, no comparison in size. I can see
here the results of pioneering and dedication —

FEBRCART 5, 1968
2S7-972 — 6S

173

the beauty men can create when they are free.
The broadness of this place is matched by the
breadth of your miderstanding and the depth
of your friendship and the determination of
America, which you symbolize, to buttress
peace, to block its disruption by aggression,
and to enlarge the horizons of man's oppor-
tunity.

On a personal note, Mr. President, in the
nearly 4 years which have passed since I last
had the pleasure of meeting you, threefold
congratulations have been in order. Twice you
have ]3layed the role of father of the bride, and
now Mrs. Johnson and yourself have the joy
of your first grandson.

In drinking to your health I wish for Mrs.
Johnson and yourself all personal joy in the
years ahead and for your country the realiza-
tion of your dream of peace and human dignity.

Ladies and gentlemen: the President of the
United States.

JOINT STATEMENT

white House press release (San Antonio, Tex.) dated
January 8

President Jolinson invited Prime Minister
Eshkol to be his guest at the Texas AVhite House
on January 7 and 8, during the Prime Minister's
visit to the United States.

The President and the Prime Minister held
several meetings during which they discussed
recent developments in the Middle East as well
as a number of questions of mutual interest in
the bilateral relations between their two coun-
tries.

Tlae President and the Prime Minister con-
sidered the implications of the pace of rearma-
ment in the Middle East and the ways and means
of coping with this situation. The President
agreed to keep Israel's military defense capabil-
ity mider active and sympathetic examination

and review in the light of all relevant factors, in-
cluding the shipment of military equipment by
others to the area.

The President and the Prime Minister re-
stated their dedication to the establishment of a
just and lasting peace in the Middle East in ac-
cordance with the spirit of the Security Council
resolution of November 22, 1967.^ They also
noted that the i^rinciples set forth by President
Johnson on Jmie 19 ' constituted an equitable
basis for such a settlement.

The President and the Prime Minister noted
that under that Security Council resolution the
Secretai-y General of the United Nations has
designated Ambassador [Gumiar] Jarring as
his Special Representative. They also noted with
satisfaction that Ambassador Jarring is already
engaged in discussions with the govermnents
concerned and affirmed their full support of liis
mission.

The President and the Pi'ime Minister re-
viewed with satisfaction developments in the re-
lations between the United States and Israel
since their last meeting in 1964 and expressed
their firm iiitention to continue the traditionally
close, friendly and cooperative ties which link
the peoples of Israel and the United States.

Noting the mutual dedication of their gov-
ernments and people to the value of peace, re-
sistance to aggression wherever it occurs, indi-
vidual freedom, human dignity and the advance-
ment of man through the elimination of poverty,
ignorance, and disease, the President and the
Prime Minister declared their firm determina-
tion to make every effort to increase the broad
area of understanding which already exists be-
tween Israel and the United States and agreed
that the Prime Minister's visit advanced this
objective.

' For text, see Bulleti:^ of Dec. 18, 1967, p. 843.
' /fij(?., July 10, 1967, p. 31.

174

DEPARTMENT OF STATE BULLETIN

Viet-Nam and the Future of East Asia

hy WiZliain P. Bundy

Assistant Secretary for East Asian and Pacific Affairs '

The situation in South Viet-Nam is central
to the concerns of responsible men everywhere.
It is a situation behind which lies a complex
history of Communist covert subversion, overt
terrorism, and direct armed attack. It is a situa-
tion in which many interrelated factors — polit-
ical, military, economic, social — must be taken
into account, assessed, and acted ujDOn. As Am-
bassador Bunker put it 2 months ago in New
York : =

The problems in Viet-Xam are difficult. Viet-Xam is
many things : a combination of major military actions
and isolated incidents of terrorism, a mixture of polit-
ical subversion and the creation of representative
institutions, a blend of apathy and proud nationalism,
and a confrontation between the burgeoning aspira-
tions of a new nation and the stresses and strains
associated with its development.

In short, Viet-Nam i-epresents in an extraor-
dinarily acute and ditEcult form problems that
are common to Asia as a whole. I suppose none
of the re-emergent or new nations of the
woi'ld — and Viet-Nam is in the former cate-
gory— has had a more tragic history of colonial
rule and political failure in its early postcolonial
days. These factors have enormously com-
pounded the task to its present proportions.

Yet Viet-Nam — and the significance of our
stand there — must be seen in the wider context
of history and of Asia as a whole.

By virtue of geography the United States is
a Pacific power. While our traditions and cul-
tural underpinnings tie us closely to Europe,
we can no longer ailord to be less concerned
about developments in the Pacific than in the
Atlantic. At this point in history, nowhere are

' Address made before a foreign policy conference at
Miami. Fla., on Jan. 16 (press release 9).

' For an address made by Ellsworth Bunker, Amer-
ican Ambassador to the Republic of Viet-Nam, on
Nov. 17. 1967, see Buixetin of Dec. 11, 1967, p. 781.

the stakes higher than in Asia. The nations of
the area comprise two-thirds of the world's
population and are rich in natural resources.
Not long ago this point was luiderscored by 14
distinguished scholars of Asia, speaking, of
course, wholly for themselves. At a meeting in
Tuxedo, New York, A. Doak Barnett, Edwm
Reischauer, Robert Scalapino, Lucian W. Pye,
and 10 scholars of equal standing declared :

. . . the critical importance of the Asia-Pacific
region to the world as a whole, and the United States
specifically, must be recognized. Asia contains more
than one-half of our global population and encompasses
most of the major nations of today and tomorrow.
Socio-economic development or decay in this region will
have a decisive influence upon the peace and prcsperity
of the world. Equally important are basic questions
of a political character. Will a political equilibrium be
achieved in the Asia-Pacific region? Will peaceful co-
existence be accepted among states having different
political systems? Or shall we witness a rising cycle of
aggression, externally directed subversion, and thrusts
for hegemony within the region by individual powers
or power blocs? These questions bear heavily upon the
pro.spect for peace or war in our times.

Asia Today in the Historic Setting

Asia today is a tremendously exciting place
where historic change is taking place at a pace
and on a scale almost without precedent. The
essence of that story is, quite simply, that the
people of the area — always as innately talented
as any in the world — are finding themselves.

But a vital part of the story, too, is the influ-
ence in Asia of certain values and ways of
thinking that can properly be described as
Western and that in the eyes of Asians are
associated with particular force with the United
States. This is not primarily a matter of our
own policies, much less of anj'thing resembling
what is caricatured by some writers as a pax
Americana.

Rather, it is a broad historical process, on

FEBRUARY 5. 1968

175

■which I have frankly cribbed from the master-
ful "A World History" and "The Rise of the
West" of Professor William McNeill of Chi-
cago. The key conclusion he reaches is that the
interaction between the heirs of the historical
civilizations in Asia "on the one hand, and the
spate of Western innovations on the other, has
been and in the foreseeable future promises to
remain, a central axis, and perhaps the central
axis of mankind's history."

Professor McNeill finds four Western (and
American) values deeply at work in Asia :

First, there is nationalism itself — the cohesion
that comes with the emergence of an effective
national unit with which people can identify.
This propelling sense of nationhood has its
roots in the individual's realization that his
nation is a distinctive entity, unique and sep-
arate from other nations, and that the future
of his nation impinges directly upon his own
well-being. We have now gone a bit beyond that
in Eui-ope, as we seek to go beyond it through
the United Nations in a wider sense. But
nationalism was a key value in our own evolu-
tion and is certainly a key value in East Asia
today.

Second, there is the aspiration for, and
growth of, real popular participation and influ-
ence in government. This is a trend line — not
instant democracy or instant constitutions on
our or any other model. It is a trend line toward
the people having a voice in their government.
The evolution of political institutions that ac-
commodate broad-based political participation
tends to be a halting and uneven process. Yet
this should hardly surprise us if we reflect that
our own evolution toward democratic institu-
tions is still less than perfect after more than
700 years of struggle. And as we look at what
has happened in Asia in the historically minute
space of a generation or two, we can see both
the depth of the aspiration and a remarkable
degree of progress.

Third, there is an awareness of the possibility
of economic progress and a sense of the im-
portance of the sharing of the benefits of this
progress.^ Fundamentally, this is a belief that
progress is possible through pragmatic planning
and earnest endeavor and that progress whose
fruits are confined to the few is no enduring
progress at all.

And fourth, there is the application of scien-
tific invention to all pursuits, particularly to
the longrun welfare of the people. This keen in-
terest in devising ways of applying technology

ranges from the direct application of scientific
knowledge to the handling of complex enter-
prises and the planning of economic develop-
ment. In Asia today this is generally in the
embryonic and formative stage, with Japan as
a notable separate case.

I think these values are very deeply at work
in Asia today. The revolution — the real revolu-
tion— is a revolution heavily derived from the
West. And it is very much in our national in-
terest to assist that revolution to realize itself.
This is more than a sophisticated presentation
of the balance-of-power point of view. We are
in fact associated with something that the peo-
ple of Asia care about. In essence our national
mterest in a peaceful and progressive Asia is in
accord with Asian aspirations and hopes.

A decade ago we heard it argued that the
quickest route to economic development was by
firm central control in what amounted basically
to totalitarianism. The value of popular partici-
pation was to be sacrificed for that of economic
progress. Communist China was held up as the
example, but as we look back today we see that
something went wrong with this scheme. Wlien
the people of East Asia look at the state of af-
fairs in Commimist China today— its agricul-
tural difficulties and its internal dissent — they
find little to impress them. On the other hand, as
imperfect as the non-Communist nations of
Asia are politically and economically, their rec-
ord in the past 10 years has seemed to offer more
than has a system such as that enforced on the
mainland. And this is a very critical fact.

In terms of our national interest then, what I
am saying is that our deepest national interest
is to further Asia's own revolution — which is in
large part ours — and prevent its being aborted,
distorted, or taken over in the literal physical
sense by what is essentially a counterrevolution
that is not in tune with the trends of the times
or the aspirations of the people of East Asia.

Preventive and Positive Aspects of Our Action

It is in this very basic sense that our current
course in Viet-Nam is both preventive and posi-
tive. We act in Viet-Nam to prevent the North
from taking over the South by force, but we do
so with an awareness of what we are making
possible and with a vision of what Southeast
Asia left to itself can become. This is what wars
are about : to prevent disaster and to make pos-
sible constructive and progressive trends that
we would not otherwise see. War is in itself

176

DEPARTMENT OF STATE BULLETIN'

sterile and brutal — as none know better than
those holding the ground in Viet-Nam today. It
can be justified morally and politically only in-
sofar as it serves a major purpose in either the
preventive or the positive direction, and pref-
erably both.

On the preventive side, our presence in Viet-
Nam derives from four basic judgments that
have been shared by successive Presidents.
I The first is that Southeast Asia matters. Its

250 million people are entitled to develop as
free and independent nations in whatever inter-
national posture they wish, and this is the only
kuid of Southeast Asia that is compatible with
a peaceful future for Asia as a whole and for
wider areas.

Second, the nations of Southeast Asia are
individually threatened by the parallel and mu-
tually reinforcing ambitions of North Viet-Nam
and Commimist China. A North Vietnamese
takeover of the South by force would stimulate
these expanionist ambitions and weaken the will
and ability of the nations of Southeast Asia,
and indeed beyond, to resist pressure and sub-
version.

Tlurd, if South Viet-Nam were to be lost
through a failure on our part to fulfill the na-
tional commitment embodied in our whole
course of conduct since 1954 — including
SEATO — the effect on confidence in our com-
mitments in Asia and elsewhere could only be
very serious.

And fourth, a success of the Communist tech-
nique of "people's wars" or "wars of national
liberation" would undoubtedly have the effect
of encouraging the extremist line of thought
among Communist nations. It might thus undo
the more promising trends that have developed
in recent years in the Soviet Union and Eastern
Europe, and this could seriously affect the
Middle East, Latin America, Asia, and even
Europe.

On the positive side of our effort in Viet-
Nam, we act to encourage the many signs of
stability, security, and development that are ap-
pearing in East Asia today. We act to help se-
cure an enviroimient in which these trends can
continue unimpeded by the threat of interfer-
ence by expansionist powers.

One need only look at the progress being
made by the nations of Northeast Asia in the
economic field to get a glimpse of what can lie
ahead for all of East Asia. Economic growth,
spurred by capable and realistic planning, has
been accelerating at a faster pace than could

have been predicted only a few years ago. The
economic success stories in the North Pacific
area are numerous and impressive. Japan, South
Korea, and the Republic of China have shown
what can be done in a climate of confidence.

Japan is now the third economic power in the
world. Reachuig out into Asia and beyond,
Japan has achieved one of the highest growth
rates in the world in terms of both GNP and
international balance of payments. And Japan
is playing an impressive and gi-owing role in
economic assistance to the rest of Asia and in
its participation in regional initiatives.

South Korea, devastated by conflict to a de-
gree far beyond anything that has happened in
Viet-Nam, had great difficulty for many years.
But from the early 1960's on, it has taken hold
of its affairs, carried through genuine elections,
and begim to make dramatic economic progress.
Today, South Korea has worked out its prob-
lems with Japan — one of the deepest historic
antagonisms in the area — is proudly contribu-
ting nearly 50,000 men to the defense of South
Viet-Nam, and was the host to the initial meet-
ing of the ASPAC [Asian and Pacific Council]
grouping of 10 Asian nations.

Tlie Republic of China, on Taiwan, beat back
a Communist threat to the offshore islands in
1958 and on the economic side carried out sound
and effective policies, including land reform,
making possible the termination of U.S. eco-
nomic assistance programs. By 1961 the Repub-
lic of China began a small but still very signifi-
cant program of technical assistance in agricul-
ture to Africa, Asia, and Latin America. So the
Republic of China, too, is reaching out to jslay
a constructive role.

Developments in Northeast Asia have demon-
strated what can be achieved when security is
assured. In Southeast Asia, the situation is more
difficult: the nations are less developed and the
threat from North Viet-Nam and Commimist
China is more imminent. Yet one can already
see that our presence there is helping to secure a
setting in which the people of the area can begin
to develop their own vast potential.

Three of the more promising cases in South-
east Asia are Thailand, IMalaysia, and Singa-
pore, Thailand's annual growth rate has
averaged 7 percent annually over the past 10
years, and projections indicate that rate will be
sustained. While the problem of insurgency in
the northeast is disturbing, it is receiving the
alert and effective attention of the Thais
themselves.

FEBRUARY

1968

177

Singapore and IMala3'sia, next to Japan, enjoy
the higliest per capita, incomes in Asia. They are
attempting to diversify their economies and at
the same time trying to create a true multina-
tional society tlirough democratic processes.

Beyond these three cases, one must look at the
recent turn of events in Indonesia. Just a few
years ago it appeared that Indonesia was surely
headed down the Communist path: Sukarno's
nationalism was becoming more and more ex-
treme and hostile and had led Indonesia into a
dangerous confrontation with Malaysia. Then
in October 1965 an ill-timed and poorly executed
coup attempt by the Communists backfired and
brought into being the current strongly nation-
alist and non-Communist government.

"VVliat happened in Indonesia was, above all,
the work of heroic and dedicated non-Com-
munist nationalists. I am quite sure that had we
not stood firm in Viet-Nam in 1965 — and had
Viet-Nam thus been rapidly on the way to a
takeover by force from Hanoi, as would surely
have been the case — Aidit and company would
not have needed to force their luck and the
morale of the non-Communists would not have
been equal to the very tight struggle for power
that ensued for the next 6 months. Hence, it is
the widely accepted judgment in the area —
which I share — that the dramatic change in
Indonesia would have been far less likely, if not
impossible, without the stand that we and others
took in Viet-Nam.

Accompanying these developments in East
Asia, is the trend toward regional cooperation
that is emerging. One can cite the Asian De-
velopment Bank, the Asian and Pacific Council
of 10 nations, the Mekong River Committee,
and the creation in Indonesia of a new multi-
lateral framework for aid that could have im-
mense future significance.

Symptomatic of these trends in East Asia to-
day is the demise of neocolonialism as an ideo-
logical peg upon which new nations can pin
tlieir hopes and justify their frustrations. Two
or three years ago the idea still had active ap-
peal ; today it is virtually dead. This new will-
ingness to accept partnership in a working
relationsliip with others is a lugldy significant
development in the long nm. And such partner-
ship is the only relationship that we and others
see that makes sense.

In short, the people of East Asia are on the
move as never before. It is in our fundamental

national interest to prevent a miscarriage of j
this trend and to help provide the setting in
which a true revolutionary trend can be realized. I

A Climate of Confidence [

Let me conclude by noting that this whole i
tie between security and progress comes down i
to the factor of confidence : confidence that one's I
nation-state will retain its own integrity, con- |
fidence that any active voice may make itself |
heard somewhere in the governmental process, \
confidence that economic progress can be i
achieved and will not be confined to the few,
and confidence that available technology will be
applied to the well-being of all.

This is the key to the future of East Asia. By
our presence in Viet-Nam and our concern for
the security of Southeast Asia — as of Northeast
Asia over the years — time has been bought for
Asia. Asian leaders from Tokyo to Tehran are
generally in sympathy with our policies in Asia.
Only recently Prime Minister Sato of Japan
made an extensive tour of the area. He reported
on it m a speech before the National Press Club
at Washington on November 14 :

I was deeply impressed during my recent trip that the
United States efforts in Viet-Nam were well understood
and appreciated by the governments and peoples of the
Asian countries. I found that they clearly understood
that, if the United States loses interest in Asia at the
present time, not only the peace and security of Asia
but also the future of the world would be in serious
jeopardy.

An imderstanding of the interrelationship be-
tween security and jDrogi-ess is crucial to an ap-
preciation of our stand in Viet-Nam today and
its bearing upon the future of all Asia. To quote
the 14 scholars again :

Let us cease defining and defending American foreign
policies in grossly oversimplified terms. Our people can
cope with complexity if given the chance. Let us also
desist from the excessive spirit of mea culpa which per-
meates certain quarters of American society. On bal-
ance, our record in the world, and in Asia since World
War II, has been a remarkably good one, worthy of
support.

Virtually without exception, leaders and re-
sponsible opinion in East Asia share our view
that the struggle in Viet-Nam is crucial to the
independence of each individual nation and to
its ability to work for the welfare of its own
people. The climate of confidence in Asia to-
day— to which all objective observers attest —

178

DEPARTMENT OF STATE BULLETIN

derives in large part from the progress tliat
Asian nations themselves have demonstrated.
Yet crucial to that climate has been the sense
of security. And I would add that only an honor-
able and secure peace in South Viet-Nam can
preserve that climate.

Our objective in Viet-Nam is deceptively
simple. President Jolinson stated it at Jolms
Hopkins on April 7, 1965 : ^

Our objective is ttie independenre of South Viet-Nam
and its freedom from attack. We want notliing for
ourselves — only that the people of South Viet-Nam
be allowed to guide their own country iu their own
way.

The stakes are grave indeed. But behind this
objective lies the hard calculation that our
national interest is very much on the line and
that that national interest is at one with the
desires and hopes of the people of the area
themselves.

National Review Board Appointed
for East-West Center

Press release 12 dated January 19

The Secretarj- of State announced on Jan-
uary 19 the apjx)intment of the 15 members of
the National Review Board for the Center for
Cidtural and Technical Interchange Between
East and West.

Reappointed to the National Review Board
were:

Governor John A. Burns of Hawaii, the Board's first
chairman

• IMd., Apr. 26, 1965, p. 606.

Father Laurence J. McGinley, vice president, Saint

Peter'.s College, Jersey City, N.J.
Hung Wo Ching, chairman of the board of directors,

Aloha Airlines
Roy E. Larsen, chairman of the executive committee,

Time, Inc.
Mary W. Lasker, president, Albert and Mary Lasker

Foundation
Otto N. Miller, chairman of the board, Standard Oil

Company of California
Logan Wil.son, president, American Council on

Education

New appointments mcluded :

C. C. Cadagan, former chairman of the board of re-
gents. University of Hawaii

James H. McCrocklin, president, Southwest Texas
State College

Paul A. Miller, Assistant Secretary for Education,
Department of Health, Education, and Welfare

Edward Nakamura, chairman of the hoard of regents.
University of Hawaii

William S. Richardson, Chief Justice of the Supreme
Court of Hawaii

John D. Rockefeller III

Ambassador William Matson Roth, Special Repre-
sentative for Trade Negotiations

Joseph R. Smiley, president, University of Colorado

The National Review Board was established
in February 1965 to represent the national in-
terest in reviewmg the programs and operations
of the East- West Center and advising the Secre-
tary of State with regard to this program of the
Government in the field of international
education.

The East- West Center, which is located on
the campus of the University of Hawaii in
Honolulu, was established by congressional
legislation in 1960 to promote better relations
and understanding between the United States
and the nations of Asia and the Pacific through
cooj^erative study, training, and research. The
Center provides grants, mainly to graduate stu-
dents, to implement these expressed purposes
and objectives.

FEBRUARY 5. 1968

179

The Work of the United Nations During the 22d General Assembly

Tlve 2£d session of the United Nations General Assembly adjourned
on December 20. On December 22 the United States Mission to the
United Nations issued the follotoing summary of develoj)ments dur-
ing the session, both in the Assembly and in the Security Council,
which are significant from, the U.S. viewpoint. To introduce the
summary, the Mission included a statement made by U.S. Representa-
tive to the United Nations Arthur J. Goldberg at the opening of a
news confe7'ence on December 20.

U.S./T-i.N. press release 256 dated December 22

STATEMENT BY AMBASSADOR GOLDBERG

Looking back on the year 1967 at the United
Nations, inchiding the General Assembly ses-
sion just adjourned, certain salient impressions
emerge — some encouraging and others discour-
aging.

On the encouraging side, despite disappoint-
ing delays we strongly hope that a complete
treaty against proliferation of nuclear weapons
will be ready for consideration by the Assembly
at a resumed session early next year. This is the
number-one priority in the arms control field.

Also, the General Assembly has taken im-
portant actions to extend the rule of law in
the unfamiliar realms of outer space and the
ocean beds. These steps help to assure that our
rapid technological progress is ruled by law,
not ruined by anarchy.

In addition, many important nonpolitical
programs and projects of the United Nations-
economic, social, humanitarian, legal, and tech-
nical— continue and have been further devel-
oped. These, too, are a major part of the fabric
of peace, one whose importance to the world
must never be underestimated.

But all these efforts must be seen within the
critical context of the United Nations per-
formance in the realm of peace and security.
In that all-important field, the year 1967 shows
both major achievements and grave short-
comings.

There is increasing evidence, particularly in

the U.N.'s actions in dangerous areas of conflict
such as the Middle East and Cyprus, that it still
has the vital capacity to achieve cease-fires and
other devices against large-scale violence. But
it has yet to show the capacity to deal with the
underlying grievances and pressures from
which these conflicts erupt.

The world community must make real peace
settlements to relieve these pressures. This is
the major future challenge to the United
Nations — and hence to us, its members, who
hold the U.N.'s fate in our hands.

We cannot be content simply to "keep" what
peace we have and restore it when it is broken.
We must devote our highest statesmanship to
building the peace which we do not yet have.
The United Nations this year has again
demonstrated its capacity for peacekeeping. It
has still to show equal capacity for peacemak-
ing. Failing this, the world coimiiunity and all
its members, strong and weak alike, will remain
dangerously insecure.

SUMMARY OF UNITED NATIONS ACTIONS
DURING 22d GENERAL ASSEMBLY

Security Council

Middle East

Probably the most important single United
Nations action during this period was the
Security Coiuicil's unanimous Kesolution 242 of
November 22 setting in motion steps toward "a

180

DEPARTMENT OF STATE BULLETIN

just and lastinf^ peace"' in the Middle East.^
Although the situation in the Middle East was
on the General Assembly's agenda, it was again
the Security Council that dealt with it, as it had
done during the critical weeks in May and June.
Resolution 242 asked the Secretary-General
to appoint a Special Representative, whose task
would be to assist the parties to achieve a peace-
ful settlement in accordance with the following
principles: the withdrawal of Israeli forces
from territories occupied in the June conflict;
the tennination of claims or states of bellig-
erency; respect for and acknowledgment of
the sovereignty, territorial integrity, and politi-
cal independence of every state m the area, as
well as their right to live in peace within secure
and recognized boundaries; guarantees of
freedom of navigation through the area's
international waterways and of the territorial
inviolability of every state in the area, through
measures including the establishment of demili-
tarized zones; and a jnst settlement of the
refugee problem. The resolution, sponsored by
the United Kingdom, was the end product of
lengthy and delicate negotiations among the
members of the Council and the parties to the
conflict.

Acting pursuant to this resolution, the
Secretaiy-General has appointed as Special
Representative a distinguished Swedish diplo-
mat, Ambassador Gunnar Jarring, who has now
I begun his work in the Middle East.
I This resolution may be a major step toward
' the long-sought goal of real peace in the Middle
East, the kind of step for which the United
States has labored incessantly since the cease-
fire in June. Although the text is not perfect —
notably in ignoring the need to limit the arms
race in the area — the mandate it gives to the
Special Representative is sound and is without
, prejudice to any party. It is sufficiently respon-
' sive to the interests of all parties so that they
should 1)6 able to receive and cooperate with
him. The United States was happy to join in the
imanimous vote for this resolution ancl to pledge
our diplomatic and political influence in support
of the Special Representative's efforts.

A month earlier, on October 25, the Secuinty
Council met in response to two serious violations
of the cease-fire — the sinking of an Israeli
destroyer and the bombardment of U.A.R. oil

facilities. It impartially condemned both viola.-
tions and strongly reaffirmed its previous cease-
fire demands.- Shortly thereafter the Secretary-
General took action, which the United States
supported, toward more effective U.N. observa-
tion of the cease-fire in the Suez Canal sector.

Viet-A^am

xVgainst the United Nations important
achievements for peace in the Middle East dur-
ing 1967 must be set its continued inability to act
for peace in Viet-Nam.

Speaking for the United States in the Assem-
bly's general debate in September, Ambassador
Goldberg reiterated this country's strong belief
that the United Nations must, under the charter,
actively participate in the quest for peace in
Viet-Nam.^ He appealed once again to all mem-
bers to use their influence to that end. He also
made clear our unchanging commitment to a
political rather than an imposed military
solution.

Although deep anxiety over Viet-Nam wiis
widely expressed in the general debate, the
United Nations proved still unable to give sub-
stantive consideration to the matter, which was
inscribed at United States initiative on the
agenda of the Security Council in February
1966.

This failure has been deeply disappointing to
the United States. In fairness to the United
Nations, it must be accounted a failure not of
the organization but of certain key members and
govermnents, particularly two permanent mem-
bers of the Security Council, the Soviet Union
and France, which, together with North Viet-
Nam, have repeatedly and flatly opposed United
Nations involvement in the matter. Some other
Security Council members have proved reluc-
tant to see the Council take up Viet-Nam in tlie
face of this adamant attitude.

On several occasions before and during the
General Assembly, the United States again con-
sulted with other members on a possible renewal
of Secvirity Council consideration of Viet-Nam.
Such consultations were held during the Tet
bombing pause in January 1967; shortly before
the Assembly met for its regular session ; and in
December, following the Senate's passage of the

* For U.S. statements and text of the resolution, see
Bulletin of Dec. 18, 1967, p. 834.

' For U.S. statements and text of a re.solution adopted
by the Security Council on Oct. 25, 1067, see ibid., Nov.

20, 1967, p. 690.

' For a statement by Ambassador Goldberg on Sept.

21, 1967, see ibid., Oct. 16, 1967, p. 483.

FEBRUARY 5, 1968

181

Mansfield resolution/ On none of these occasions
did we find any change of attitude by those op-
posing United Nations involvement.

Cyprus

During the crisis over Cyprus in November
and December, the Security Council and the
Secretary-General, with the active support of
the United States, played an important part in
helping to avert a major conflict in that area and
in opening new possibilities for progress toward
a long-overdue settlement of the underlying
problems.

The serious incidents on Cyprus in mid-
November brought Greece and Turkey close to
armed conflict. This dangerous sitiuxtion was
de-fused by diplomatic steps which included
two appeals to Greece, Turkey, and Cyprus by
Secretary- General U Thant; a consensus by the
Security Council strongly supporting these ap-
peals; and the diplomatic initiatives by Presi-
dent Jolmson, Secretary-General Thant, and
the Secretary General of NATO, Manlio Brosio.

The resulting efforts, particularly those of
Cyrus Vance, the President's personal repre-
sentative, produced agreement on steps by
Greece and Turkey to move back from the
brink of war. These steps, in turn, were greatly
facilitated by a third appeal from the Secre-
tary-General on December 3, requesting Greece
and Turkey to end all threats to the security of
each other as well as of Cypras and to withdi-aw
expeditiously all forces in excess of their respec-
tive contingents in Cyprus. The Secretary-
General also offered his good offices for the
future role and fmiction of the United Nations
Force in Cyprus (UNFICYP) .

In the current consideration of Cyprus in the
Security Council, we hope to see the Coimcil
not only extend the life of UNFICYP for
another 3 months but also support the offer of
good offices made by the Secretary-General.^

The Congo

In mid-November the Security Council, con-
fronted with a new incursion of armed mer-

cenaries into Congolese territory, was again ap-
parently instnmiental in halting this practice.
The Congolese Government charged that armed
mercenaries had entered its Province of Ka-
tanga from Angola in an attempt to overthrow
the established order in the Congo.

The United States joined m a consensus of the
Council on the text of a draft resolution —
adopted without objection on November 15 —
which condemned Portugal's failure, in viola-
tion of previous Council resolutions, to prevent
mercenaries from using Aiigola as a base of
operations for armed attacks against the Congo,
and called on all countries receiving merce-
naries to i^revent them from renewing their
activities against any state.^

No incursions of mercenaries into the Congo
have been reported since the adoption of this
resolution.

^'■Micro-States'''

Late in the year the United States took action
to focus the attention of the Security Council
on a problem related to the great strides made
in decolonization in recent years — that of the
relation to the United Nations of "micro-states"
which are too small to be able to meet the obliga-
tions of membership or to contribute effectively
to the work of the United Nations.

The Secretary-General, in his introduction to
his 1967 annual repoi't, had suggested that the
time might "be opportune for the competent
organs to midertake a thorough and comprehen-
sive study of the criteria for membership in the
United Nations with a view to laying down the
necessary limitations on full membership while
also defining other forms of association which
would benefit both the 'micro-States' and the
United Nations."

In a letter dated December 13,' Ambassador
Goldberg requested the President of the Secu-
rity Council to consult members about recon-
venmg the Council's long-dormant Committee
on the Admission of New Members to consider
this matter and to provide the members and the
Council with appropriate information and
advice.

* S. Res. 180, 90th Cong., 1st sess.

"For a U.S. statement and test of a resolution
adopted by the Security Council on Dec. 22, 1967, see
Bulletin of Jan. 8, 1068, p. 95.

' For test of the resolution, see ibid., Dec. 11, 1967,
p. 808.

' For test, see iUd., Jan. 29, 1968, p. 159.

182

DEPARTMENT OF STATE BULLETIN

22d SESSION OF GENERAL ASSEMBLY

items Considered Directly by Plenary

Chinese Representation

The General Assembly once again rejected
the perennial Albanian resolution to expel the
Eepublic of China and to seat representatives
of Conmnmist China in the United Nations. The
vote was 58 to 45, a wider margin than in 1966.
The Assembly also reaffirmed by 69 to 48^ — again
a wider margin than last year — the validity of
its 1961 decision that any proposal to change the
representation of China in the United Nations
is an important question requiring a two-thirds
vote for adoption.*

The United States again supported, as we did
last year, an Italian resolution calling for a
study committee to examme the problem of
Chinese representation in the U.N. This resolu-
tion was not adopted.

Admission of New Member

With the coming to independence on Novem-
ber 30 of the People's Eepublic of Southern
Yemen, fonnerly mider British sovereignty, the
General Assemblj* removed from its agenda a
longstanding colonial problem, the Aden ques-
tion. On December 14 the General Assembly
admitted Southern Yemen as the 123d member
of the United Nations.^

Agenda Items Allocated to Committee I

Agreement on Astronauts and Space Vehicles

An important supplement to the Outer Space
Treaty — the Agreement on the Rescue of Astro-
nauts, the Return of Astronauts, and the Retui-n
of Objects Launched into Outer Space — was
completed in mid-December by the United Na-
tions Conuuittee on Outer Space and was
promptly approved by the General Assembly.'"

'For ii r.S. statement and texts of a resolution
adopted by the Assembly on Nov. 28, 1067, and a draft
resolution rejected by the Assembly that day, see ihid.,
Dec. IS. 196T, p. 829.

"For a U.S. statement in the Security Council on
Dec. 12 on the application of Southern Yemen for U.N.
membership, see ihid., Jan. 8, 1968, p. 6.5.

'° For text of the agreement, see ihid., Jan. 15, 1968,
p. 87.

This humanitarian agreement resulted from
5 years of work in the Outer Space Committee,
culminating in intensive negotiations at the
United Nations this past autumn. It provides,
among other things, for notification to a launch-
ing authority if one of its astronauts lands
under emergency conditions; all possible steps
to rescue astronauts who have landed elsewhere
than planned; assistance in rescue eflorts on the
high seas; safe and prompt return of astro-
nauts; and notifications and return of objects
launched into outer space which reentered the
earth's atmosphere.

The agreement will enter into force upon the
deposit of instruments of ratification by five
govermnents, mcluding the United States, the
U.S.S.E., and the United Kingdom.

As Ambassador Goldberg said in the General
Assembly on December 19 : ^^

This agreement bears witness to the fact that the
United Nations can make a real contribution to extend-
ing the rule of law to new areas and to insuring the
positive and peaceful ordering of man's efforts in sci-
ence and the building of a better world.

The Deep Ocean and Its Floor

The General Assembly tliis year took an im-
portant step concerning the exploration and use
of the deep ocean and its floor — a realm of great
and growing significance to man.

The Assembly's action took the form of a
resolution creating an ad hoc committee to study
the scientific, technical, economic, legal, and
other problems involved in U.N. action on the
seabeds and directing tliis committee to submit
its report to the 23d General Assembly next
year.^- We hope this report will lead to the
establishment by the Assembly of a committee
on the oceans with a broad mandate to develop
international law and promote international co-
operation with respect to the ocean and the
ocean floor.

The United States strongly supported this
step. We believe that the prospects of rich har-
vest and of mineral wealth in the deep ocean
and on its floor must not be allowed to create a
new form of colonial competition among marine
nations; that the nations of the world should
take steps to assure that there will be no race

" Ihid., p. 83.

" For a U.S. statement and text of a resolution
adopted on Dec. 18, 1967, .«ee ihid., Jan. 22, 1068, p. 125.

FEBRUART 5, 1968

183

among: nations to grab and hold lands under the
high seas; and that the deep ocean floor should
be open to exploration and use by all states,
without discrimination. The United States
stands ready to join with all other nations to
achieve these objectives in peace and under law.

Nowproliferation of Nuclear Weapons

Disappointing delays in the Geneva negotia-
tions for a treaty against proliferation of nu-
clear weapons — the current number-one priority
in the arms control field — made it impossible
for the negotiating powers to present, as had
been hoped, a complete treaty text to the Gen-
eral Assembly for its approval before ad-
journment in December. Because of the great
importance of this project, the Assembly there-
fore asked the Eighteen-Nation Disarmament
Committee to report on its negotiations as soon
as possible and not later than March 15, 1968, in
the hope that a complete treaty may be ready
for consideration at a resimied session of the
22d General Assembly.

At the same time, the General Assembly also
wisely decided that the planned conference of
non-nuclear-weapon states should be postponed
until August 1968 in order not to interfere with
the Assembly's consideration of the nonproMf-
eration treaty.

We strongly hope that the ENDC will
quickly conclude its work on the nonprolifera-
tion treaty and that the General Assembly will
thus be enabled to meet in resumed session after
the report of the ENDC has been received to
consider and approve this extremely important
treaty.

Latin American Nuclear-Free Zone

The General Assembly noted with satisfac-
tion that 21 Latin American nations had signed
a treaty making their continent a nuclear-free
zone, and called upon all states to help insure
its observance. The United States hopes that
this nuclear-free zone will soon become effective
and that all nuclear powers will respect it.

Korea

Again this year, the General Assembly deci-
sively turned back an attempt led by the Soviet
Union to end the U.N.'s responsibilities in
Korea.

Resolutions were introduced, and supported

with propaganda efforts of unusual vigor, call-
ing for the dissolution of the United Nations
Commission for the Unification and Rehabilita-
tion of Korea (UNCURK) and for the with-
drawal of all United Nations forces from Korea.
In Committee I the move to dissolve UNCURK
was defeated by a vote of 60 to 24 ; and the pro-
posal to withdraw U.N. forces, by a vote of 59
to 24.

In addition to successfully opposing these
moves, the United States and 14 other countries
offered a resolution reafRrming United Nations
objectives and responsibilities in Korea.^^ The
Assembly adopted this proposal by a vote of 08
to 23.

Agenda Items Allocated to Special
Political Committee

U.N. Peaceheefing Operatioiis

The vitally important problem of strength-
ening the U.N.'s peacekeeping capacity was re-
manded by the General Assembly this year to
the Committee of 33. Some promise of progi'ess
is discernible in that the Secretariat will assist
in studying ways to improve the readiness of
members to provide the U.N. with men, facili-
ties, and services for peacekeeping. We are
hopeful that this may provide the needed trac-
tion to move ahead in this area. Meanwhile,
peacekeeping possibilities must be tested case
by case and will continue to require the acquies-
cence of all big powers and the necessary politi-
cal and financial backing.

A major disappointment was the continued
failure of the Soviet Union and France, both
of which have refused to jiay past peacekeeping
assessments, to make the substantial voluntary
contributions which were expected on the basis
of the consensus reached in 1965. Without these
promised contributions, the financial health of
the U.N. remains precarious and its ability to
imdertake further peacekeeping operations is
seriously weakened.

XJNRWA and Middle East Refugees

As in previous years, a resolution dealing with
the work of the U.N. Relief and Works Agency

"For a U.S. statement and text of a resolution
adopted b.v tlie As.seaibly on Nov. 16, 1967, see ihid..
Dee. IS, 19G7, p. 844.

184

DEPARTMENT OF STATE BULLETIN

for Palestine Kefugoes in tlie Near East
(UNKWA) and aj^pealing for its continued
sui)port was introduced b}- the United States
and passed by the Assembly. The Assembly also
approved, again with the support of the United
States, a Swedish resolution calling for con-
tinued humanitarian assistance to the new refu-
gees uprooted by last summer's conflict and
again calling upon Israel to facilitate the re-
turn of those inhabitants who had fled the areas
under its control since the outbreak of hostilities.
A resolution calling on the U.N. to appoint a
custodian to administer and receive income on
beJialf of Arab refugees on projserty they left
behind in Israel barely obtained a simple ma-
jority in the Special Political Committee. It
clearly did not have enough support for adop-
tion in the General Assembly and was not put
to a final vote. The United States had opposed
this resolution, believing that it raised serious
problems relating to state sovereignty and the
authority of the U.N. and that its adoption
could jeopardize the success of the peacemaking
mission of Ambassador Jarring in the Middle
East.

Agenda Items Allocated to Committee II

I nteimational Education Year

Acthig on a United States proposal cospon-
sored by 24 membei's, the Assembly i^rovision-
ally designated 1970 as International Education
Year and requested the Secretary-General, in
consultation with the United Nations Educa-
tional, Scientific and Cultural Organization
(UNESCO) and other specialized agencies, to
develop plans looking toward its observance."
In taking this action the Assembly recognized
the close relationship between education and
development and the desirability of emphasiz-
ing education as the international community
moves into the period after the present Develop-
ment Decade.

The resolution followed upon President
Jolmson's call for such a year at the Interna-
tional Conference on the World Crisis in Edu-
cation held at Williamsbui-g, Va., in October
1967."

" For a U.S. statement and text of a resolution
adopted on Dec. 1.3. 1967, see ihid.. Jan. 29, 1968, p. 1.56.
■^ Ihid., Oct. 30, 1967, p. 569.

Multilateral Food Aid; Protein Program

The Assembly adopted a constructive resolu-
tion on food aid. The resolution, of which the
United States was a prmcipal sponsor, stressed
the need for coordination of food aid programs
and called for a review to determine whether ex-
isting multilateral arrangements could handle
an increased volume of food aid.

In a related action, the Assembly took account
of a serious deficiency not only in the quantity
of food available to developing countries but
also in its quality. It accepted the conclusion
of the Committee on the Application of Science
and Technology to Development that there is
a protein deficiency of alarmmg proportions in
the developing countries, that this protein de-
ficiency is becoming greater, and that it will
have increasingly adverse effects on the physical
and mental development of children in many
countries. The Assembly welcomed the commit-
tee's proposals to deal with this problem and
referred them to governments and appropriate
international agencies for implementation.

Capital Developmsnt Fund

There was only minimal response to the
appeal for contributions to a U.N. Capital De-
velopment Fimd, which was voted last year over
the opposition of major capital-exporting
countries including the United States; only
about $1.5 million, mostly in nonconvertible
funds, was pledged. The Assembly asked the
Administrator of the U.N. Development Pro-
gram to administer the Fund, an action opposed
as unsound by the United States and many other
capital-exportmg countries.

Agenda Item Allocated to Committee III

Human Rights

A major accomplishment of this year's Gen-
eral Assembly in the field of human rights was
the imanimous adoption of the Declaration on
the Elimination of Discrimination Against
Women. The United States considers this a
satisfactory declaration which should encourage
freedom and opportunity for women in many
parts of the world.

Unfortunately, little other progress was made
in the human rights field, chiefly because of
lengthy and acrimonious debate on the draft
Convention on the Elimination of Religious In-

FEBRUART 5, 19 68

185

tolerance. Although anti-Semitism was specifi-
cally condemned in draft article VI of this con-
vention as recommended by the Human Rights
Commission, the Social Committee decided
against mentioning any specific example of re-
ligious intolerance in the convention. Of the
entire text it voted approval of only the pre-
amble and article I. The preamble, which sets
the framework for the drafting of subsequent
articles, was so changed by the committee from
its original emphasis on the protection of re-
ligious freedom that the United States was no
longer able to support it.

Agenda Items Allocated to Committee IV

Colonial and Racial Issues in Southern Africa

Regrettably, again this year the Assembly, in
attempting to deal with colonial and racial
problems in southern Africa, adopted several
resolutions which, however sound in purpose,
were unsound in method and which the United
States accordingly could not support. This
applies specifically to the major resolutions on
South West Africa, Southern Rhodesia, the
Portuguese territories, and apartheid. All called
for sweeping measures within the sphere of the
Security Council — measures which have little
prospect of implementation. Such impractical
demands only serve to diminish the prestige of
the General Assembly.

The United States again made clear its un-
swerving opposition to colonialism and racial
discrimination in southern Africa in all its
forms. We remain convinced, however, that the
best hope for progress against these evils lies
in action which is intrinsically sound, widely
supported, and within the capacity of the
United Nations to carry out.

The United States emphatically supported
and cosponsored a related resolution ^'^ dealing
with an important aspect of the South West
Africa problem: the current trial in Pretoria
of 37 South West Africans under the Terrorism
Act. The resolution rightly condemns the appli-
cation of this South African statute to South
West Africa as a violation of the international

" For a U.S. statement and text of Resolution 2324
(XXII) adopted by the Assembly on Dec. 16, 1967 see
ibid., Jan. 15, 1008, p. 92.

status of the territory and calls on South Africa
to release the prisoners.

Nauru

By its resolution on the Trust Territory of
Nauru m the South Pacific, the 22d General
Assembly decided to end one of the three re-
maining United Nations trusteeships estab-
lished in the organization's first years. (The two
still remaining are New Guinea, under Aus-
tralian administration, and the Trust Territory
of the Pacific Islands, under U.S. administra-
tion.)

The resolution notes that the administering
authority of Nauru (the Governments of
Australia, New Zealand, and the United King-
dom) had agreed to meet the request of the
representatives of the people of Nauru for
independence. It further provides that the
trusteeship agreement will be terminated in
order to permit Nauru's accession to independ-
ence on January 31, 1968.

Agenda Items Allocated to Committee V

Improved U.N. Financial Management

A major accomplishment of the General
Assembly this year was the adoption of a United
States proposal, cosponsored by the four major
contributing powers (the U.S., U.S.S.R., U.K.,
and France) , to introduce a "planning estimate"
procedure in the budgetary process of the
United Nations.

This procedure will give the Secretary-Gen-
eral financial guidance for planning his budget
for the year following the annual budget which
the Assembly approves each year. It will thus
permit the Assembly to give the Secretary-
General an advance indication of the budgetai-y
level that the members of the U.N. are prepared
to support. It is not intended to set a ceiling or
fix a rate of growth for the U.N. ; it is, however,
designed to assure that the U.N. will make the
most efficient use of the resources available to
it.

U.N. Personnel Questions

The General Assembly adopted a proposal by
France and other French-speaking states to
provide a bonus for staif members using more
than one of the U.N.'s working languages.

"\\^lile the United States is not opposed to

186

DEPARTMENT OF STATE BULLETIN

I

increasing language skills in the Secretariat, we
and other members were obliged to oppose this
proposal on grounds both of cost and of doubt-
fid efl'ectiveness. As a result of this opposition,
the operation of the bonus proposal was delayed
until 19C9, providing time for further study and
for the development of a sounder and less costly
approach.

Agenda Items Allocated to Committee VI

Territorial Asylum

The General Assembly, on the recommenda-
tion of the Legal Committee, adopted a hu-
manitarian declaration on territorial asylum,
which will enhance the abilitj^ of those fleeing
from persecution to find safe haven.

Diplomaiic Privileges and Immunifies

The United States was instrumental in bring-
ing about the discussion of an item on respect
for diplomatic privileges and immunities. The
Assembly adopted a resolution expressing its
strong concern over departures from the rules
of international law governing diplomatic
status — of which there have been a growing
number of serious instances in recent years. The
resolution urged states to take every measure
necessary to insure respect for the diplomatic
privileges and immunities, and to adhere to
the relevant treaties in the field, the Vienna
Convention on Diplomatic Relations and the
Convention on Privileges and Immunities of
the United Nations.

Definition of Aggression

A Soviet-initiated item on the "Definition of
Aggression" served only to prove that the cold
war is not yet dead. After several days of
propaganda in plenary by supporters of this
item, the question was sent for further consid-
eration to the Legal Committee, which proposed
that the General Assembly establish a special
committee to consider the question. This pro-
posal was adopted by the Assembly with the
L^nited States among those abstaining.

The United States stated its willingness to
support the creation of a committee with a
responsible and businesslike mandate. "We felt
obliged to abstain in the voting because the
mandate given to the committee was ambiguous
and unsatisfactory.

TREATY INFORMATION

United States and Japan Sign
New Cotton Textile Arrangement

The Department of State announced on Jan-
uary 13 (press release 7) that two sets of notes
were exchanged in Washington on January 12
constituting a new bilateral arrangement gov-
erning exports of cotton textiles from Japan
to the United States. Assistant Secretary for
Economic Affairs Anthony M. Solomon signed
on behalf of the U.S. Government; Ambassador
Takeso Shimoda signed on behalf of the Gov-
ernment of Japan. The exchanges of notes cover
exports of cotton textiles from Japan to the
United States during 1967 and for the 3-year
period beginning January 1, 1968.^

For 1968, Japan may export a total of 373,-
077,000 square yards equivalent of cotton tex-
tiles under the arrangement. This total includes
162,856,000 square yards of fabrics; 53,204,000
square yards equivalent of madeup goods;
144,040,000 square yards equivalent of apparel ;
12,977,000 square yards equivalent of other
cotton textiles.

The levels for 1967 are as follows: aggregate
limit, 355,311,146 square yards equivalent:
fabrics, 155,101,040 square yards; madeup
goods, 50,670,459 square yards equivalent; ap-
jjarel, 137,180,998 square yards equivalent ; and
other cotton textiles, 12,358,649 square yards
equivalent.

Other provisions in the arrangement for the
period beginning January 1, 1968, are similar
to those contained in other U.S. cotton textile
agreements. These include 5 percent annual
growth in export volumes, flexibility between
different groups and categories of cotton tex-
tiles, and carryover of certain shortfalls in
agreement limits. The arrangement of cate-
gories established in the 1963 U.S.-Japan agree-
ment^ remains unchanged.

' For texts of the arrangement and related notes, see
Department press release 7 dated Jan. 13.

' For background and text of the arrangement con-
eluded Aug. 27, 1963, see Bulletin of Sept. 16, 1963,
p. 440.

FEBRUARY 5, 1968

187

U.S. and Belgium Extend
Income Tax Protocol

Press release S02 dated December 26

On December 11 the American Embassy at
Biiissels and the Belgian Foreign Mmistry ex-
changed notes wherein it was agreed by the
United States and Belgian Governments that
the protocol of May 21, 1965,^ modifying and
supplementing the convention of October 2H,
1948 for the avoidance of double taxation and
the prevention of fiscal evasion with respect to
taxes on income, as amended by supplementary
conventions of September 9, 1952, and August
22 1957,'' shall continue in effect with respect to
income of calendar years or taxable years be-
ginning (or, in the case of taxes payable at the
source, payments made) prior to January 1,

1971. , ^, . ,

The 1965 protocol, which was brought into
force on August 29, 1966, by the exchange of
instruments of ratification, provides m para-
graph (5) of article II:

" (5) This protocol shall remain in effect with
respect to income of calendar years or taxable
years beginning (or in the case of taxes payable
at the source, payments made) prior to January
1, 1968, or such subsequent date, not later than
January 1, 1971, which may be agreed to by the
Contracting States through an exchange of
diplomatic notes."

Current Actions

(TIAS 4044). Adopted at Paris September 28, 1965.
Enters into force November 3, 1068.
Ratified by the President: January 8, 19b8.

United Nations

Amendment to article 109 of the Charter of the United
Nations (59 Stat. 1031). Adopted at New \ork De-
cember 20, 1965.' ^ , io
Ratifications deposited: Luxembourg, December lA
1967 ; Syria, December 8, 1967.

BILATERAL

Mexico

Protocol of amendment to the agreement of January
29, 1957, as amended (TIAS 4777, 6210 ) concerning
radio broadcasting in the standard band. Signed at
Mexico December 21, 1967. Enters into force on the
date of the exchange of instruments of ratification.

Philippines

Agreement amending the agreement of September 21,
1967 (TIAS 6344), relating to trade m cotton tex-
tiles. Effected by exchange of notes at Washington
December 26, 1967. Entered into force December 20,
1967. TIAS 6416.

Viet-Nam

Agreement for sales of agricultural commodities, re^
lating to the agreement of ^arch 13 1^7 (TIAS
6271). Signed at Saigon January 6, 196s. Ji,nterea
into force January 6, 1968.

MULTILATERAL

Atomic Energy

Agreement for the application of safeguards by the
International Atomic Energy Agency to the bilateral
agreement between the United States and Korea of
February 3, 1956, as amended (TIAS 3490, 4030.
5957) , for cooperation concerning civil uses of atomic
energy. Signed at Vienna January 5, 1968. Entered
into force January 5, 196s.

Signatures: International Atomic Energy Agency,
Korea, United States.

Maritime Matters

Amendment to article 28 of the convention on the Inter-
governmental Jlaritime Consultative Organization

PUBLICATIONS

Final Volume in Foreign Relations
Series for 1944 Released

The Department of State on January 16 released
Foreign Relations of the United States: Diplomatic
Papers, 19U, Volume VII, The American RcptibUcs (x,

'This volume covers the relations of the United States
with all the Latin American Republics and documents
a wide variety of policies and i.-sues, particularly the
problems resulting from the approaching end of the
war In addition to compilations on hemisphere defense
and economic cooperation, the volume includes papers
relating to lend-lease programs, control of financial
transactions with the Axis, and questions of recogni-
tion, strategic materials, highway projects, and public

health. , -.^ ^ ^i- „

Copies of this volume (Department of State publica-
tion 8333) may be obtained from the Superintendent of
Documents, U.S. Government Printing Office, Washing-
ton, D.C. 20402, for $5.50 each.

' Treaties and Other International Acts Series 0073.
"TIAS 2833, 4280.

' Not in force.

188

DEPARTMENT OF STATE BULLETIJiT

INDEX February 5, 1968 Vol. LVIII, No. H93

Africa. The State of the Union (cxicrpts from
President Johnson's address) 161

Asia

The State of the Union (excerpts from President

Johnson's address) 161

Viet-Nam and the Future of East Asia (Bundy) . 175

Barbados. Letters of Credence (Vaughan) . . 167

Belgium. U.S. and Belgivmi Extend Income Tax

Protocol 18S

Congress. The State of the Union (excerpts from
President Johnson's address) 161

Disarmament. U.S. and U.S.S.R. Submit Com-
plfto Draft Treaty on Nonproliferation of Nu-
clear Weapons to Geneva Disarmament Confer-
ence (Johnson, Fisher, text of draft treaty) . 161

Economic Affairs

The Challenges of Our Changing Atlantic Part-
nership (Katzenbach) 16S

The State of the Union ( excerpts from President
Johnson's address) 161

U.S. and Belgium Extend Income Tax Protocol . 188

United States and Japan Sign New Cotton Tex-
tile Arrangement 187

Educational and Cultural Affairs. National Re-
view Board Appointed for East- West Center . 179

Europe. The Challenges of Our Changing Atlan-
tic Partnership (Katzenbach) 168

Gabon. Letters of Credence (Badinga) .... 167

International Organizations and Conferences.
U.S. and U.S.S.R. Submit Complete Draft
Treaty on Nonproliferation of Nuclear Weap-
ons to Geneva Disarmament Conference (John-
son, Fisher, text of draft treaty ) 164

Israel. U.S. and Israel Reaffirm Dedication to
Peace in the Middle East (Johnson, Eshkol,
joint statement) 172

Japan. United States and Japan Sign New Cotton
Textile Arrangement 187

Maldive Islands. Letters of Credence (Sattar) . 167

Near East

The State of the Union (excerpts from President
Johnson's address) 161

U.S. and Israel Keafflrm Dedication to Peace in
the Middle East (Johnson, Eshkol, joint state-
ment) 172

Presidential Documents

The State of the Union (excerpts) 161

U.S. and Israel Reaffirm Dedication to Peace in

the Middle East 172

U.S. and U.S.S.R. Submit Complete Draft Treaty
on Nonproliferation of Nuclear Weapons to
Geneva Disarmament Conference 164

Publications. Final Volume in Foreign Relations
Series for 1944 Released 188

Sierra Leone. Letters of Credence (Hyde) . . 167

Thailand. Letters of Credence (Atthakor) . . 167

Treaty Information

Current Actions 188

U.S. and Belgium Extend Income Tax Protocol . 188
United States and Japan Sign New Cotton Tex-
tile Arrangement 187

U.S. and U.S.S.R. Submit Complete Draft Treaty
on Nonproliferation of Nuclear Weapons to
Geneva Disarmament Conference (Johnson,
Fisher, text of draft treaty) 164

U.S.S.R. The State of the Union (excerpts from
President Johnson's address) 161

United Nations. The Work of the United Nations
During the 22d General Assembly (Goldberg,
summary) 180

Viet-Nam

The State of the Union (excerpts from President

Johnson's address) 161

Viet-Nam and the Future of Bast Asia

(Bundy) 175

Name Index

Atthakor, Bunchana 167

Badinga, Leonard .\ntoine 167

Bundy, William P 175

Eshkol, Levi 172

Fi.sher, Adrian S 164

Goldberg, Arthur J igo

Hyde, Adesanya K 167

Johnson, President 161, 164, 172

Katzenbach, Nicholas deB I68

Sattar, Abdul 167

Vaughan, Hilton Augustus 167

Check List of Department of State
Press Releases: January 15-21

Press releases may be obtained from the Office
of News, Department of State, Washington,
D.C. 20520.

Releases issued prior to January 15 which ap-
pear in this issue of the Bulletin are Nos. 302
of December 26 and 6 and 7 of January 13.

No. Date Subject

t8 1/15 U.S.-Indonesia air transport agree-
ment.
9 1/16 Bundy : "Viet-Nam and the Future
of East Asia."
*10 1/17 Linowitz : Roosevelt University,

Chicago, 111. (excerpts)
til 1/19 Dedication of bridge on Rama Road,
Nicaragua.
12 1/19 National Review Board for East-
West Center.
tl3 1/19 Katzenbach: Oklahoma Press As-
sociation, Oklahoma City.
*14 1/19 "Book of Friendship" presented to
Mrs. Lyndon B. Johnson.

*Not printed.

tHeld for a later issue of the Bulletin.

D.«, SOVERNMENT PRINTING OFFICE: I9fifl

Superintendent of Documents
U.S. government printing office

WASHINGTON, O.C. 20402

POSTAGE AND FEES PAID
U.S. GOVERNMENT PRINTING OFFICE

OFFICIAL BUSINESS

J

THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

OF

STATE

BULLETIN

VIET-NAM AND THE INDEPENDENCE OF SOUTHEAST ASIA
hy Under Secretarvj Katzenbach 201

NATIONAL INTEREST, FOREIGN AFFAIRS, AND THE MARINE SCIENCES

by Herman Pollack 211

THE CRISIS IN KOREA

Address by President Johnson and Other U.S. Government Statements 189

Statements hy Ambassador Goldberg in the U.N. Security Council 193

Text of Special Report of the U.N. Command in Korea 199

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1494
February 12, 1968

For sale by the Superintendent of Documents

U.S. Government Printing Office

Washington, D.C. 20402

PRICE:

B2 issues, domestic $10, foreign $15
Single copy 30 cents

Use of funds for printing of tliis publication
approved by the Director of the Bureau of
the Budget (January 11, 1966).

Note: Contents of this publication are not
copyrighted and items contained herein may be
reprinted. Citation of the DEPARTMENT OF
STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed in
the Eeadere' Quide to Periodical Literature.

r/ie Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
with information on developments in
the field of foreign relations and on
the work of the Department of State
and the Foreign Service.
The BULLETIN includes selected
press releases on foreign policy , issued
by the White House and the Depart-
ment, and statements and addresses
made by the President and by the
Secretary of State and other officers
of the Department, as well as special
articles on various phases of interna-
tional affairs and the functions of the
Department. Information is included
concerning treaties and international
agreements to which the United
States is or may become a party
and treaties of general international
interest.

Publications of the Department,
United Nations documents, and leg-
islative material in the field of inter-
national relations are listed currently.

The Crisis in Korea

Following is an address to the Nation l>y Pres-
ident Johnson on January 36, together with
other U.S. Government statements made Janu-
ary 2o-£6 on the Korean crisis.

ADDRESS BY PRESIDENT JOHNSON,
JANUARY 26

White House press release dated January 26

My fellow Americans: Over the past 15
months the North Koreans have pursued a
stepped-up campaign of violence agamst South
Korean and the American troops in the area
of the demilitarized zone.

Armed raider teams in very large numbers
have been sent into South Korea to engage in
sabotage and assassination.

On January- 19, a 31-man team of North Ko-
rean raiders invaded Seoul with the object of
murdering the President of the Republic of
Korea.

In many of these aggressive actions Korean
and American soldiers have been killed and
wounded. The North Koreans are apparently
attempting to intimidate the South Koreans
and are tiding to interrupt the growing spirit
of confidence and progress in the Republic of
Korea.

These attacks may also be an attempt by the
Communists to divert South Korean and United
States military resources which together are
now successfully resisting aggression in Viet-
Nam.

This week the North Koreans committed yet
another wanton and aggressive act by seizing
an ^Ajnerican ship and its crew in international
waters. Clearly, this cannot be accepted.

We are doing two things : First, we are very
shortly today taking the question before the
Security Council of the United Nations.^ The
best result would be for the whole world com-
munity to persuade North Korea to return our
ship and our men and to stop the dangerous
course of aggression against South Korea.

We have been making other diplomatic efforts

' See p. 193.

as well. We shall continue to use every means
available to find a prompt and a peaceful solu-
tion to the problem.

Second, we liave taken and we are taking
certain precautionary measures to make sure
that our military forces are prepared for any
contingency that might arise in this area.

These actions do not involve in any way a
reduction of our forces in Viet-Nam.

I hope that the North Koreans will recognize
the gravity of the situation which they have
created. I am confident that the American peo-
ple will exhibit in this crisis — as they have in
other crises — determination and unity.

Thank you very much.

OTHER U.S. GOVERNMENT STATEMENTS
Defense Department Statement, January 23

Department of Defense press release dated January 23

The U.S.S. Pueblo, a Navy intelligence col-
lection auxiliary ship, was surromided by North
Korean patrol boats and boarded by an armed
party in international waters in the Sea of Ja-
pan shortly before midnight e.s.t. last night
[January 22] .

The United States Government acted imme-
diately to establish contact with North Korea
through the Soviet Union.

When the Puehlo was boarded, its reported
position was approximately 25 miles from the
mainland of North Korea.

The sliip reported the boarding took place
at 127 degrees, 54.3 minutes east longitude; 39
degrees, 25 minutes north latitude. The time
was 11 :45 p.m. e.s.t.

The ship's complement consists of 83, includ-
ing six officers and 75 enlisted men and two
civilians.

At approximately 10 p.m. e.s.t., a North Ko-
rean patrol boat aj)proached the Pueblo. Using
international signals, it requested the Pueblo's
nationality. The Pueblo identified herself as a
U.S. ship. Continuing to use flag signals, the
patrol boat said : "Heave to or I will open fire
on you." The Pueblo replied : "I am in intema-

PEBEUART 12, 1068

189

tional waters." The patrol boat circled the
Pueblo.

Approximately 1 hour later, three additional
patrol craft appeared. One of them ordered:
"Follow in my wake; I have a pilot aboard."
The four ships closed in on the Pueblo, taking
different positions on her bow, beam, and quar-
ter. Two MIG aircraft were also sighted by
the Pueblo circling off the starboard bow.

One of the patrol craft began backing to-
ward the bow of the Pueblo, with fenders
rigged. An armed boarding party was stand-
ing on the bow.

The Pueblo radioed at 11:45 p.m. that she
was being boarded by North Koreans.

At 12:10 a.m. e.s.t. today [January 23] the
Pvsblo reported that she had been requested to
follow the North Korean ships into Wonsan
and that she had not used any weapons.

The final message from the Pueblo was sent
at 12 :32 a.m. It reported that it had come to "all
stop" and that it was "going off the air."

The Pueblo is designated the AGER-2. It is
a modified auxiliary light cargo ship (AKL).

The Pueblo is 179 feet long and 33 feet wide,
with a displacement of 906 tons. It has a 10.2-
foot draft. Its maximum speed is 12.2 knots.^

Statement by the Department of State
Spokesman, January 23

You've all seen or had the statement by the
Department of Defense this morning about the
boarding in international waters of a U.S. naval
vessel by North Koreans. I'm authorized to state
that the United States Government views this
action by North Korea with utmost gravity. We
have asked the Soviet Union to convey to the
North Koreans our urgent request for the im-
mediate release of the vessel and crew.

The matter will also be raised directly with
the North Koreans in a meeting of the Military
Armistice Commission. We will, of course, use
any other channels which might be helpful.

I wish to reemphasize the seriousness with
which we view this flagrant North Korean ac-
tion against the United States naval vessel on
the high seas.

' Later on Jan. 23, the Department of Defense issued
the following statement to the press :

Press reports which imply that the captain of the
Pueblo made a number of calls for help are wrong.

The facts are that the only time the Pueblo requested
assistance was when she was actually boarded. There
were no earlier requests for assistance of any kind.

Time and distance factors made it impossiijle to re-
spond to the call that was made when the ship was be-
ing boarded.

Statement by the Department of State
Spokesman, January 24

At the meeting of the Military Armistice
Commission in Panmimjom, the reaction of the
North Korean side was cynical, denunciatory
of the United States, and a distortion of the
facts in the case.

Secretary Rusk's News Briefing January 24 ^

This is my first meeting with the committee
since the new session convened. We roamed
rather widely over international affairs. We dis-
cussed the recent Korean ship incident and, of
course, the B-52 accident in Greenland, dis-
armament questions, Viet-Nam, Middle East.
We ranged rather widely over the entire spec-
trum. I may be back again before too long to
continue the discussion.

Q. Mr. Secretary, we have asked the North
Koreans to give the Pueblo back. They have said
"yVo." Where do we go from here?

A. Well, most of the questions I get from you
fellows have to do with the future. Let's wait
and see.

Q. Mr. Secretary, we did yesterday irmke an
approach to the Russians —

A. Yes.

Q. — to secure their assistance. Can you tell
vs anything at all about the nature of their
resfotise?

A. No, not at this point.

Q. Is the United States determined to get the
Pueblo back —

A. Yes.

Q. — by whatever means it taJees.

A. Yes indeed. This is a very grave and seri-
ous matter. The seizure of a U.S. naval ship in
international waters is one of the most serious
kinds of action that can be taken, and I can
assure that there is no light view of that here in
the United States.

Q. Mr. Secretary, you have shown measured
restraint so far. Could you explain the reason
behind this restraint and continue along that
line?

' Held after appearing before the House Committee
on Foreign Affairs.

190

DEPARTMENT OF STATE BTJLLETIN

A. No, I don't want to pliilosopliizo about it.
"\'\'Tien wo heaifl what had liappened, we im-
mediately got in touch with the — almost literally
in a matter of minutes getting off messages to
be in touch with North Korea to get this ship
back and get tlie men back. Now, that has not
yet occurred; so we will have to see where we
go from here.

Q. You are not ruling out military force, are
you?

A. I am not discussing the future in any way,
shape, or form at this point.

Q. Could you discuss the role of the Enter-
prise, presently off North Korea?

A. No. It is there in the Sea of Japan, and it
will be there imtil it is ordered to move.

Q. Mr. Secretary, there is about an hour, ac-
cording to the accounts, when tlie ship was going
back. Why was there no attempt to stop the
Koreans from bringing the boat into port?

A. I have no answer on that. We need to dis-
cuss questions of that sort with tlie skipper — the
skipper is not available to us — to see what actu-
ally happened during that period and what his
judgments and assessments were.

Q. Why were there no American planes?
There are air-bases in that area.

A. I gather this has to do with what tlie
skipper thought the situation was and what he
might have asked for and what his assessment of
the situation was. You see, there are acts of
harassment that go on all the time — in the Med-
iterranean, in the Black Sea, in the Sea of
Japan. We just don't know how the skipper saw
tliis when the first motor torpedo boat came
alongside and accosted him in the way that they
did.

Q. Have we
hack for us?

the Russians to get this ship

A. Well, we would like to see the Russians
give us some help in this matter and get this
ship out of there, but we can't anticipate yet
what the result might be.

Q. Do we see any conn£ction, sir, between
these events in Korea and our commitment in
Viet-Nam — our extension there?

A. I don't see any organic connection. It is
possible that the North Koreans, with their in-
creased infiltration of agents across the 38th

parallel, think they might create some pressures
or create some problems in that respect, but it
won't have the slightest effect in that matter.

Q. Do you see it as part of activity in Laos,
North Viet-Nam, and so on, as kind of orches-
tration of pressure on us?

A. I wouldn't comiect Korea with Laos and
South Viet-Nam at the present time. I do think
that Laos and South Viet-Nam fit together.
North Vietnamese forces are in both places,
where tliey have no right to be. In Laos they
are there directly contrary to the specific re-
quirements of the Laos accords of 1962. We
would like to see those accords carried out by
everybody, which would mean that North Viet-
namese forces would leave Laos. But I think this
is orchestrated as a matter of North Vietnam-
ese pressure on its neighbors. They not only
have many regiments in South Viet-Nam ; they
have regiments in Laos, and they are helping to
organize agents and guerrillas over in Thai-
land ; so there is no question about some orches-
tration there. And those who think that Ho Chi
Minh is just a nationalist ought to ponder on
why, then, he is tinkermg with Laos and Thai-
land, because those people are not Vietnamese.

Q. Mr. Secretary, can you give us any prog-
ress report on the exploration into the negotia-
tion overtures by North Viet-Nam?

A. No, not at this point.

Q. Mr. Secretary, Senator [Richard 5.]
Russell said yesterday that this teas a breach of
international law, amounting to an act of war.
Do you see if in the same way?

A. Well, it is certainly a major breach of in-
ternational law and lends itself to that interpre-
tation. Of course the seizure of an official naval
vessel of another coimtry in international
waters and taken into your port is a very harsh
act, and I would not object to designating it as
an act of war in terms of the category of acts
wliich could so be construed.

Q. Mr. Secretary, there have been a series
of actions and statements from North Korea
recently, of which this is only th-e latest — guer-
rilla raids, talk of another war. Has the danger
increased of a new outbreak of fighting there?

A. That is up in part to North Korea. My
strong advice to North Korea is to cool it, that
there have been enough of these incidents, and
they have been coming out of North Korea.

FEBRTJART 12, 1968

191

This incident in Seoul the other day was very
serious. The pretense by North Korea that some-
how these are merely South Koreans who are
objecting to their government is nonsense. We
know where these people come from and how
they come; so I think North Korea would be
well advised to pull back here and start living
at peace with South Korea and stopping this
kind of activity.

Q. Mr. Secretary, h there any plan to take
this matter to the United Nations or—

A I wouldn't want to discuss the future or
next steps or what might be done following
the representations we have made thus tar.
Thank you, gentlemen; I have to go.

White House Statement, January 25*

The President has directed Secretary of De-
fense McNamara to recall to active duty certain
air squadrons and support units of the Air
Force and the Navy.= The Air Force Reserve,
Air National Guard, and Naval Eeserve planes
involved will total 372 fighter and transport
aircraft.

The reservists are being recalled immediately
under congi-essional authority provided in the
Department of Defense Appropriations Act of
1967. This act provides that :

Until June 30, 1968, the President may, when he
deems it necessary, order to active duty any unit of
the Ready Reserve of an armed force for a period
of not to exceed 24 months.

Wlien and if decisions are made on the callup
of Army or Marine Corps reservists, appro-
priate announcements will be made promptly.

White House Statement, January 25*

The President this afternoon, after intensive
consultations with his senior advisers, in-
structed Ambassador Goldberg [U.S. Repre-
sentative to the United Nations Arthur J.
Goldberg] to request an urgent meeting of the
Security Comicil of the United Nations to con-
sider the grave situation which has arisen in
Korea by reason of North Korean aggressive
actions against the Republic of Korea and the
illegal and wanton seizure of a United States
vessel and crew in international waters.

' Read to news correspondents by George Chrietian,
Press Secretary to the President.

' For text of Executive Order 11392, see 33 Fed. Reg.
951.

This action by the President reflects his
earnest desire to settle this matter promptly
and, if at all possible, by diplomatic means.

Ambassador Goldberg will be leaving with-
in the hour to present an appropriate letter
requesting such a meetmg to the President of
the Security Council.

Ambassador Goldberg has already advised
by telephone the President of the Security
Council and the Secretary-General of this pro- j
posed action by the United States. |

Excerpt From an Address by Secretary Rusk,
Cathedral Club, Brooklyn, N.Y., January 25 j

I
I know you would be concerned tonight to i
hear me say something new about the present
moment in Korea. We've said a good deal m
the course of today, and I recall in Ecclesiastes
3 it is said that "To everything there is a sea-
son ... a time to keep silence, and a time to
speak." Today we have taken precautionary
measures with respect to our Armed Forces,
and the President has instructed Ambassador
Goldberg to present this matter before the
Security Council of the United Nations tomor-
row, and there will be a full exposition there
of the issues involved.

I can say very simply tonight, without gomg
into detail, that the seizure of a U.S. naval
vessel in international waters is without prece-
dent and is intolerable. And there can be no
satisfactory result, short of the prompt, may I
say, immediate release of that ship and its offi-
cers and crew.

This incident reminds us that when the great
issues are at stake, it is important that we think
just as clearly as possible, without illusions,
without false hope. . . .

Statement by the Department of State
Spokesman, January 26

Assistant Secretary [for International Or-
ganization Affairs Joseph J.] Sisco and Deputy
Assistant Secretary [for East Asian and Pacific
Affairs Samuel D.] Berger met this morning
with other members of the Group of 16— that
is, those governments which provided forces
imder the U.N. Command during the Korean
war. The group was briefed fully on current
diplomatic and other steps being taken by the
United States to secure the prompt release of
the PueUo and its crew, including our referral

192

DEPARTMENT OF STATE BULLETIN

of the matter to the United Nations Security
Council.

During the briefing, attention was focused
on repeated North Korean vioUxtions of the
Korean Armistice Agreement.

Representatives of the following countries
were present : Australia, Belgium, Canada, Co-
lombia, Ethiopia, France, Greece, Luxembourg,
Netherlands, New Zealand, Philippines, South
Africa, Thailand, Turkey, and the United
Kingdom.

Mr. Sisco also met in a separate session with
the Ambassador of the Republic of Korea, and
that included a full exchange of information
on the current situation.

We have taken note of a North Korean broad-
cast of an editorial in a North Korean
newspaper.

Now, the purport of this editorial is to de-
clare the crew of the Pueblo as criminals. Here
is a direct quote :

The criminals who have violated the sovereignty of
another country and perpetrated a provocative act
must receive due punishment. These criminals must
be dealt with by law.

Now, in our view, this statement is a flagrant
travesty of the facts. It is the action of North
Korea which is and has been illegal from the
outset.

I am authorized to say that the United States
Government would consider any such move by
North Korea to be a deliberate aggravation of
an already serious situation.

The United States Government has asked the
International Committee of the Ked Cross to
intercede on behalf of the personnel of the
Pvshlo. We asked the ICRC to inquire about
the welfare and physical condition of the men,
to request their early release, and to offer ICRC
assistance in arrangements for their release. We
most urgently asked the ICRC to attempt to
arrange the repatriation of seriously injured
personnel.

U.N. Security Council Begins Debate on Korea

Following is the text of a letter from Arthur
J. Goldberg, U.S. Representative to the United
Nations, to Agha Shahi, President of the V.N.
Security Council, together with statements
iruule hy Ambassador Goldberg in the Council
on January 26 and 27.

AMBASSADOR GOLDBERG'S LETTER

U.S. /U.N. press release 6

January 25, 1968

Dear Mr. President: I request an urgent
meeting of the Security Coimcil to consider the
grave threat to peace which has been brought
about by a series of increasingly dangerous and
aggressive military actions by North Korean
authorities in violation of the Armistice Agree-
ment and of international law and of the
Charter of the United Nations.

The armistice regime established by the Ar-
mistice Agreement of July 27, 1953 has been re-
peatedly \nolated by North Korean authorities.
These violations have become increasingly se-
rious during the past year and a half, during

which armed personnel on many occasions have
been dispatched from North Korea across the
demilitarized zone into the Republic of Korea
on missions of terrorism and political assassi-
nation. A particularly grave incident occurred
this month, when a band of armed terrorists
was dispatched into the Republic of Korea on
a mission whose apparent goal was the assassi-
nation of President Park.

More recently. North Korea has wilfully com-
mitted an act of wanton lawlessness against a
naval vessel of the United States operating on
the high seas. On January 23, the USS Pueblo,
while operating in international waters, was
illegally seized by armed North Korean vessels,
and the ship and crew are still under forcible
detention by North Korean authorities.

This North Korean action against a United
States naval vessel on the high seas, and the
serious North Korean armed raids across the
demilitarized zone into the Republic of Korea,
have created a situation of such gravity and
danger as to require the urgent consideration of
the Security Council which we are accordingly
requesting.

FEBRUARY 12. 1968

193

STATEMENT OF JANUARY 26

U.S. /U.N. press release 7

The United States has requested this meeting,
as I stated in my letter to you, to consider the
grave tlireat to peace which the authorities of
North Korea have brought about by tlieir in-
creasingly dangerous and aggressive military
actions in violation of the Korean Armistice
Agreement of 1953, of the United Nations Char-
ter, and of international law.

We have asked that the Council be convened
at an hour when peace is in serious and immi-
nent danger — when firm and forthwith action is
required to avert that danger and preserve
peace.

A virtually unarmed vessel of the United
States Navy, sailing on the high seas, has been
wantonly and lawlessly seized by armed North
Korean patrol boats and her crew forcibly de-
tained. This warlike action carries a danger to
peace which should be obvious to all.

A party of armed raiders, infiltrated from
North Korea, has been intercepted in the act of
invading the South Korean Capital City of
Seoul with the admitted assignment of assassi-
nating the President of the Kepublic of Korea.
This event marks the climax of a campaign by
the North Korean authorities, over the past 18
months, of steadily growing infiltration, sabo-
tage, and terrorism in flagrant violation of the
Korean Armistice Agreement.

Mr. President, these two lines of action are
manifestly parallel. Both stem from North Ko-
rea. Both are completely imwarranted and un-
justified. Both are aimed against peace and
security in Korea. Both violate the United Na-
tions Charter, solemn international agreements,
and time-honored international law. And both
pose a grave threat to peace in a country whose
long search for peace and remiification in free-
dom has been an historic concern to the United
Nations and my country.

We bring these grave developments to the
attention of the Security Council in the sincere
hope that the Council will act promptly to re-
move the danger to international peace and se-
curity. For, Mr. President, it must be removed,
and without delay. And it will be removed only
if action is taken forthwith to secure the release
of the U.S.S. Pueblo and its 83-mun crew and to
bring to an end the pattern of armed transgres-
sions by North Korea against the Repul)lic of
Korea. My Government has stated at the highest

level our earnest desire to settle this matter
promptly and peacefully and, if at all possible,
by dijjlomatic means.

It is testimony to this desire that, in fidelity to
the charter, my Government has brought this
matter to the Security Council, which has the
primary responsibility for the mamtenance of
international peace and security and which, to-
gether with other organs of the United Nations,
has a special and historic concern for peace and
security in Korea.

It is imperative, therefore, that the Security
Council act with the greatest urgency and de-
cisiveness. The existing situation cannot be al-
lowed to stand. It must be corrected, and the
Council must face up to its responsibility to
see it corrected. This course is far more prefer-
able to other remedies which tlie charter re-
serves to member states.

Let me now turn to the facts concerning
these two aspects of North Korean aggressive
conduct on which the Council's action is ur-
gently required.

Seizure of the U.S.S. Pueblo

At 12 noon on January 23, Korean time, the
United States ship Puehlo, manned by a crew of
six officers, 75 enlisted men, and two civilians,
and sailing in international waters off the North
Korean coast, was confronted by a heavily
armed North Korean patrol boat identified as
submarine chaser No. 35.

The strict instructions tmder which the
Pueblo was operating required it to stay at
least 13 nautical miles from the North Korean
coast. Wliile my country adheres to the 3-mile
rule of international law concerning territorial
waters, nevertheless the ship was mider orders
whose efl'ect was to stay well clear of the 12-mile
limit which the North Korean authorities have
by long practice followed.

The U.S.S. Puchlo reported this encounter
and its location at the time in the following
words — and I wish to quote exactly what was
reported by radio at the time of the encounter —
"U.S.S. Pueblo encountered one SO-1 class
North Korean patrol craft at 0300Z"— that is,
at 12 noon Korean time— and then — I am re-
peating its broadcast — "Position 39-25.2 NL
127-55.0 EL DIW." I might explain that DIW
means "Dead in Water," the standard terminol-
ogy meaning that all engines are stopped and
the vessel is stationary.

194

DEPARTMENT OF STATE BULLETIN

Now, with your permission, Mr. President, I
should like to refer to this map ^ provided for
the convenience of the Coimcil and show the
exact location of the Pnehlo as given in these
coordinates. If the members of the Council will
look at the map, you will see a number 3 blue.
Number 3 blue is approximately 25 nautical
miles from the port of Wonsan. It is 16.3 nauti-
cal miles from the nearest point of the North
Korean mainland, on the Peninsula of Hodo-
Pando, and 15.3 nautical miles from the Island
of Ung-Do.

Now, at exactly the same time, the North Ko-
rean submarine chaser No. 35, which intercepted
the Pueblo, reported its own location in the
number 3 red — and this is a report now from
the North Korean submarine chaser No. 35
monitored by us — and that location was 39 de-
grees 25 minutes north latitude and 127 degrees
56 minutes east longitude. You will note the po-
sitions. In other words, these two reported posi-
tions are within a mile of one another and show
conclusively that according to the North Ko-
rean report, as well as our own, the Pueblo was
in international waters.

The report of its location by the North Ko-
rean craft, made by international Morse code,
was followed 10 minutes later by the following
oral message from the North Korean craft to its
base, and I quote it : "We have approached the
target here, the name of the target is GER
1-2."

Now, we talk about the Pueblo, and that is the
name by which the ship is, of course, known.
But the technical name for this ship is GER-2,
and this name was painted on the side of the
ship.

The message continued, and I again quote
the Korean radio message in Korean words:
"Get it? GER 1-2 : did you get it? So our con-
trol target is GER 1-2. 1 will send it again. Our
control target is GER 1-2."

Inasmuch as the location of the Pueblo is, of
course, a matter of vital importance, it is im-
portant to the Council to know that the in-
formation available to the United States as re-
ported by our vessel to our authorities and to
the North Korean authorities as reported by its
vessel and transmitted by its own ship was
virtually identical, with only this small margin
of difference. And interestingly enough, the
North Korean ship reported the Pueblo to be

' Not printed here.

about a mile farther away from the shoreline
than the United States fix of its position. That
distance between the blue and the red is about
a mile. So you see, the North Korean broadcast
monitored was reporting what I have stated to
this Council.

Mr. President, we have numerous other re-
ports during this encounter consistent with the
location I have described. And information
other than coordinates corroborative of what I
have said is by voice monitor; information on
coordinates, as I said, was by international
Morse code.

The North Korean patrol boat, having made
its approach, used international flag signals to
request the Pueblo^s nationality. The Pueblo,
replying with the same signal system, identified
herself as a United States vessel. The North
Korean vessel then signaled : "Heave to or I wiU
open fire on you." The Pueblo replied : "I am in
international waters."

The reply was not challenged by the North
Korean vessel, which, under international law,
if there had been an intrusion — which there was
not — should have escorted the vessel from the
area in which it was. However, that vessel then
proceeded for approximately an hour to circle
the Pueblo, which maintained its course and
kejjt its distance from the shore. At that point
three additional North Korean armed vessels
appeared, one of which ordered the Pusblo:
"Follow in my wake." As this order was issued,
the four North Korean vessels closed in on the
Pueblo and surrounded it. At the same time two
MIG aircraft appeared overhead and circled
the Pueblo. The Pueblo attempted peacefully to
withdraw from this encirclement but was
forcibly prevented from doing so and brought
to a dead stop. It was then seized by an armed
boarding party and forced into the North
Korean port of Wonsan.

Now, reports from the North Korean naval
vessels on their location and on their seizure of
the Pueblo at this point show that the Pueblo
was constantly in international waters.

At 1 :50 p.m. Korean time, within a few
minutes of the reported boarding of the Pueblo,
North Korean vessels reported their position at
39-26 NL 128-02 EL, or about 21.3 miles from
the nearest North Korean land. This is the point
on tlie map here. And we would be very glad,
Mr. President, to make this map available for
the records of the Security Council.

Now, Mr. President, I want to lay to rest —

FEBRUARY 12, 1968

195

completely to rest — some intimations that the
Pueblo had intruded upon the territorial waters
and was sailing away from territorial waters
and that the North Korean ships were in hot
pursuit. This is not the case at all, and I shall
demonstrate it by this map.

Now, we will show by times and the course
of the vessel exactly what occurred, and you
will see from this that the location of the Pueblo
was constantly far away from Korean shores,
always away from the 12-mile limit until it was
taken into Wonsan by the North Korean vessels.
The locations of the Pueblo are shown on the
blue line, and the location of the SO-1 35, the
first North Korean vessel, on the red line.

Now, the Pueblo, far from having sailed from
inside territorial waters to outside territorial
waters, was cruising in an area — in this area —
and this will be demonstrated by the time
sequence — and when I say, "this area," I mean
the area that is east and south of any approach
to the 12-mile limit.

At 0830 Korean local time, the Pueblo was
at the location I now point to on the map. It
had come to that point from the southeast, not
from anywhere in this vicinity. And that is
point 1 on the map, so that our recoi'd will be
complete. Point 2 on the map shows the posi-
tion of the North Korean submarine chaser No.
35 as reported by her at 10 :55, and you will see
that she is close to — the North Korean vessel,
not the Pueblo — the 12-mile limit.

Point No. 3 is the position reported by the
Pueblo at 12 o'clock noon, and you will see that
she is a considerable distance from the 12-mile
limit, which is the dotted line.

Red point No. 3 is the position reported by the
North Korean submarine chaser No. 35 at 12
o'clock noon when it signaled the Pueblo to
stop. In other words, this is the position of the
North Korean vessel, this is the position of the
Pueblo ; and the position of the North Korean
vessel that I point to, the red line, the position
reported audibly by the North Korean vessel.
There is very little difference in these two
reports.

Point No. 4 is the position reported by the
North Korean vessel at 1350 — 1 :50 p.m.— when
she reported boarding the Pueblo. And you will
recall that I just told the Council that the
Pueblo, seeking to escape the encirclement, did
not move in the direction which would laave
transgressed the 12-mile limit.

Now, all of this is verified not by reports
solely from the Pueblo ; all of this is verified by

reports from the North Korean vessels which
were monitored; and I think it is a very clear
picture of exactly what transpired.

Here, too, Mr. President, with your permis-
sion, we will make this available.

Mr. President, it is incontrovertible from tliis
type of evidence, which is physical evidence of
international Morse code signals and voice re-
ports, that the Pueblo when first approached
and when seized was in international watei"S
well beyond the 12-mile limit and that the North
Koreans knew this.

Offense Against International Law

Further compounding this ofl'ense against in-
ternational law, and the gravity of this warlike
act, is the fact that the North Koreans clearly
intended to capture the Pueblo, Imowing that it
was in international waters, and force it to sail
into the port of Wonsan. This aim is made clear
by messages exchanged among the North Ko-
rean vessels themselves wliich we monitored,
including the following : "By talking this way,
it will be enough to understand according to
present instructions we will close down the
radio, tie up the personnel, tow it, and enter
port at Wonsan. At present we are on our way to
boarding. We are coming in." This is an exact
voice broadcast from the ship which acknowl-
edges the instructions that it was following.

Now, Mr. President, m light of this, this was
no mere incident, no case of mistaken identity,
no case of mistaken location. It was nothing less
than a deliberate, premeditated armed attack
on a United States naval vessel on the high seas,
an attack whose gravity is underlined by these
simple facts which I should now like to sum up.

The location of the Pueblo in international
waters was fully known to the North Korean
authorities since the broadcasts were not only
between its own ships but were directed to its
shore installations.

The Pueblo was so lightly armed that the
North Koreans in one of the conversations which
we have monitored even reported it as unarmed.

The Pueblo was therefore in no position to
engage in a hostile, warlike act toward the
territory or vessels of Nortli Korea; and the
North Koreans knew this.

Nevertheless, the Pueblo, clearly on the high
seas, was forcilily stopped, boarded, and seized
by North Korean armed vessels. This is a know-
ing and willful aggressive act — part of a
deliberate series of actions in contravention of

196

DEPAETJDENT OF STATE BULLETIN

international law and of solenm international
arrangements designed to keep peace in the area,
which apply not only to land forces but to naval
forces as well. It is an action which no member
of the United Nations could tolerate.

I might add, in light of the comments of the
distinguished Soviet representative on the
adoption of the agenda, that Soviet ships en-
gage in exactly the same activities as the Ptveblo
and sail much closer to the shores of other states.
And one such Soviet ship right now is to be
found in the Sea of Japan and currently is not
far from South Korean shores.

Terrorist Campaign Against South Korea

I turn now to the other grave categoi-y of
aggressive actions taken by the North Korean
authorities: their systematic campaign of in-
filtration, sabotage, and terrorism across the
armistice demarcation line, in gross violation
of the armistice agreement — not only in the vi-
cinity of the demilitarized zone but also in many
cases deep in the territory of the Republic of
Korea — culminating in the recent raid against
the Capital City of Seoul, the Presidential
Palace, and the person of the President of the
Eepublic.

The gravity of this campaign has already
been made known to the Security Council. Last
November 2 I conveyed to the Council a rei^ort
from the United Nations Command in Korea,"
summing up the evidence of a drastic increase in
violations by North Korea of the Korean Ar-
mistice Agreement and subsequent agreements
pertaining thereto. This report, Security Coun-
cil Document S/8217, noted that the number of
incidents involving armed infiltrators from
North Korea had increased from 50 in 1966 to
543 in the first 10 months of 1967 and that the
number of soldiers and civilians killed by these
infiltrators had increased from 39 in 1966 to
144 in the same period of 1967.

The further report of the United Nations
Command for the whole year 1967, filed today ,^
shows a total of 566 incidents for 1967 and a
total of 153 individuals killed by the North
Korean infiltrators. The United Nations Com-
mand in its report has further pointed out that,
although North Korea had refused all requests
by the United Nations Command for investiga-
tion of these incidents by joint observer teams

= For text, see Bot-leti?.- of Nov. 20. 1967, p. 692.
' r.\. doc. S/8366 ; for text, see p. 199.

pursuant to the armistice agreement, the evi-
c^nce that the attacks had been mounted from
North Korea is incontestable. Tliis evidence is
subject to verification by these reports which are
on file with the Security CouucU.

The terrorist campaign, Mr. President, has
now reached a new level of outrage. Last Sun-
day, January 21, security forces of the Republic
of Korea made contact with a group of some 30
armed North Koreans near the Presidential
Palace in Seoul. In a series of engagements both
in Seoul and between Seoul and the demilita-
rized zone, lasting through January 24, about
half of this group were killed and two captured.
It has now been ascertained that the infiltration
team totaled 31 agents, all with the rank of
lieutenant or higher, dispatched from the 124th
North Korean Army Unit; that these agents
had received 2 years' training, including 2 weeks
of training for the jaresent mission, in special
camps established in North Korea for this pur-
pose; and that their assigned mission included
the assassination of the President of the Repub-
lic of Korea.

I might add, Mr. President, that the North
Korean authorities make no secret of the politi-
cal strategy and motivation behind these at-
tacks. Their daily propaganda vilifies the Gov-
ernment of the Republic of Korea and denies
its very right to exist. Yet, Mr. President, this
same Government of the Republic of Korea is
recognized by 77 governments, is a member of
numerous specialized agencies of the United
Nations, and enjoys observer status at the
United Nations headquarters.

Mr. President, it is obvious that this long
series of attacks by North Korean infiltrators
across the demilitarized zone — and by other
groups of North Korean armed personnel
which, traveling by sea, have penetrated into
even the southern portions of South Korea — has
steadily increased in its tempo and its scope
until it threatens to undermine the whole struc-
ture of the armistice regime under which peace
has been preserved in a divided Korea for 14
years.

In the interest of international peace and se-
curity, this deterioration cannot be allowed to
continue. It must be reversed promptly. The
armistice agreements must be restored to their
full vigor, and the weight of the influence of
the Security Council must be exerted to tliis
vitally important end.

ilr. President, these are the facts of the threat
to peace created by North Korea's aggressive

FEBRUARY 12, 1968

197

actions on sea and land. With all earnestness I
ask the Security Council to act firmly and
swiftly to rectify this dangerous situation and
eliminate this threat to peace. Despite the most
serious provocation — a provocation which every
nation would recognize as serious and danger-
ous— my Government is exercising great re-
straint in this matter. We seek to give the proc-
esses of peaceful action all possible scope. We
believe those processes can work swiftly and ef-
fectively, if the international community — in-
cluding the members of this Council, individu-
ally and collectively — so wills it.

But, Mr. President, these peaceful processes
must work. The present situation is not accept-
able, and it cannot be left to drift. This great
and potent organization of peace must not let
the cause of peace in Korea be lost by default to
the highhanded tactics of a lawless regime. Such
a course would be an invitation to catastrophe.

Therefore, let tlie Security Council, with its
great influence, promptly and effectively help
to secure forthwith the safe return of the
Puehlo and her crew and to restore to full
vigor and effectiveness the Korean Armistice
Agreement.

Fellow members of the Security Council, we
have a clear and urgent responsibility imder
the charter to help keep the peace. I trust the
Council will discharge this responsibility.

STATEMENT OF JANUARY 27

U.S./n.N. press release 11

Now, Mr. President, the Hungarian represent-
ative, our colleague. Ambassador [Karoly]
Csatorday, has reverted to the information-
gathering mission to which the U.S.S. Puehlo
was assigned when it was illegally seized on
the high seas in violation of all international
law. He did so and said that there was some-
thing illegal and heinous and improper about
this type of activity.

It is a very strange double standard that the
distinguished representative of Hungary finds
that the mission of the United States ship to be
improper while he is entirely silent about the
activities of the Soviet Union, which maintains
exactly such ships in close proximity to the
United States and many other countries of the
world. Soviet information ships performing

precisely the same functions are currently lo-
cated at numerous places in the Pacific and At-
lantic Oceans and the Mediterranean Sea and
near the shores of a number of countries. And
the activities of the Soviet Union in the Sea of
Japan are by no means novel. They are of long
standing. For the last 8 years, Soviet intelli-
gence-gathering ships have patrolled the seas
and coastal areas of the Sea of Japan collecting
electronic and other information from a wide
variety of sources and places.

Today, this very day, a Soviet vessel is op-
erating in this area, as I indicated yesterday.
And for the information of the Hungarian rep-
resentative, the vessel is the T-48 class sub-
marine ship Gidrolog. Ambassador Morozov
[Platon D. Morozov, representative of the So-
viet Union] will correct me if my pronunciation
is wrong. Now, this ship is roughly the same size
as the Pueblo. It is even larger than the standard
Soviet trawler used for these purposes. It is an
840-ton, 220-feet overall length, 30-foot beam,
20-knot speed, diesel engine, twin-screw ship.
It may be of interest to members of the Council
to know that such ships of the Soviet Navy in
the Sea of Japan frequently sail closer than 12
miles to the shore of neighboring states in the
area.

Now, Lord Caradon [representative of the
United Kingdom], I think, has helped us very
much in this area by pointing up the fact that
all members of the Council should support the
strict enforcement of the armistice agreement.
And it is precisely because the North Korean
authorities are not respecting the armistice
agreement but are violating the armistice agree-
ment that a very grave threat to the peace has
occurred.

Now, part of the difficulty has been that the
machinery set up by the Korean Armistice
Agreement and related agreements, to which the
Democratic People's Republic of Korea is a
party, includes joint observer teams to investi-
gate complaints of violation of the armistice.
Unfortunately, owing to the adamant refusal of
the North Korean side, this observer team ma-
chinery has been almost completely blocked
from the beginning. And much can be said of the
Military Armistice Commission which meets at
Panmunjom. Specifically, and in line with their
past performance, the North Korean side at

198

DEPARTMENT OF STATE BULLETIK

the.se nieetiiifrs continues to refuse to act in any
way on complaints which are made to it, to
agree to investigations by the joint observer
teams — the best way to determine the accuracy
of these complaints that are lodged before the
Armistice Commission — or indeed to make any
use of the Panmunjom meetings except for the
most violent and intemperate propaganda
tirades.

It is our hope, our very sincere hope, that
out of this current meeting of the Council will
come a strong reafBrmation of what I am sure
is the will of the membership of the United Na-
tions manifested by General Assembly decisions
throughout the years : that the armistice agree-
ments be scnipulouslj' adhered to and that the
machinery of the armistice agreement be uti-
lized in order to preserve peace in the area.

U.N. Command in Korea
Submits Special Report

D.S./U.N. press release 10 dated January 27

FoUoxoing is tlm text of a letter to the Security
Council from, Arthur J. Goldberg, U.S. Repre-
sentative to the United Nations, transmitting
the report of the United Nations Command in
Korea on additional incidents which have oc-
curred since tlie report of Novemher 2, 1967.,
on violations iy North Korea of the Military
Armistice Agreement of 1953.

AMBASSADOR GOLDBERG'S LETTER

Janttakt 26, 1968

His Excellency

Mr. Agiia Siiahi

The President of the Security Council

United Nations

New York

De.\r Me. President : I have the honor to con-
vey, on behalf of the United States Government
as the Unified Command, established by Se-
curity Council Kesolution 84 — 7 July 1950
(S/1588), the enclosed report from the United
Nations Command regarding serious violations
by North Korea of the Militarj- Armistice
Agreement of July 27, 1953 which have oc-

curred since the issuance of the last report of the
United Nations Connnand on November 2, 1967
(S/82l7).i

I request that this report be circulated as an
official document of the Security Council.^
Sincerely yours,

Arthtte J. Goldberg

TEXT OF REPORT

Report of the United Nations CJommand to the
United Nations

The Governmeut of the United States, representing
the United Nations Command in Korea, deems it neces-
sary to submit this special report of the United Nations
Command to call the attention of the Security Council
to the recent grave and serious violations by North
Korea of the Military Armistice Agreement of 27 July
1953 and subsequent agreements. Far from having made
any attempt to stop serious violations since the last
United Nations Command report issued on November 2,
1967, North Korea has continued to infiltrate armed
agents into the Republic of Korea for the purpose of
setting ambushes and performing raids in and near
the demilitarized zone and engaging in subversive ac-
tivities tliroughout the country. The most recent inci-
dents, however, are of such magnitude as to create
a grave threat to the maintenance of international
peace and security.

Attempted Assassination of the President
of the Republic of Korea

On 18 January of this year the North Korean regime
dispatched a specially trained team of 31 agents armed
with submachine guns, grenades and e.vi)losives through
the demilitarized zone into the Republic of Korea with
orders to attack the residence of the President of the
Republic of Korea in Seoul and to assassinate President
Chuug-Hee Park. This team of commando-trained as-
sassins penetrated to the very outskirts of the city of
Seoul before the warnings of local citizens and the
actions of the national police thwarted their attempt
on the President's life. The team had reached within
800 meters of the President's residence when halted.

During their progress south through the territory
of the Republic of Korea, the North Korean agents held
four civilians prisoner for five hours. During this time,
the North Koreans interrogated the civilians and
threatened their lives and their village, should they in-
form the authorities of the presence of armed North
Korean agents. Despite these threats, the four civilians
promptly reported the encounter to the authorities of
the Republic of Korea.

Through interrogation of a captured agent it was

"■ For text, see Bulletin of Nov. 20, 1967, p. 692.
' U.N. doc. S/8366.

FEBRUARY 12, 19G8

199

learned that the members of this team had been espe-
cially recruited from units of the North Korean army
and trained for two years for missions of this type
and for two weeks for this specific mission of assas-
sination and terror. This single agent also had knowl-
edge of 2.400 similar agents being trained in eight
specialized camps throughout North Korea to deliber-
ately attack the Republic of Korea.

On January 22 a loudspeaker broadcast by the North
Koreans in the DMZ boasted that "the North Korean
combat unit advanced from Kwung-Bok to Sudae-Mun.
The unit killed a Korean national policeman and the
Chief of Police and destroyed four military trucks . . .
The combat unit escaped from Park's clique and con-
tinued their mission." However, by January 24th North
Koreans had noticed their mistake and re-established
their usual, improbable story that "the South Korean
armed guerrillas attacked the desperately resisting
enemies in Seoul."

As a result of this initial attack, and other attacks
by armed aggressors from North Korea, 18 military
and civilian persons were killed and 39 wounded by
North Korean infiltrators, as shown by the following
table of incidents and casualties :

Incidents and Casualties

Jan. 1-

0600. Jan. 26,

1968

Significant Incidents,

DMZ Area 19

Significant Incidents,

Interior of ROK 22

Exchanges of Fire,

DMZ Area 8

Exchanges of Fire,

Interior of ROK 17

Casualties, North Korean

Killed Within ROK 21

Casualties, North Korean

Captured Within ROK 1

UNC Military Casualties,

Killed Within ROK 11

UNC Military Casualties,

Wounded Within ROK 35

ROK National Police

and Other Civilians

Killed Within ROK 7

Oct. 18, 1967-
Dec. SI, 1967

22

Jan. l~

0600, Jan.
1968

26,

Oct. 18, 1SS7-
Dec. m, 1967

OK National Police

and Other Civilians

Wounded Within ROK

4

0

15

The above figures, taken together with those con-
tained in the last Report of the United Nations Com-
mand issued November 2, 1967, show that in the entire
year 1967 North Korea caused 566 significant incidents
in which 153 individuals were kUled by North Korean
infiltrators.

Conclusions

The fact that this type of "porous war" has been
planned and directed from the highest level of the
North Korean regime has been illustrated on many
occasions by constant reference to these aggressive
policies by leaders of the regime. The most recent, and
blatantly open statement of this intentional aggression
was in the December 16, 1967 speech by the regime
Premier, U-Sung Kim, who said "the northern half
of the Republic is the revolutionary base for accom-
plishing the cause of national liberation on a nation-
wide scale" and who expects his people to "accomplish
the revolutionary cause of unification of the country
at all costs."

When the United Nations Command, in an attempt to
negotiate this serious problem as prescribed by the
Military Armistice Agreement and to restore peace and
security to the area, raised the issue at the 261st meet-
ing of the Military Armistice Commission on January
24, 1968, the Representative of the North Korean side
refused to address the incident in a serious and respon-
sible manner. Concrete evidence, including a filmed
interview of the captured North Korean agent and
large quantities of North Korean arms and munitions,
was dismissed by the Representative of North Korea
who claimed the attack on Seoul was perpetrated by
South Korean citizens. In actual fact, the success of
defensive measures taken by the Government of the
Republic of Korea was in large part due to the whole-
hearted cooperation and participation of private South
Korean citizens. This report clearly shows that North
Korea is carrying out a program in deliberate viola-
tion of the Armistice Agreement. The North Koreans
have continued to refuse to cooperate in using the
machinery established by the Armistice Agreement for
the purpose of supervising the Armistice Agreement,
making efforts to effect redress through this machinery
so far futile.

200

DEPARTMENT OF STATE BULLETIN

Viet-Nam and the Independence of Southeast Asia

hy Zander Secretary Katzenbach ^

It is a pleasure to be in Oklahoma, and it is
always a pleasure to talk to gentlemen of the
press.

Wlien it comes to the press I share the lucid
sentiment of Winston Churchill when he said :
''I am always in favor of the free press but
sometimes they say quite nasty things."

I would like to address myself today to a
controversy on both sides of which many loyal
Americans — not just the press — are too often
tempted to say "quite nasty things."' That
controversy, of course, concerns Viet-Nam.

One does not have to be an epidemiologist to
be aware that there is now abroad in the land
a virus more easily diagnosed than treated. Its
nontechnical name is Southeast Asian flu. Its
symptoms, while they vary somewhat with in-
dividuals, normally include restricted vision,
loss of balance, overactive vocal cords, disturb-
ances of the sympathetic nervous system, and
an inflated body temperature, that is to say,
a loss of cool.

The typical victim indulges in compulsive,
lengthy, and heated debate with anyone at hand.
It is a very tough thing for the victim, this form
of flu. But the disease may be even tougher for
the country.

The causes of the disease are not difficult to
trace. We are fighting in Viet-Nam a difficult,
bloody, costly, and often heartbreaking war.
Thousands of American men have died in it,
and many other thousands have been injured.

It would be unthinkable that there should not,
in this democratic society, be debate and discus-
sion on the war and how it is being fought, for
it deeply touches all of us.

It is a difficult subject to discuss simply be-
cause it is a complex one. The Viet-Nam war
is a limited conflict being fought in a limited
way for limited objectives. It is a war in support

^ Address made before the Oklahoma Pres.s Associa-
tion at Oklahoma City on Jan. 19 (press release 13).

of a sovereign Asian nation with its own views
and objectives, all of which do not always coin-
cide with our own. And the tortured roots of
the conflict stretch back to the murky days of
Japanese-occupied French Indochina.

It is, in short, a war in which the courses of
action are sharply limited, a war beclouded by
an ambiguous history. Fighting such a war,
with circumscribed goals and limited weapon-
ry, is admittedly a frustrating business calling
for a good deal of patience and forbearance. It
upsets people who like to see issues in terms
of simple black and white. And it holds little
appeal for those who like neat and quick
solutions.

It is also correct that those of us who formu-
late or carry out Govermnent policy should
be held to account and criticized when criticism
is thought deserved. We do not claim to have
a monopoly of wisdom, nor do we claim to
have all the answers.

If debate and discussion are to be useful,
however, there must be listeners as well as
speakers. Any real dialog is two-way. Wliat
concerns me about the present debate on Viet-
Nam is that people on all sides are more eager
to talk than to listen. Wliat concerns me also is
that the heat, passion, intensity, intolerance,
and even irrationality generated have produced
divisions where none exist and have drawn
hard lines where none need be drawn.

There has been debate about the way the war
is being fought — what kind of firepower we
should use and whether there should be more
or less of it. Even more impassioned has been
the dispute on the fundamental issue of
whether we should be in Viet-Nam at all. The
latter question is the one that I would like to
take up today. I hope to provide evidence that
we in the administration have been listening to
the dissenters as well as speaking, even if we
do not always take their advice. But, far more

FEBRUARY 12. 1968

201

important, I would like to state the basic issues
as they appear to me. In so doing we can, per-
haps, sort out the strengths and weaknesses of
differing views on the wisdom and justice of
our involvement.

I shall begin by reminding you of the major
reasons why we are in Viet-Nam; then I wDl
turn to the three main grounds of dissent.

Approaches to U.S. Asian Policy

The starting place of understanding in this —
as in almost every aspect of foreign policy — is
history. The decade following the Second
World War saw two events of surjjassing
importance to Asia : the death of Japanese,
French, and Dutch colonial empires and the
birth of Communist China. The former left a
vacuum of power and influence; the latter
brought an eager but, from our point of view,
unfriendly contender to fill that vacuum. The
victory of Mao had brought a militant revolu-
tionary philosophy to the most populated coun-
try in the world, a country which felt keenly
that it had for a century been denied its right-
ful place as a major world power and a dominaf*
ing influence in Asia. Moreover, Communist
China's militancy was shared by its neighbor
and ally. North Viet-Nam.

To our policymakers these events presented a
far from happy choice among three approaches :
First, we might have gambled that Com-
munist China and North Viet-Nam would show
restraint. Or we might have gambled that the
military and political strength of the relatively
small and weak states of Southeast Asia would
be sufficient to hold back the Communists.
Second, we could have concluded that this was
a bad gamble but still consciously written off
the area as not worth the risks and costs of U.S.
involvement. Or, finally, we could have decided
that the independence of the area was worth
preserving even at the price and risks of provid-
ing a temporary umbrella of U.S. power — such
as we had provided in Europe — until the area's
independent nations could grow strong enough
to fend for themselves.

We decided that the nations of Southeast
Asia would in time develop resilience and
strength, that the area could be woven into a
system of independent, mutually supporting
nations which could fulfill their enormous latent
economic and social promise; and for a period
of ahnost 20 years we have acted on the basis of
this judgment. Has this decision been correct?

Promising developments throughout East Asia
in such diverse countries as Thailand, Indonesia,
the Philippines, Korea, Malaysia, and Singa-
pore have given us good reason to believe it has
been.

During this period South Viet-Nam has be-
come the testing ground of our willingness to
provide the great-power support which we have
believed is essential to the independence of
Southeast Asia. We did not choose it as a battle-
field. We would have far preferred never to have
had to defend the independence of any part of
the area. It is an unfortunate fact of life that
the aggressor can often choose the battlefield.
We have, however, chosen to stand fast in sup-
port of South Viet-Nam, not only because we
place a great value on the independence of its
15 million inhabitants but also because we have
felt that the fate of South Viet-Nam was in-
extricably intertwined with the fate of much of
Southeast Asia.

U.S. Commitment In Southeast Asia

In brief outline, this is why we are in Viet-
Nam. I think it is enlightening to see where the
views of the three major groups of dissenters
depart from those of the administration in
terms of this outline.

Some, including no less a spokesman than
Walter Lippmann, have argued that the inde-
pendence of Southeast Asia is not worth the
great price of American involvement in Viet-
Nam. But, surely, Southeast Asia cannot be so
readily dismissed. In its 10 nations live almost
250 million people, more than the combined
population of Latin America and almost that of
Western Europe. It is not as close to us as Latin
America nor as powerful as Western Europe,
but it remains a great and strategic area rich
in both himian and natural resources. Its people
deserve a right to develop in independence as
much as do any other people. If it were swal-
lowed by unfriendly powers, there would result
a significant measure of damage to the position
of the United States and its allies.

In short, I think few of us are either prepared
to write off the independence of a quarter of a
billion people or prepared to see this part of the
world's population turned into enemies of the
United States. Certainly this was the conclusion
the Senate reached in 1955 when it ratified the
SEATO Treaty. The Congress as a whole re-
affirmed this conclusion nearly 10 years later
when it said: "The United States regards as

202

DEPARTMENT OF STATE BtlLLETIN

vital to its national interest and to world peace
the maintenance of international peace and
security in southeast Asia." -

A second group of dissenters would agree that
Southeast Asia cannot be written off but con-
t«nd that the internal problems and self-im-
posed restraint of Communist China and North
Viet-Nam, plus the defensive capabilities of
their smaller neighbors, combine to assure the
safety and independence of such countries as
Laos, Cambodia, Burma, Thailand, Malaysia,
and Singapore without a United States
presence.

The argument is that Ho's appetite is only for
South Viet-Nam and that Mao isn't hungry so
there is no reason to fear that the independence
of Southeast Asia will be swallowed up.

I am afraid that I cannot satisfy myself that
American policy should be formulated on the
basis of so hopeful an assumption. The facts
will simply not fit the assumption unless we
ignore North Vietnamese occupation of much of
Laos, a Communist effort to take over Indo-
nesia, Hanoi-sponsored revolution in northeast
Thailand, a Chinese invasion of India, and a
dozen or so other instances of contrary intent.
Even if we were prepared to believe that North
Vietnamese and Communist Chinese adventures
would end if we left Southeast Asia, our own
faith would not assure the independence of
Southeast Asia if it were not shared by the
countries that would be called upon to face the
consequences of aggression.

For independence can be compromised by
fear of a mighty neighbor as well as by armed
invasion, by threat as well as by assault. The
influence of an aggressive and far stronger
neighbor can and does precede its armies — and
has in far too many cases made the use of force
unnecessary.

The testimony of the neighbors of Communist
China and North Viet-Nam is thus doubly rele-
vant. It bears not only upon the actual risk but
also upon the perceived threat of aggression
which can erode independence slowly, but just
as surely as actual aggression. "With very few
exceptions, indeed, the leaders of these neigh-
boring countries testify to the threat that Amer-
ican withdrawal would mean to them.

Among them are the leaders of countries such
as Thailand, Malaysia, Singapore, and the
Philippines who back the American stand in

' For text of H.J. Res. 1145, see Bulletin of Aug. 24,
1964, p. 268.

Viet-Nam. Even the most independent and non-
aligned of these leaders, such as Singapore's
brilliant Lee Kuan Yew, believe that an aban-
donment of the U.S. role in Viet-Nam would
have disastrous consequences for all of South-
east Asia.

In short, the people of Southeast Asia them-
selves fear for their freedom and independence.
It is they who seek protection from Coimnunist
subversion, and it is they who look with dread
at the militant revolutionary giant of Eed
China to their north. Whether China is truly
an expansionist coimtry, or whether it is too con-
sumed in its own domestic problems, harangues,
and intrigues to follow its aggressive words
with aggressive deeds, is a debatable matter.
But the nervousness of its neighbors is not de-
batable at all. It is a very palpable thing.

Interestingly enough, the fear of an expan-
sionist China is not restricted to some of its
small Asian neighbors. Without endorsing the
following in any way — for I think it is much
exaggerated — let me read you some brief ex-
cerpts from a recent magazine article :

There can now be no doubt that behind the slogan
proclaimed in Peking to the effect that the wind is
blowing from the East is concealed a concrete plan,
which took shape in the minds of Mao Tse-tung and
his associates apparently back in the 1950's. . . .

. . . the main idea . . . amounts to the setting up
of a sort of superstate embracing not only eastern and
central, but later even western Asia. . . .

Mao proposes to include in his "Reich", apart from
China itself, Korea, the Mongolian Peoples' Republic,
Vietnam, Cambodia, Laos, Indonesia, Burma, and sev-
eral other countries in that region. In the second stage
of the "Storm From the East" it is planned to expand
in the direction of the Indian subcontinent, Soviet Cen-
tral Asia and the Soviet Far East. . . .

Without a global atomic conflict, in the course of
which, as Mao has admitted, a "third" or a "half" of
mankind may perish, Maoist diplomacy cannot con-
ceive of the basic plan being carried out. . . . The mil-
itarists in Peking are obviously dreaming of another
Chinese empire, operating formally under the red flag
of socialism, but in fact copying the militarist policy
of the Chinese emperors— the conquerors and manda-
rins of long-forgotten centuries.

Does this hair-raising stuff come from some
harebrained organ of far right anti-Commu-
nist polemics? No, it comes from the Literary
Gazette of Moscow and was written by an influ-
ential Russian commentator named Rostovsky,
who uses the pen name Ernst Henri.

We are in Southeast Asia, then, not out of
ambitions for imperial power or because we
seek to establish a permanent presence. We are
there to help provide enough support to make it

FEBRUARY 12, 1968

203

possible for the nations of the area to develop
unmolested. The assistance we are able to
furnish allows its people to build their own
institutions. We are interested in staying only
until they are strong enough on their own so
they no longer need our presence.

There is, of course, a third group of dissenters
who object to our support of South Viet-Nam
on far narrower grounds. Wliile recognizing our
security interests in Asia and the necessity for
our maintaining a presence there, these critics
are disturbed with the place in which we are
making our stand. Their objections may be
worded in terms of geography, history, or the
problems of the South Vietnamese Government,
but they add up to a single point : Viet-Nam is
not the place to fight.

This group of people have a good point. Had
the choice been ours, perhaps we would not
have picked Viet-Nam either. The terrain
favors guerrillas in their mountain and swamp
bases; Viet-Nam '9 tortured history has left it
with a partial leadership vacuum which is only
now beginning to be filled ; the enemy is experi-
enced and determined, well led and highly
motivated, carrying on a struggle which began
20 years ago ; the enemy has land lines of sup-
port back to sanctuaries outside the area in
which we can use our ground forces ; and so on.
But these factors — naturally disadvantageous
to us — are the very reasons the fight was joined
in Viet-Nam. Since the enemy possessed the ini-
tiative at all times to choose the timing and the
nature of the assault, he naturally chose those
in which he felt he enjoyed the greatest advan-
tage. If our overall strategy was to succeed in
Asia, we really had no choice but to meet the
offensive where it occurred, even on ground on
which we have to jump some difficult hurdles.

Furthermore — and this is really the basic
point on January 19, 1968 — the decision to fight
in Viet-Nam was the product of many decisions
by many people over many years. Right or
wrong — and I happen to think it was right —
it is now too late to look for a nicer, neater
battlefield. History and circumstances have
given us Viet-Nam as the battlefield— and that
is where we must make the decisions which may
well determine the future shape of Asia and our
role in the future of Asia.

During the administrations of our last three
Presidents, decisions and commitments have
been made and policies have been formulated.
Wliether or not every decision was correct,
events have turned our willingness to stand by

these decisions into the test of our entire stance
in Asia. It is too late to attempt to unravel the
strands of our policy. We simply cannot cancel
at this date our specific commitment in Viet-
Nam without undermining our general commit-
ments in Southeast Asia. Nor could we back
down at this time without betraying those
South Vietnamese — numbering in the millions
— who have made it clear that they do not wish
to have their destinies determined by military
force directed from Hanoi.

Dramatic Transformation in Free Asia

A final question remains. In making our
commitments to Southeast Asia, we of course
hoped to deter armed aggression in this area
as it had been deterred before in Europe. We
were prepared to bear the cost of war, but we
hoped there would be no war.

Much of the dissent from our Viet-Nam
policy seems to me to reflect above all else the
fact that the bills are now arriving. The costs
in Ajnericans dead and wounded and Vietnam-
ese killed, in dollars, and even in criticism at
home and from some friends abroad are just
coming in. If, as I believe, the issue has always
been the risks to all of Southeast Asia, and the
stake the independence of 250 million people, it
is fair to ask whether the gains have been worth
the price.

One way of approaching this question is to
compare the costs we are incurring with those
we might expect had we been unwilling to meet
the challenge in Viet-Nam. Even a limited war
with its loss of life is a very great tragedy. But
if it avoids a future choice between world war
III and the loss of Southeast Asia — if that
proves to be the ultimate payoff of our actions —
the tragedy will have been far more than
justified.

Only the future can answer that question.
But we can learn from the past.

I do know that a policy of containment
of the Soviet Union over a period of years has
transferred some Soviet attention from external
conquest to internal development. It has led to
some easing of tension with the United States
and the beginnings of a possible rapprochement
which, although cautious and limited, is dra-
matic when viewed from a perspective of 20
years ago.

I cannot present to you today any clear evi-
dence that Communist China and North
Viet-Nam have yet begim to moderate their

204

DEP^UITKENT OF STATE BULLETIN

aggressive external policies or their repressive
internal behavior, altliough — if such events take
place — future historians may well discern their
roots in the events of the late 1960"s. But I can
present to you today clear and unmistakable
evidence that outside the Communist sphere in
Asia a dramatic transfonnation is taking place.

The record speaks for itself.

Let us first look at economic growth. In Thai-
land it has averaged about 7 percent annually
in recent years. In Malaysia gross national
product has gained some 40 percent over a
recent 5-year period ; it now has the third high-
est per capita income in East Asia. In the Phil-
ippmes, a new rice strain developed at the
International Rice Eesearch Institute at Los
Banos promises to increase productivity dramat-
ically. Adapted to local conditions in other
countries, this advance promises to revolutionize
Southeast Asia's rice culture as did the intro-
duction of new hybrid corns in the case of Thai-
land's agriculture some years ago.

But it is not only in the economic sphere that
progress has been made. Malaysia is a woi-king
democracy despite its ethnically diverse popu-
lation of Malay, Chinese, and Indian stock.
Singapore, with one of the world's largest over-
seas-Chinese communities, not only is a thriving
commercial center but also is firmly anti-Com-
munist. Thailand is moving toward adoption
of a new constitution, to be followed by free
elections. Indonesia, after a long slide under
Sukarno toward economic bankruptcy and
Communist takeover, in a dramatic reversal of
political fortunes has begun to lay the ground-
work for economic and political reconstruction.

These governments have also begun to create
institutions for increased economic, cultural,

and political cooperation. They have had the
support of other countries in East Asia, notably
Japan and Australia. There is now the new
Association of Southeast Asian Nations, in
which Indonesia, Malaysia, the Philippines,
Singapore, and Thailand participate. There is
also the larger Asian and Pacific Council con-
sisting of nine East Asian member countries
and one observer. There is the new Asian De-
velopment Bank, with headquarters in Manila,
designed to bring new development capital and
spur the economic growth of the area. There are
other regional organizations, notably the
Mekong Coordinating Committee, and the U.N.
Economic Commission for Asia and the Far
East, where constructive work on problems of
the region has gone forward for many years.

All of these are Asian institutions working
effectively toward the development of a free,
prosperous, independent Asia.

In short. Southeast Asia is today a region of
growing confidence in its future, and I put it
to you that this confidence is rooted in the spec-
tacle of failure in Communist China and the
firm stand against aggression we and our allies
have taken in Viet-Nam.

Are these gains worth the cost, in the final
analysis ?

Like all basic questions of value and history,
the answer is not subject to scientific analysis.
The answer depends upon the kind of people
we are, the values we hold, the kind of world we
want to live in, how large an effort we are will-
ing to make to achieve that world.

No administration or Congress can decide
such fundamental issues in any final way. In
the end, the American people will have to decide
what kind of world we want to live in and what
our role in building peace should be.

FEBRUARY 12. 19G8

205

Secretary Rusk Discusses Viet-Nam in Canadian Magazine Interview

Following is the text of an interview with
Secretary Rusk hy Blair Fraser^ whi^h af pears
in the February issue of Maclean^s, a Canadian
monthly rnagazine.

Press release 16 dated January 22

Maclean'' s: "What is your personal prediction
of the way the war will end in Viet-Nam ?

Rusk: It is difficult to make a prediction, be-
cause it takes two sides to make peace. The
United States, along with many other govern-
ments, has long sought to end the bloodshed and
to bring the conflict to the conference table —
thus far without success. However, the conflict
could end quickly if the Hanoi Government
simply decides to close out its attempt to take
over South Viet-Nam by force.

Maclean^: "What would you consider to be
reasonable peace terms?

Riisk: What is required to make peace can
be derived from the causes of the present hos-
tilities. U.S. combat forces were introduced into
South Viet-Nam because of the men and arms
sent into the South by Hanoi. We believe that
the special problems of such divided countries
as Germany, Korea, and Viet-Nam must be set-
tled by peaceful means and not by force. We
have treaty commitments in all three instances.
Canada is a member of NATO and participated
with U.N. forces in Korea.

Our view on peace terms can be found in our
Fourteen Points,^ in the seven-nation Manila
communique of October 1966,^ and in the prin-
ciples of the Geneva Accords of 1954 and 1962.
We are prepared to discuss details with those
who can stop the shooting. We will meet with
them at any time without conditions or will
meet to discuss conditions prior to formal
negotiations.

Maclean's: Would it be correct to say these
terms define the war aims of the United States ?

Rush: Yes, since the war aim of the United
States is peace.

^ Bulletin of Feb. 20, 1967, p. 284.

' For text, see iUd., Nov. 14, 1966, p. 730.

Maclean's: How long would it be, in your
opinion, before these aims can be achieved ?

Rusk: I cannot guess how long. The fighting
itself can end as soon as Hanoi decides it is more
in its interest to negotiate a mutually acceptable
settlement than it is to keep on trying to take
over South Viet-Nam by force. Until Hanoi
makes this decision we are obligated to continue
to assist South Viet-Nam to defend itself with
armed force.

In partnership with our Vietnamese allies and
the otiier nations assisting in South Viet-Nam's
defense, we have made significant progress. Re-
peated enemy assaults have been thrown back, at
heavy loss to the other side. Protection against
Viet Cong terror has been steadily extended to
wider segments of the population. Five elections
have been held in the past 18 months for local
officials, the Presidency, and the two legislative
chambers, and institutions for representative
government have thus been established in the
midst of a cruel war. I expect further steady
progress over the coming months.

Maclean^ s : Do you believe the government of
South Viet-Nam would then become self-
sustaining militarily, or would an American
garrison be needed for a longer time ?

Rusk: We have pledged to withdraw our
forces from Viet-Nam wlien the external aggres-
sion against South Viet-Nam ceases. North Viet-
namese personnel and support are withdrawn,
and the level of violence tluis subsides. Under
those circumstances, the Vietnamese Govern-
ment should be able to deal with its own self-
defense requirements.

Maclean's: Do you envisage a united or a per-
manently divided Viet-Nam ? If united, by what
means? If divided, how will peace be kept?

Rxisk : We consider the question of the reuni-
fication of Viet-Nam to be one for the free de-
cision of the Vietnamese people. We would
accept unity through free elections under inter-
national supervision and oppose unity by force.

Realistically, we recognize that there are
great obstacles to reunification. The two parts of

206

DEPARTIVIENT OF STATE BULLETIN

Viet-Nam have developed different political and
social systems. However, we do not believe re-
uuiiication is an impossible goal and are fully
prepared to support the free decision of the
Vietnamese people.

Maclean's : Would the United States tolerate
an elected Communist government in Saigon?
An elected neutralist government i

Rusk: We have long supported the idea of
genuinely free elections in South Viet-Nam to
give the South Vietnamese a government of
their own choice, and we are committed to re-
spect their decision.

We support the development of broadly ba.sed
democratic institutions in South Viet-Nam. We
do not seek the exclusion of any segment of the
South Vietnamese people from peaceful par-
ticipation in their counti-j-'s future. Nor do we
seek to determine the South Vietnamese Govern-
ment's political outlook and orientation.

In the face of the steadfast refusal of the
Viet Cong to engage in peaceful participation,
and their massive efforts to disrupt the recent
series of elections, the success of the South Viet-
namese people in establishing a constitutional,
representative government is truly remarkable.

Ma^leari's: Many Canadians (like many
Americans), who accept the sincerity of Ameri-
can intentions in general in Viet-Nam, are dis-
turbed by the use of antipersonnel weapons such
as fragmentation bombs, napalm, et cetera.
TVliat is the explanation of this policy?

Eu.ik: The weapons you mention are used
to achieve specific and limited military pur-
poses. In this war, as in any other, civilian cas-
ualties are inevitable. They are deeply regretted,
but the most stringent efforts are made to mini-
mize civilian casualties where inflicted by these
or any other weapons at our disposal. Frag-
mentation bombs are used against antiaircraft
weapons sites; napalm is rarely used in North
Viet-Nam ; it has been used in the immediate
battlefield area in and around tlie DMZ. The
real point is, however, that all of the fighting
could stop within hours if Hanoi will help make
peace.

Macleaii's : Do these problems keep you awake
at night, literally ? Or are you able to put them
aside at the end of the working day ? Aside from
your own personal experience, how important
is the problem of sheer physical and intellectual
fatigue among men who have to carry these ter-
rible responsibilities ?

Rusk: A government servant accepts the
burden of responsibility in the knowledge that

he must be prepared to accept, and overcome,
any fatigue which arises. No reasonable human
being contemplates with equanimity the tragedy
of war and the horror and sadness it begets.
But the cost of human freedom is always high,
and most of us believe the price must be paid.

Maclean's: In the internal politics of the
United States, are you confident that the people
will continue to support a war without victory
over a period of years ?

Rusk: I am confident that the people of the
United States will continue to support the ob-
jectives for which we are fighting in Viet-Nam
and the policies that have been framed and de-
veloped mider four Presidents to carry out
these objectives.

Macleans: In our parliamentary syst«m, the
government would be forced to make peace (or
to resign) if it lost the support of a majority
in Parliament. What happens in the American
system if the support for the war in Congress
and among the general public drops below the
50-percent mark — or if the disaffection becomes
clearly apparent in other, practical ways? In
other words, how far can a United States ad-
ministration pursue a policy when the people
have turned against it?

Rusk: The American people conduct their
public business, at the Federal level, through
the President and the Congress. I see no indica-
tion that a majority of our Congress will not
support our effort in Viet-Nam. Indeed, there
is no responsible opinion that we should with-
draw from Viet-Nam. In any event, these mat-
ters are not decided by public opinion polls. If
someone were to ask me "Are you happy about
Viet-Nam?" my answer would be "No." In the
most literal sense no one wants peace in South-
east Asia more than President Joluison. How
to get it is a most complicated question, and
withdrawal is not a way to get it. This is very
broadly understood among the American
people.

MaclearCs: In Canada, discussions of the
Viet-Nam war often include references to our
dependence on a friendly administration in
Washington, and some published reports have
alleged that the present administration resented
the recent suggestion of Honorable Paul Martin
that bombing of North Viet-Nam should be
suspended. Are these reports correct?

Rusk: Relations between governments, es-
pecially friendly governments, have nothing to
do with resentment. Mr. Martin and I see each
other frequently and discuss all of our problems

FEBRUART 12, 1968

207

with each other in some detail. The suggestion
of a "bombing suspension" is not one which
offends the United States. The trouble is that
Hanoi calls a pause an "ultimatum." The point
is that no one in the world can tell us what
would happen if we stopped the bombing.
Hanoi refuses to do so and no one else is able
to do so. But we shall not abandon the effort to
find a peaceful settlement to the problems of
Southeast Asia.

Maclean's: How do you feel about Canada's
willingness to admit American draftdodgers as
immigrants ?

Rush: Canada is fully capable of deciding
for itself which immigrants it wishes to receive.
So far as I know this matter has not been dis-
cussed between our two Governments.

Maclean's: In general, what is the effect of
public criticism by foreign, but normally
friendly, countries ? Is it better to express these
views openly or only in private ? Or not at all ?

Rusk: Canada and the United States have
different responsibilities in the South Pacific.
The United States has alliances with Korea,
Japan, the Republic of China, the Philippines,
Australia, New Zealand, and Thailand. South
Viet-Nam is covered by the SEATO Treaty.
Canada is not a party to any of these treaties
but is a member of the International Control
Commission under the Geneva arrangements.
We would hope that our Canadian friends would
understand that we have a vital stake in the
integrity of our alliances in the Pacific Ocean
area. We might believe that Canada's own na-
tional interests are related to these alliances,
whose purpose is to preserve peace in the
Pacific — but that is a matter for Canada to
decide. On our part, we understand the special
responsibilities which Canada bears as a mem-
ber of the International Control Commission.
These are onerous duties and Canada carries
them with integrity. We cannot ask that other
democracies take steps to restrain public
criticism which we ourselves would not take
in our free society. We do solicit imderstand-
ing — but beyond that we cannot properly go.

Maclean^s: When people mention the so-
called "domino theory" in talking about Viet-
Nam, the usual assumption is that all the
dominoes are standing on end in Southeast Asia
and its immediate neighborhood. Would it be
fair to suggest that some other dominoes seem
to be tottering in other areas — Europe, Latin
America, the United States itself? How do you

strike a balance in appraising these elements of
support and opposition ?

Rusk : I have never talked about the "domino
theory," because it is much too simplistic and
suggests that somehow we are playing games.
The problem is that there are North Vietnamese
regiments today fighting in South Viet-Nam.
There are North Vietnamese armed forces in
Laos being opposed by Laotian forces. There
are North Vietnamese-trained guerrillas operat-
ing in northeast Thailand.

It takes two to make a peace ; and we would
like to see some indication from the other side
that they accept the notion that all countries,
large and small, as the United Nations Charter
puts it, have a right to live in peace without
molestation from across their frontiers.

Wlien that moment comes, there can be peace
veiy quickly indeed; and the United States
will be no obstacle whatever in making a peace
on that basis. As to the situation in other areas,
my own judgment would be that Europe and
Latin America are both making steady progress
in key respects, although there are, of course,
difficulties that may attract disproportionate
attention. I have already commented on the
situation within the United States, as it relates
to the Viet-Nam issue.

Maclean's: Do you regard China as the real
enemy in the Viet-Nam war?

Rusk: No. The aggressor nominates himself
by his own action. U.S. combat forces are in
South Viet-Nam because North Viet-Nam has
been sending men and arms, including regi-
ments of its Regular Army, into South Viet-
Nam. But Chinese attitudes and positions are
not unrelated to Hanoi's policies. What we are
seeking in Asia is an organized and reliable
peace. We are not picking out Peking as some
sort of special enemy. By advocating and abet-
ting the violent overthrow of legally constituted
governments, there is little doubt that Peking
has in practical terms designated itself as a state
antagonistic to what we and virtually every
other state in the world see as the rule of law
and order in international relations. In simple
terms we believe, and have believed throughout
my term of office and before, that if Hanoi were
to take over South Viet-Nam by force, the
effect would be to stimulate the expansionist
ambitions of Commimist China and greatly to
weaken the will and capacity of the independent
nations of Southeast Asia to resist. Thus the
Vietnamese situation has a direct bearing on

208

DEPARTMENT OF STATE BCXLETIN

freedom throughout Southeast Asia, and par-
ticuhirly freedom of the area from Communist
Cliinese pressure and subversion. This connec-
tion is not a new point at all. It has bulked large
in the thinking and expression of President
Johnson, President Kennedy, and their pred-
ecessors, and it plays a major part in the
sympathetic views of the great body of respon-
sible opinion in Southeast Asia toward the
Allied effort in support of South Viet-Nam.

Maclean's: Is there any possibility of im-
proving United States' relations with China
while Mao Tse-tung is alive and ruling the
country ?

Rusk : We would be glad to find some way of
improving our relations with the people of
mainland China, once Peking indicates its will-
ingness to live at peace with other countries in
Asia and with us. We have expressed our hope
for reconciliation. We have sought some sign
from Peking that it is interested in either in-
creasing contacts with the United States or dis-
cussing on a bilateral or multilateral basis such
major problems of peace and security as dis-
armament and an easing of tension in Asia.
Thus far Peking has given us no hint of interest.
It seems to be saying that there is nothing to
discuss between us unless we surrender Taiwan.

Maclean'' s : What is your appraisal of the dan-
ger that the hostility between the United States
and Mao's China may lead to all-out war ?

RvrsJc: We have no hostile intent toward Com-
munist China. We wish to avoid a conflict with
Peking, and we have taken every measure to
avoid such a conflict. We believe Peking knows
this. We think the Chinese also wish to avoid
such a conflict, and I would see no reason to be-
lieve there is any fatal inevitability that it will
occur.

Maclean's: Are you convinced that Mao's
China has adopted a firm policy of military
expansion ?

Ribsh: The Chinese have given ample evidence
in the past that they are not reluctant to use
direct military force across their borders. I
would prefer, however, to emphasize that Pe-
king, by its physical size, its population, its
large army, its developing nuclear capability,
and the policies it espouses, poses a threat which
is real in the minds of other Asians. Peking has
made completely clear its view that the doctrine
and policies which it advocates are the proper
and only appropriate guide for the behavior and
development of all other states, particularly

those in Asia. It shelters the leaders of insur-
rectionary movements from a number of Asian
states and provides them with funds. It helps
to arm and tram their supporters. It publicly
calls for the overthrow of the legitimate gov-
ernments of these states. Wliether the Chinese
themselves physically intend to occupy the coun-
tries around them is less to the point than that
they seem determined, at least at this point in
time, to see the present governments of these
states violently replaced by regimes which ac-
cept Pekmg's main policies.

President Johnson Urges 3-Year
Extension of ACDA Authorization

The White House on January 24- made jmblio
the folloxolng letter from President Johnson to
Huhert H. Humphrey, President of the Senate.
The President sent an identical letter to John
W. McCormack, Speaker of the Hcnise of
Representatives.

White House press release dated January 24

Jantjart 24, 1968

Dear Mr. President: In August 1965, I
said : ^

President Eisenhower and President Kennedy sought,
as I seek now, the pathway to a world in wliich serenity
may one day endure. There is no sane description of a
nuclear war. There is only the blinding light of man's
failure to reason with his fellow man, and then silence.

Now as then arms control is the most urgent
business of our time.

If men can join together with their neighbors
to harness the power of nuclear energy for
peaceful progress, they can transform the world.
If not, they may well destroy the world.

This is the ultimate test of our century. On
our response rests the very survival of this na-
tion and the fate of every living creature on
this planet.

The Arms Control and Disarmament Agency
speaks for the United States in this critical area.

/ urge the Congress to extend its life for
three years and to authorize the necessary
appropriations.

Just over five years ago the world looked over

' BCLLETIN of Sept. 20, 1965, p. 466.

FEBRUARY 12. 1968

209

the brink of nuclear holocaust. The Cuban mis-
sile crisis brought home to every man and woman
the unspeakable personal horror of nuclear war.
It posed the problem, not in terms of megatons
and megadeaths, but in terms of a man s home
destroyed and his family wiped off the face of

the earth. ,

One year later, the world took the first great
step toward nuclear sanity-the Limited Test

Ban Treaty. . .

From that treaty was bom a common spirit
and a common trust. National agendas were re-
vised Priorities were rearranged. Nations
around the world joined in the quest for free-
dom from nuclear terror.

The United Nations passed a resolution
against bombs in orbit. The United States and
the Soviet Union installed a "hot line" between
Washington and Moscow which has already
been used to protect the peace. Last year a new
treaty went into effect to preserve outer space
for the works of peace.

The Arms Control and Disarmament Agency
played a central role in all these important ad-
vances. Now the energy and perseverance of
Director William Foster and his colleagues
have brought us close to the next great step
forward : a treaty banning the spread of nuclear
weapons.

The United States and the Soviet Union have
agreed to a complete draft Non-Proliferation
Treaty and submitted it to the Eighteen-Nation
Disarmament Committee in Geneva for consid-
eration by other nations.^ This draft already
reflects many of the interests and views of the
nations which do not now have nuclear weapons.
We believe such a treaty represents the most
constructive way to avoid the terrible dangers
and the criminal waste which all men recognize
would flow from the further spread of nuclear
weapons.

For at least twenty-five years, this treaty

would :

—Prohibit any nuclear weapon state from
transferring to any recipient, either directly
or indirectfy, any nuclear explosive device or
the control of any such device ;

—Prohibit any nuclear weapon state from

2 For background and text, see ihid., Feb. 5, 1968,
p. 164.

helping non-nuclear weapon nations to develop
their own nuclear weapons ;

—Prohibit any non-nuclear weapon state
from receiving nuclear weapons and from man-
ufacturing its own weapons ;

—Provide for verification that no nuclear ma-
terials are diverted by non-nuclear weapon
states to produce explosive devices ;

—Encourage cooperation between nuclear
and non-nuclear nations to insure that all will
benefit from the peaceful uses of nuclear energy.

This treaty will not end tensions between na-
tions nor will it eliminate the shadow of nu-
clear war which now menaces all mankind. But
it will reduce the chances of nuclear disaster
arising from local disputes.

It will avoid the tragic waste of resources
on nuclear weapon technology by countries
whose first and overriding concern must be eco-
nomic growth and social progress.

And^it will, we hope, bring world-wide ac-
ceptance of nuclear safeguards inspection as
the basic protection which every nation must
afford itself and its neighbors.

This treaty looks to the day when a final an-
swer to the nuclear weapons problem will be
possible. It does not limit the right or capacity
of any present nuclear power to produce nu-
clear weapons. It does call for further negoti-
ations to end the nuclear arms race and to move
down the road to general and complete disar-
mament. . , ^ ,, . ^.
The lesson of the nuclear era is that this most
sacred of human hopes will not be realized
through intimidation of one nation by another
nor by a single stroke of diplomacy. It will
follow months and years of steady, patient
effort. It will come step by step as men grow m
wisdom and nations grow in responsibility.

The Non-Proliferation Treaty is not a crea-
tion of the United States. It is not a creation of
the United States and the Soviet Union It is
the creation of all nations, large and small, who
share the knowledge and the determination that
man can and must and will control these cosmic
forces he has unleashed. _

Wlien this Treaty comes into force, it will be
for all the world the brightest light at the end
of the tunnel since 1945.
Sincerely,

Ltitoon B. Johnson

210

DEPARTMENT OF STATE BULLETIN

In this paper, which was presented before the Marine Science
Panel on December 27 during the annual meeting of the Ameri-
can Association for the Advancement of Science at New York,
N.Y., Mr. Pollack discusses the coinponents of the Departmenfs
task in formulating U.S. foreign policy objectives with respect
to the exploration of the oceans and the peaceful exploitation of
their resources.

National Interest, Foreign Affairs, and the Marine Sciences

by RerTnan Pollack

Director, International Scientific and Technological Affairs

The problems of exploring and using the
deep oceans are not confined to those of a scien-
tific or technical nature. There are opportimities
and risl^s, and there are purposes and tasks,
wliich aU'ect our international relationships and
our foreign policy objectives. The successful
exploration of the world's oceans and the peace-
fid exploitation of their resources will occur
only if based on clear international understand-
ing and agreement.

The relationships between and among nations
inherent to this exploitation are one of the many
areas m which much creative work needs to be
done before the nations of the world can effec-
tively apply today's considerable technological
resources to the search for ocean treasure. The
pattern for international cooperation in the
marine sciences has developed largely in re-
sponse to varying immediate needs or interests.
We believe that we must now look to the creation
of more coherent and comprehensive interna-
tional agreements and understandings if we are
to accommodate expanding interest and oppor-
tunities in this field.

To this end, we will seek to engage the atten-
tion and cooperation of other nations in support
of two basic and clear objectives: to promote
both the study and the use of the world's oceans
and their resources; and to avoid conflict in the
process and, indeed, advance international
amity. In today's world we must seek to do so
without compromising our military security,
while enhancing our commercial and industrial
capabilities. This should be possible.

Since some of vou mav not be familiar with

the interest of the Department of State in the
marine sciences, I shall begin by reviewing that
subject. Then I shall open a discussion of the
major issues in this field of particular concern
to our relationships with other nations.

Let me first point out that the Department
of State is not an operating agency in the field
of oceanography. We conduct no scientific re-
search projects. We do not operate any research
vessels or submersibles. We run no laboratories.
Nor do we conduct any operating programs hav-
ing to do with the exploration of the oceans or
the use of their resources.

Rather, it is our task to formulate United
States foreign policy objectives with respect to
the oceans. As related parts of this task, we must
identify the opportunities and needs for inter-
national arrangements, consider them in rela-
tion to our foreign policy objectives, study the
problems which are foreseen, and finally serve
as a catalyst for appropriate action.

This necessitates relating the diverse inter-
national programs of many Government agen-
cies to clear, attainable national objectives.

This means the negotiation of arrangements
abroail to meet our own needs in the field —
negotiations which cover a broad spectrum ex-
tending from arrangements for specific research
projects to the complexities of the international
law of the sea.

This requires expert assistance in identifying
those opportunities in this field which can sup-
port our foreign policy objectives — and some of
the experts are sitting here today.

It requires an understanding of the interests

FEBRUARY 12, 1968

211

and capabilities of other nations in this field.

It concerns international ground rules for
scientific investigation of the oceans and for ex-
ploitation of their resources.

We have historically been deeply involved in
the negotiation of international agreements on
ocean fisheries. The Department of State is
charged with the implementation of United
States international fishery policies. This is ac-
complished through participation in eight dif-
ferent international fisheries commissions, and
through such international organizations as the
FAO [Food and Agriculture Organization].
The focus of these efforts is the rational use of
the living resources of the sea in consonance
with the principles of conservation.

The Department is also responsible for
United States participation in international
govermnental organizations whose interests re-
late directly to marine matters or impinge on
these matters; for example, the Intergovern-
mental Oceanographic Commission in its con-
sideration of scientific activities in oceanog-
raphy, the Food and Agriculture Organization
in its concern with fisheries, the World Meteor-
ological Organization in its arrangements to
study the effect of the oceans on climate and
weather, the International Maritime Consulta-
tive Organization with respect to shipping
problems and the safety of lives at sea, and the
International Telecommunication Union in
connection with overseas communications.

We also help arrange, or support, bilateral
and multilateral cooperative projects with
foreign governments and foreign scientists in
this field; for example, the recent worldwide
cruise of the Oceanographer and such research
undertakings as the Indian Ocean expedition.

Finally, we seek the development of a co-
herent body of objectives and a comprehensive
plan for their achievement — in short, policy
planning. This is the central task, and it goes
hand in hand with the development of a na-
tional oceanographic program.

Incidentally, we follow closely the views of
nongovernmental scientific organizations such
as ICSU [International Council of Scientific
Unions] and its member committee, SCOE
[Special Committee on Oceanographic Re-
search], in developing national positions. We
support the establishment of relationships be-
tween such groups and related governmental
organizations so that the views of the world
scientific community may be brought to bear

212

continuously on developing policies and pro-
grams.

In all of these tasks the Department works
closely with other departments and agencies.
The Secretary of State is a member of the
National Council on Marine Resources and
Engineering Development, and the Department
is represented on the four conmaittees of the
Council.

In addition, nearly a year ago the Depart-
ment of State established an Interdej^artmental
Committee on International Policy in the Ma-
rine Sciences. The scope of the Committee's in-
terests is iiidicated by the subjects it assigned to
the temporary interagency panels it estab-
lished; for example, scientific cooperation, the
living resources of oceans, and regional cooper-
ation in South America and Europe.

The Committee was originally established on
a temporary basis, and the Secretary of State is
now converting it into a permanent Committee
on International Policy in the Marine Environ-
ment. I anticipate that the principal tasks of
this Committee in the future will relate to
international programs for the exploration of
the oceans and their floors and to the question
of a regime for the floors which lie beyond
present national jurisdictions.

U.N. Debate on Ocean Floor Issues

Let me now open the discussion of some of
the issues relating to the deep ocean floor by
considering briefly the debate in the U.N. Gen-
eral Assembly last fall which focused on the
resolution introduced by Ambassador [Arvid]
Pardo of Malta. That resolution and the reac-
tions to it have involved, at an early state in
their development, many of the major policy
issues which will confront us in the future.

Ambassador Pardo proposed that the Assem-
bly look toward a new international treaty which
would reserve the ocean floor beyond the limit
of national jurisdiction exclusively for peaceful
purposes and establish an international agency
to assume jurisdiction over the deep ocean floor
and its resources. It was his suggestion that the
financial benefits from the exploitation of these
resources be allocated primarily to the less de-
veloped countries.

In debating this resolution the Assembly has
started a dialog on complex and difficult ques-
tions affecting law ; arms control ; international
cooperation, management, and regulation ; and

k

DEPARTMENT OF STATE BtJLLETIN

economic development. Yet we are still without
clear understanding of the full implications
of the proposals contained in the Maltese
resolution.

The United States view, as set forth by Am-
bassador [Arthur J.] Goldber<r in the course of
tlie debate, stressed the importance of compre-
hensive and responsible study, the need for in-
ternational cooperation in exploration of the
ocean floor, and the need for general principles
to guide activities undertaken in this field.^ He
pointed out that the deep ocean floor should not
become a stage for competing national sover-
eignties but should be open to exploration and
use by all states, without discrimination. He em-
phasized the complexity of these issues and
noted the considerable body of existing inter-
national law and treaty rights and obligations
which bear on the subject. He further affirmed
the willingness of the United States to partici-
pate fully in whatever studies are necessary in
determining the future legal regime of the deep
ocean floor.

Some four dozen countries have spoken in the
debate on this subject in the Political Committee
of the General Assembly, representing a wide
range of attitudes and imcertainties. Their
views run all the way from an apparent willing-
ness by some to act now to adopt several of the
principles suggested by Ambassador Pardo to a
reluctance on the part of others to have the
General Assembly involve itself in these issues
or to create a special committee to consider them
seriously. There is lo common view as to the
limits of national jurisdiction over coastal
waters or the adjacent ocean floor. Some advo-
cate, nonetheless, a freeze on the extension of
sovereignty or sovereign rights. There was
throughout the debate a sensitivity on the part
of developing countries to this new manifesta-
tion of the technological gap, evidenced, for ex-
ample, by suggestions that there be no unilateral
exploitation of the resources of the deep ocean
floor.

There is, in short, no consensus among the
U.N. members on the issues or on comprehen-
sive, long-range approaches.

Any conclusions which might be reached as
a result of these discussions should relate as
much to science and technology as to national
political interest. It is what is possible, as well

as desirable, which will govern the activities of
nations in the deep oceans. The political dis-
cussions must have the benefit of the best scien-
tific and technical information available if they
are to be truly meaningful. I agree with the sage
who said : "It is unwise to pursue political goals
sharply at odds with technical realities." It will
be useful to keep this admonition in mind as we
look at the marine issues of particular interest
to future foreign policy.

Alternative to the "Treasure Syndrome"

Tlie nations of the present world stand en-
tranced in much the same frame of mind with
which the nations of Europe viewed the New
World in the 16th century — with the rumors of
immense treasure and riches to be found on the
ocean floor. These estimates are as yet based
more on speculation than on hard fact. Further-
more, one must keep in mind that it will not
suffice to establish the existence of resources in
the seabed and on the ocean floor. It must also
be established that they are recoverable on an
industrial basis and at a competitive price. It
can be safely predicted that the capital invest-
ments required will be huge. But the selling
job has been done — not only in this coimtry but
in others — and international interest is now
high.

Today, as the world turns its attention to the
ocean floor beyond the continental shelf, there
is a genuine searcli on the part of many for
internationally agreed guidelines to the develop-
ment and use of ocean floor resources as an
alternative to the preemptive approaches his-
torically spawned by the treasure syndrome.
President Johnson made a contribution on be-
half of the United States to this discussion when
he said : ^

. . . under no circumstances, we believe, must we
ever allow the prospects of rich harvest and mineral
wealth to create a new form of colonial competition
among the maritime nations. We must be careful to
avoid a race to grab and to hold the lands under the
high seas. We must ensure that the deep seas and the
ocean bottoms are, and remain, the legacy of all human
beings.

Some of the factors which will underlie our
approach to these matters are already clear.

' For background, see Bulletin of Nov. 27, 1967, p.
723, and Jan. 22, 1968, p. 125.

- For remarks by President Johnson made at the
commissioning of the 0< canographcr at Washington.
D.C., on July 13, 1966, see Public Papers of the Presi-
dents, Lyndon B. Johnson, 1966, Book II, p. 722.

FEBRUAET 12, 1968

213

First, the United States enjoys a significant
capability in oceanology, both in research and
applications. In some respects we enjoy a sig-
nificant lead, and our continued commitment to
leadership is essential.

Second, the deep interest, both here and
abroad, in the resources of the ocean floor and
its subsoil compels a response.

Third, we are already confronted with special
pleading and special points of view, such as
those of the landlocked nations, those who would
use revenues primarily for the developing na-
tions, and those who would vest control or man-
agement of the deep seabed in the United
Nations.

Fourth, in the search for meaningful areas for
international cooperation and bridgebuilding
between East and West, North and South, the
attention will increasingly fall on the deep
oceans. Interest is whetted by the attractive
analogy between the possibilities for agreement
on the exploration and use of the resources of
the deep oceans on one hand and agreements
concerning the use of the Antarctic and outer
space on the other — an analogy which is by no
means entirely relevant.

Unknowns in the Equation

Some important factors, then, are known —
it is the unknowns in the equation which con-
tinue to trouble us. There is an old saying that
one requires 60 percent of tlie answer in order
to ask an intelligent question ; and for tlois rea-
son we cannot now pose those questions which
we need to ask if we are going to have the kind
of information on which policy judgments can
be based and which can resolve the political is-
sues which will face us in the near future.

But even if we don't know the questions we do
know some of the characteristics which the an-
swers must have. They must be able to stand
the test of time and accommodate advancing
technology. Provision should be made for sub-
stantive changes as we match our capabilities to
the challenge, but the broad principles should
be durable. We must have answers which will
provide hospitably for major capital invest-
ments while at the same time providing meas-
ures for the resolution of economic and juris-
dictional issues which could lead to conflict. We
must have answers which provide for national
security considerations within the larger con-
text of the broad national interest. In all these

aspects, the answers must be generally accept-
able to other nations.

But first and foremost we will be in no posi-
tion to define wisely international guidelines for
the development and use of the ocean floor
irntil we learn more than we now know about
the deep ocean environment and man's ability
to work in it.

There are several problems which will have
to be taken into account in the work which lies
ahead. For example, the present Convention on
the Continental Shelf ^ defines that shelf as "the
seabed and subsoil of the submarine areas adja-
cent to the coast ... to a depth of 200 meters
or, beyond that limit to where the depth of the
superjacent waters admits of the exploitation of
the natural resources of the said areas. . . ."
In this instance, an increasingly important legal
definition, which determines the extent of na-
tional sovereign rights, rests in part on a chang-
ing technological capability. Yet we do not
know what the practical effect of those changes
will be.

The Convention on Fishing and Conservation
of the Living Resources of the High Seas * per-
mits any coastal state to adopt "unilateral meas-
ures of conservation appropriate to any stock
of fish or other marine resources in any area of
the high seas adjacent to its territorial sea,"
provided, in part, that "the measures adopted
are based on appropriate scientific findings." In
this instance the law defers to science, but we
have relatively little in the way of "appropriate
scientific findings."

And so we need now to intensify the ground-
work and our homework if we are to have ef-
fective international arrangements in this field.
Scientific knowledge, technical readiness, and
national interest are all parts of the whole — and
there can be no sum of the parts. Each must
make its contribution wholeheartedly; a guess-
ing game in any one of the three could be dis-
astrous.

Further, in formulating these guidelines our
response will necessarily be conditioned in part
by military requirements. This aspect of our
national security as it relates to the oceans is
but one, albeit a critical, element in assessing
our total national interest. We shall have to
take into account the considerable attention that

' For text, see Bui,letin of June 30, 1958, p. 1121.
' For text, see ibid., p. 1118.

214

DEPARTMENT OF STATE BULLETIN

has been given over the centuries by tlie nations
of the world to the military uses of the sea.

In conclusion, there is no possibility that the
extending of the sea frontier will be purelj' an
Aniericaia effort. There are other nations with
strong programs in being. We must work within
an international framework in opening the sea
to profitable enterprise. We need to agree on the
obligations and benefits which will accrue to
participating nations. The interests of other na-
tions not now ready to participate must be con-
sidered, including those of landlocked nations.

Above all, we need to have a sense of urgency
in coming to grips with these problems before
conflict arises. To be profitable, ocean exploita-
tion must be peaceful, and I can make it no
plainer than that. Leadership and enduring
solutions, in this age of teclinology, require
active collaboration among scientists, engineers,
and political experts.

President Directs Agencies To Cut
Overseas Personnel and Travel

MEMORANDUM TO THE SECRETARY OF STATE
AND DIRECTOR, BUREAU OF THE BUDGET

White Hoase press release dated January 18

Jant7aky 18, 1968
Subject : Eeduction in U.S. employees
and official travel overseas.

As a part of my program for dealing with
our balance of paj'ments problem, announced on
New Year's day,' I would like you jointl)' to
take the specific measures to reduce U.S. em-
plojTnent and curtail official travel abroad, as
outlined herein. Within the Department of
State, the Senior Interdepartmental Group,
chaired by Under Secretary' [Nicholas deB.]
Katzenbach, shall serve as the focal point for
carrying out this directive.

You should make these reductions in a way
which maintains the effectiveness of our inter-
national programs. I would like you to give
particular attention to personnel reductions
which can be made through relocation and re-

' For background, see Bulletin of Jan. 22, 1968, p.
110.

grouping of functions, the elimination of over-
lappmg and duplication, the discontinuance of
outdated and marginal activities, and a general
streamlining of operations.

I. Reduction in U.S. personnel overseas

This directive applies to all employees under
the jurisdiction of U.S. diplomatic missions and
includes the representatives of all U.S. civilian
agencies which have programs or activities
overseas. It also includes military attaches.
Military Assistance Advisory Groups, and other
military personnel serving under the Ambas-
sadors. It does not apply to U.S. personnel in
Vietnam.

The Secretary of Defense has already ini-
tiated measures to reduce staffing of the mili-
tary assistance program. I am asking the
Secretary to complete these studies in time to
support the goals outlined below.

You are directed to take the following
actions :

1. As a first step, you should proceed, with
appropriate participation hy U.S. Ambassadors
and agencies, to reduce the total number of
American personnel overseas by 10 percent, with
reductions of at least this magnitude applied to
all missions of over 100. Similar reductions
should be made in employment of foreign na-
tionals and contract persomiel. Your decisions
on this first phase, which shall be final, shall be
completed by April 1.

2. You should also initiate a special intensive
review of our activities and staffing in 10 coun-
tries with very large U.S. missions. Your ob-
jective, in this second step, should be to reduce
U.S. employment by substantially more than the
10 percent immediate reduction taken in the
first step. Your final decisions should be made
on this phase by August 1.

3. As a third step, you should proceed to ex-
tend these intensive reviews of U.S. activities
to other countries beyond the first 10 as rapidly
as feasible.

4. Sim.ultaneously, you should initiate special
studies from Washington of functional areas
aimed at reducing instructions, assignments,
and activities which unnecessarily create the
need for maintaining or increasmg overseas
staff, e.g., reporting requirements, consular
work, and administrative support.

Clearly, reductions of this magnitude will
involve major changes in agency staffing and

FEBRUARY 12, 1968

215

personnel plans. I am asking Chairman [John
W.] Macy of the Civil Service Commission to
assist agencies in solving attendant personnel
problems and in facilitating the reassignment
of employees returning to the United States.

II. Curtailment in official travel

I am requesting all Department and agency
heads to reduce official travel outside the U.S. to
the minimum consistent with orderly conduct
of the Government's business. I would like you
to give special attention to measures to minimize
travel to international conferences.

By April 1, 1 would like you to report on the
actions taken in this regard and to recommend
any additional steps required.

Lyndon B. Johnson

MEMORANDUM TO THE HEADS OF EXECUTIVE
DEPARTMENTS AND AGENCIES

White House press release dated January IS

January 18, 1968
Subject : Reduction of Overseas Personnel
and Official Travel

Today I sent the attached memorandum to the
Secretary of State and the Director of the Bu-
reau of the Budget directing them to undertake
a four-part program to reduce United States
personnel overseas. I expect each Department
and agency to cooperate fully in this endeavor.

In addition, I hereby direct the head of each
Department and agency to take steps to reduce
U.S. official travel overseas to the minimum con-
sistent with the orderly conduct of the Govern-
ment's business abroad. I have asked private
U.S. citizens to curtail their own travel outside
the Western Hemisphere in the interest of re-
ducing our balance of payments deficit. Federal
agencies should participate in this effort.

The policy applies particularly to travel to
international conferences held overseas. Heads
of Departments and agencies will take immedi-
ate measures to

—reduce the nmnber of such conferences
attended.

— hold our attendance to a minimum and use
U.S. personnel located at or near conference
site to the extent possible.

— schedule conferences, where possible, in the
U.S. or countries in which excess currencies can
be used.

You should present your plans for travel to
international conferences held overseas to the
Secretary of State, who, with the Director of
the Budget, will undertake a special review of
this matter.

This directive shall not apply to

— travel necessary for permanent change-of-
station for U.S. employees, for their home leave,
and for medical and rest and recuperative leave.

— travel made necessary by measures to re-
duce U.S. employment overseas outlined in the
attached memorandum.

— travel financed from available excess for-
eign currencies.

You are requested to submit to the Director
of the Budget, not later than March 15, a state-
ment on the actions you have taken to reduce
all types of overseas travel, the results expected
from such actions, and your recommendations as
to any additional measures that might be taken.

Lyndon B. Johnson

President Asks AID To Reduce
Balance of Payments Costs

Following is the text of a memorandum from
President JoTinjion to William S. Gaud, Admin-
istrator of the Agency for International De-
velopment.

White House press release (San Antonio, Tex.) dated Janu-
ary 11

Jantjaky 11, 1968
Subject: Additional steps to reduce balance
of payments costs

Your agency has made notable progress over
the past few years in reducing expenditures
made outside of the United States tmder the
economic assistance program. Expenditures for
goods and services purcliased abroad declined
from 27 percent of total AID expenditures in
1963 to 10 percent in 1967. At present, all devel-
opment loans are used exclusively for procure-
ment in the U.S. Eighty percent of grants for
technical and supporting assistance and other
expenses are used to pay for U.S. goods and
services.

In the current situation, however, we cannot
rest on this record. I recently outlined a broad
program to correct the balance of payments

216

department of state bulletin

deficit.' As a part of the government actions
under this program, we must take even more
stringent steps to minimize the balance of pay-
ments costs of our AID programs. I therefore
request tliat you take steps to reduce your
expenditures overseas in calendar 1968 by a
minimum of $100 million below what they
were in 1967.

To achieve this reduction you should take
steps to :

— reduce offshore expenditures for commodi-
ties, cash payments, teclmicians and other serv-
ices to the bare minimum;

— increase the use of U.S.-owned local cur-
rencies that are excess or near-excess to our
needs ;

— increase the contributions of aid receiving
countries in the financing of our technicians and
related costs ;

— carefully review the requirements for per-
sonnel stationed abroad financed with U.S.
funds.

In addition, I would like you to review and
improve the effectiveness of our arrangements
with individual countries to assure that AID-
financed goods are additional to U.S. commer-
cial exports.

I know that the additional measures called
for will be difficult, coming on top of the very
substantial efforts of the last few years. I am
confident, however, that with ingenuity and
resolve we can put into effect the arrangements
necessary to carry on the economic aid program,
which is vital to our interests and to the well-
being of so many people in developing coim-
tries, with even less balance of payments
impact.

April 30 Deadline Set for Claims
for Certain Property in Indonesia

Department Announcement

Press release 18 dated January 25

Information has been received from the Min-
ister for Economy, Finance and Industry of the
Government of Indonesia that April 30, 1968,
has been established as a deadline for the sign-
ing of agreements covering the return to foreign

owners of enterprises (other than Dutch) taken
over by the Indonesian Government during the
Sukarno regime. According to the Indonesian
Government, failure of the owner to sign by
April 30, 1968, will be construed as a waiver by
the owner of the right to obtain return of the
property. Notwithstanding sucli a waiver, the
owner is however entitled to compensation, pay-
able in accordance with the debt rescheduling
terms agreed upon between Indonesia and cer-
tain creditor countries at Paris in December
1966, i.e., payments would be spread out over
8 years commencing in 1971.

With the exception of one small estate, it is
believed that all American-owned enterprises
have been returned to the control of their
owners.

THE CONGRESS

Department Opposes Bills To Bar
U.A.R. and Sudan Cotton Imports

Statement hy Eugene V. Rostow
Under Secretaiy for Political Affairs ^

Thank you for this opportunity to testify
before your subcommittee on the foreign policy
implications of S. 1975 and H.E. 10915, bills
which would permanently bar imports of extra
long staple cotton from the Sudan and the
United Arab Republic.

We believe that the passage of either of these
bills at this time would be contrary to the na-
tional interest. Their enactment could harm our
foreign trade and investment and could con-
flict with our international commitments under
the General Agreement on Tariff's and Trade.
Most importantly, such a step on our part, at
this delicate and pi'omismg moment, would seri-
ously hinder us in our efforts to assist in creating
conditions of peace in the Middle East.

' For background, see Buij.eti>- of Jan. 22, 1968,
p. 110.

' Made before the Subcommittee on Agricultural Pro-
duction, Marketing, and Stabilization of Prices of the
Senate Committee on Agriculture and Fore.stry on Jan.
23 (press release 17).

FEBRUARY 12, 19G8

217

Our liistoric position has been that the ab-
sence of diplomatic relations is not in and of
itself sufficient justification for severing trade
relations. Each case is different and should be
examined on its own merits.

In the particular case at hand, the United
Arab Republic and the Sudan are the only
states in the Middle East which export long
staple cotton to the United States. These Gov-
ernments, along with several others in the area,
chose to break diplomatic relations with us on
the basis of unfounded allegations that the
United States assisted Israel with aircraft and
by other means during the latest Arab-Israeli
conflict last June. These accusations have no
foundation in fact. They are known to be false.
In a dignified and statesmanlike speech. King
Hussein of Jordan expressly repudiated these
charges as based on misinformation. We hope
that other governments will see fit to associate
themselves with his statement in the near future.

We have serious national interests in the Mid-
dle East. We and the nations of Europe have
had close and friendly relations with the peo-
ples and governments of the area for genera-
tions. We have taken a sympathetic interest in
the development of Israel as a progressive and
democratic community, and, like most other
governments of the world, have insisted on its
right to live in peace and security. The Middle
East links three continents. Its airspace and
waterways are of fundamental importance to
the commerce and strategic balance of the world.
Its oil resources are a major factor in the life of
the world economy. The power to deny access to
the Middle East and its resources would be a
matter of grave concern to the United States
and its allies in Europe and elsewhere.

Our Middle Eastern policy has consistently
expressed this strong national interest. For the
last 20 years we have attempted to assist the
states in the area in creating political and eco-
nomic conditions which would lead to peace and
stability. We take the view that peace in the
Middle East should rest on five principles: (1)
respect for the territorial integrity and political
independence of all the states in the area; (2)
justice for the Arab refugees; (3) a status for
Jerusalem which recognizes both its interna-
tional character and its historic identification
with three great world religions; (4) the as-
surance of international maritime rights; and
(5) an end to the arms race.

As you know, it has not been easy to achieve

these goals. The Soviet Union has shipped huge
volumes of arms to certain states in the area and
thus far has refused to consider plans for re-
gional arms limitation. Efforts have been made
to exploit the tensions of the region at the ex-
pense of the constructive and forward-looking
governments which have been working closely
with us in their plans for economic and social
develojjment.

We did eveiything within our power to pre-
vent the latest flareup of the Arab-Israeli dis-
pute. Wlien the explosion occurred, we did our
best to obtain a cease-fire and to move the parties
toward peace. Our diplomacy has been working
around the clock, under Ambassador Goldberg
[U.S. Representative to the United Nations
Arthur J. Goldberg] in New York, and in all
the capitals of the region, to obtain a fair and
evenhanded political settlement of the conflict
so that the region could develop in a condition of
security and peace.

After months of debate, the United Nations
Security Council last November passed a British
resolution,^ wliich was accepted by the parties
to the dispute as a workable basis for negotia-
tion. Under the mandate of this resolution, the
distinguished Swedish diplomat. Ambassador
Gunnar Jarring, is now in the Middle East
meeting with the governments concerned and
trying to assist them in establishing conditions
for a just and durable peace. We believe Am-
bassador Jarring is making jjrogress, and we
are doing all we can to supjiort him in his diffi-
cult and important task.

We regret the fact that many countries in
the area chose to break dijilomatic relations with
us last June. Diplomatic relations are especially
important in times of strain. We wish to do
nothing which would make the restoration of
these relations more difficult when the gov-
ernments concerned are ready for that step.

Against this background, we believe it would
be a mistake at this point, with definite im-
provement in the political atmosphere taking
place, to abolish the long staple cotton quotas
which the United Arab Republic and Sudan
have long been allowed to compete for in our
market. Such an act would impose a new im-
pediment to the restoration of diplomatic re-
lations, and of friendly relations, between the
United States and the states of the region. It
would be resented by all the Arab states, in-

' For text, see Bulletin of Dec. 18, 1967, p. 843.

218

DEPARTMENT OF STATE BULLETIN'

eluding those which have worked with us in
this tense and diHicult period.

We believe the peoples and governments of
the area should know that the door to friendly
and peaceful relations witli the United States
is always open. We have no intention of aban-
doning either our friends or our interests in tliis
part of the world. The elimination of these
quotas would not advance any interest of the
United States. Such a step would play into the
hands of those who are actively seeking to widen
the breach between the United States and the
Arab world and, indeed, to take positions of
control in the internal affairs of the United
Arab Kepublic, Syria, Algeria, and the Yemen.

Enactment of these measures would also
damage our economic interests. Their initial
impact would be a reduction in our imports of
extra long staple cotton. However, their
potential adverse effect on our exports and for-
eign investments should not be overlooked. A
coimtry can hardly be expected to maintain
purchases from us if we refuse to buy from it.
This is a fact we must keep carefully in mind
at a time when we are making a serious effort
to reduce our balance-of-payments deficit.

Trade with the United Arab Kepublic con-
tinues to run heavily in our favor. During the
first 11 months of 1967, January through
November, our exports to the U.A.R. totaled
$63.2 million, while imports from the U.A.R.
■were only $13.9 million, a net export balance of
$49.3 million. This was, of course, purely com-
mercial trade. This pattern corresponds to the
record of recent years. Egypt has consistently
bought more from us than she sold.

Since the break in relations, our export trade
with the U.A.R. has held up better than our
import trade. Exports for the period July to
November, inclusive, totaled $13.6 million,
against imports of $2.8 million, an export
balance of $10.8 million in 5 months.

If the committee so desires, Mr. Chairman, I
can explain exactly how H.R. 10915 and S. 1975,
' if enacted into law, could conflict with interna-
tional commitments of the United States under
the General Agreement on Tariffs and Trade.
I went into this subject in some detail last July
in my appearance before the House committee,'
and I shall not take up your time now with this
problem imless you wish me to do so. Suffice

it to say that a conflict could exist and that
such a step on our part could be regarded
as a breach of our international obligations.

Let me recapitulate, Mr. Chairman. The en-
actment of H.R. 10915 or of S. 1975 :

Would diminish the prospects for peace in
the Middle East;

Would worsen our balance of payments ; and
Could conflict with our international commit-
ments.

IMoreover, it would reduce the flow of com-
merce through the great port of Charleston and
would further reduce the already restricted
right of the textile mills in this country to
choose the raw material best suited to their
needs.

This would be the cost of legislation applying
to less than 1 percent of the cotton produced
in this country.

If the Congress decides that our national
policy now requires additional inducements to
assist domestic producers of extra long staple
cotton, I submit that the Hayden bill, H.R.
10864, which has been passed by the Senate,
would accomplish this legitimate goal without
doing violence to our country's foreign policy
objectives.

TREATY INFORMATION

Current Actions

' For text of Under Secretary Bostow's statement of
July 12, 1967, see ibid., Aug. 21, 1967, p. 236.

MULTILATERAL

Aviation

Convention on international civil aviation. Done at Chi-
cago December 7, 1944. Entered into force April 4,
1947. TIAS 1591.
Adherence deposited: Burundi, January 19, 1968.

International air services transit agreement. Done at
Chicago December 7, 1944. Entered into force for the
United States February 8, 1945. 59 Stat. 1693.
Adherence deposited: Burundi, January 19, 1968.

Fisheries

Convention on conduct of fishing oijerations in the
North Atlantic, vrith annexes. Done at London June
1. 1!X;7.'

' Not in force.

FEBRUABY 12, 1968

219

Signatures: Be\sixim, November 1-, ^^7 ^anaxla,
November 28, 1967; Denmark, November 24, 1967
Federal Republic of Germany, November 15, WO^,
Ireland November 29, 1967 ; Italy, November 9,
1967; Netherlands (for the Kingdom m Europe),
November 30, 1967; Norway, November 22, 1967,
Poland (with reservations), November 29, 1967
Spain (with reservations), November 29, 1967.
Sweden, November 27, 1967.

Maritime Matters

Convention on facilitation of international maritime
traffic with annex. Done at London April 9 lJfe5.
Enter^^l^nto force for the United States May 16,
1967. TIAS 6251. , ^ ^ c iqaq

Acceptance deposited: Denmark, January 9, 1968.

Publications

Convention concerning t^^Vnternational exchange of
pubUcations. Adopted at Pans December 3, 1958 En-
ters into force for the United States June ^ 1968.
Proclaimed hy the President: January 16, }^\

Convention concerning the exchange of official imbli-
cations and government documents between states,
with proc&s-verbal. Adopted at Paris December 3.
1958. Enters into force for the United States June

Proclaimed by the President: January 16, 1968.

Racial Discrimination

International convention on the elimination of all forms
of racial discrimination. Adopted by the United Na-
tions General Assembly December 21, 196o
Signatures: Luxembourg. December 12, 19b7 ; Mada-
gascar (with a reservation), December 18, 19t>7.

Safety at Sea

International convention for the safety of Ufe at sea.
1960 Done at London June 17, 1960. Entered into
force May 26, 1965. TIAS 5780 ^n -.qrt

Acceptance deposited: Australia, December 20 1967.

Amendments to chapter II of the international con^
vention for the safety of life at sea, 1960 (TIAS
5780). Adopted at London November 30, 19t>b.
Acceptance deposited: Netherlands (including Neth-
erlands Antilles) , December 29. 1967.

Botswana

Agreement relaUng to investment guaranties. Signed
at Gaberones January 12, 1968. Entered into force
January 12. 1968.

Guatemala

Agreement relating to the reciprocal granting of au-
thorizations to permit licensed amateur radio opera-
tors of either country to operate their stations in the
other country. Effected by exchange of notes at
Guatemala November 30 and December U. 1967. in-
ters into force 30 days from the date of the Guate-
malan note notifying the United States that it has
approved the agreement in accordance with its con-
stitutional procedures.

Indonesia

Memorandum of agreement regarding the reschedul-
ing of payments under the surplus property agree-
ment of May 28. 1947 (TIAS 1750), as extended
Signed at Djakarta December 30, 1967. Entered into
force December 30, 1967.

Air transport agreement. Signed at Djakarta January
15, 1968. Entered into force January 15, 1968.

Japan

Agreement relating to the establishment of an Advisory
Committee to the High Commissioner of Ryukyu
Islands in Naha. Effected by exchange of notes at
Tokyo January 19, 1968. Entered into force January

19.1968. ^ ^., „,

Arrangement relating to trade in cotton textiles. li.t-
fected by exchanges of notes and letters at Washing-
ton January 12, 1968. Entered into force January 12,
1968 ; effective January 1, 1968.

Pakistan

A-reement for sales of agricultural commodities, re-
lating to the agreement of May 11, 1967 (TIAS 6258).
Signed at Islamabad December 26. 1967. Entered in-
to force December 26, 1967.

BILATERAL

Bolivia

Agreement for sales of agricultural commodities under
title I of the Agricultural Trade Development and
Assistance Act of 1954. as amended (68 Stat 454, as
amended; 7 U.S.C. 1691-1736D), with annex. Signed
at La Paz January 16, 1968. Entered into force Janu-
ary 16, 1968.

Agreement for sales of agricultural commodities, re-
lating to the agreement of January 16, 1968. Signed
at La Paz January 16. 1968. Entered into force Jan-
uary 16, 1968.

'■ Not in force.

DEPARTMENT AND FOREIGN SERVICE

Appointments

Thomas H. E. Quimby as Deputy Assistant Secretary
for African Affairs, effective January 22. (For bio-
graphic details, see Department of State press release
dated January 22.)

220

DEPARTMENT OF STATE BULLETIN

INDEX February 12, 196S Vol. LVIII, No. 11^91^

Africa. Qiiimby appointed Deputy Assistant
Secretary 220

Agriculture. Department Opposes Bills To Bar

U.A.R. and Sudan Cotton Imports (Kostow) . 217

Asia. Viet-Nam and the Independence of Soutli-
east Asia (Katzenbach) 201

Atomic Energy. Pi-esident .lolinson I'rges 3- Year
Extension of ACDA Authorization (Johnson) . 209

China. Secretary Rusk Discusses Viet-Nam in
Canailian Magazine Interview (transcript) . 206

Claims. April 30 Deadline Set for Claims for
Certain Property in Indonesia 217

Congress

Department Opposes Bills To Bar U.A.R. and

Sudan Cotton Imports (Rostow) 217

President Johnson Urges 3- Year Extension of

ACDA Authorization (Johnson) 209

Department and Foreign Service

.Appointments (Qulmby) 220

President Directs Agencies To Cut Overseas Per-
sonnel and Travel (John.son) 215

Disarmament. President Johnson Urges 3- Year
Extension of ACDA Authorization (Johnson) . 209

Economic Affairs

Department Opposes Bills To Bar U.A.R. anil

Sudan Cotton Imports (Rostow) 217

National Intere.st, Foreign Affairs, and the
Marine Sciences (Pollack) 211

President Asks AID To Reduce Balance of Pay-
ments Costs 216

President Directs Agencies To Cut Overseas Per-
sonnel and Travel (Johnson) 215

Foreign Aid. President Asks AID To Reduce
Balance of Payment Costs 216

Indonesia. April 30 Deadline Set for Claims for
Certain Property in Indonesia 217

Korea

The Crisis in Korea (Johnson. Rusk, related
statements) 189

U.N. Command in Korea Submits Special Report

(Goldberg, text of report) 199

U.N. Securitv Council Begins Debate on Korea

(Goldberg) 193

Military Affairs

The Crisis in Korea (Johnson, Rusk, related

statements) 189

U.X. Security Council Begins Debate on Korea

(Goldberg) 193

Near East. Department Opposes Bills To Bar

U.A.R. and Sudan Cotton Imports (Rostow) . 217

Presidential Documents

The Crisis in Korea 189

President Asks AID to Reduce Balance of I'ay-
ments Costs 216

President Directs Agencies To Cut Overseas Per-
sonnel and Travel 215

President Johnson Urges 3-Year Extension of
ACDA Authorization 209

Science. National Interest, Foreign Affairs, and

the Marine Sciences (Pollack) 211

Sudan. Department Opposes Bills To Bar U.A.R.
and Sudan Cotton Imports (Rostow) . . . 217

Treaty Information. Current Actions .... 219

United Arab Republic. Department Opposes Bills
To Bar U.A.R. iuid Sudan Cotton Imijorts
(Rostow) 217

United Nations

National Interest, Foreign Affairs, and the Ma-
rine Sciences (Pollack) 211

U.N. Command in Korea Submits Special Report

(Goldberg, text of report) 199

U.N. Security Council Begins Debate on Korea

(Goldberg) 193

Viet-Nam

Secretary Rusk Discusses Viet-Nam in Canadian

Magazine Interview (transcript) 206

Viet-Nam and the Independence of Southeast

Asia (Katzenbach) 201

Name Indea

Goldberg, Arthur J 193,199

Johnson, President 189, 209, 215, 216

Katzenbach, Nicholas deB 201

Pollack, Herman 211

Quimby, Thomas H. E 220

Rostow, Eugene V 217

Rusk, Secretary 189,206

Check List of Department of State
Press Releases: January 22-28

Press releases may be obtained from the OflBce
of News, Department of State, Washington, D.C.
20520.

Release is.sued prior to January 22 which ap-
pears in this i.ssue of the Bulletin is No. 13 of
January 19.

No. Date Subject

10 1/22 Rusk : interview for Maclean's maga-
zine.

17 1/23 Rostow : Senate Subcommittee on
Agricultural Production. Market-
ing, and Stabilization of Prices.

IS 1/25 Indonesia sets deadline for filing
propert.V claims.
*19 1/27 Foreign policy conference. Phoenix,

Ariz., February 23.
fliO 1/26 Rostow : " 'A Certain Restlessness'
About Viet-Nam."

•Not printed.

t Held for a later issue of the Bulletin.

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u.s. government printing office

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i

THE OFFICIAL AVEKKLY RECOKD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

OF

STATE

BULLETIN

Vol. LVIII, No. U95

February 19, 1968

PRESIDENT JOHNSON'S NEWS CONFERENCE OF FEBRUARY 2 (Excerpts) 221

"SHARE IN FREEDOM"

Address by Secretanj Rush 228

THE CENTRAL THEMES OF U.S. POLICY TOWARD EUROPE

by Ambassador George G. McGhee

THE BUDGET OF THE UNITED STATES GOVERNMENT— FISCAL YEAR 1969

(EXCERPTS) 2Ji5

For index see inside hack cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1495
February 19, 1968

For sale by the Superintendent of Documents

U.S. Government Printing OflSce

Washington, D.C. 20402

PRICE:

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Use ot funds for printing of this publication
approved by the Director of the Bureau of
the Budget (January 11, 1966).

Note: Contents of this publication are not
copyrighted and items contained herein may be
reprinted. Citation of the DEPARTMENT OF
STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed In
the Headers' Guide to Periodical Literature.

The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
with information on developments in
the field of foreign rela tions and on
the work of the Department of State
and the Foreign Service.
The BULLETIN includes selected
press releases on foreign policy, issued
by the White House and the Depart-
ment, and statements and addresses
nuide by the President and by the
Secretary of State and other officers
of the Department, as well as special
articles on various phases of interna-
tional affairs and the functions of the
Department. Information is included
concerning treaties and international
agreements to ivhich the United
States is or rruiy become a party
and treaties of general international
interest.

Publications of the Department,
United Nations documents, and leg-
islative material in the field of inter-
national relations are listed currently.

President Johnson's News Conference of February 2

FoUoioing are excerpts from the official trans-
cript of a news conference held hy President
Johnson in the Cabinet Room at the White
House on February 2.

OPENING STATEMENT 1

"We liave known for several naonths now that
the Communists planned a massive winter-
spring offensive. "We have detailed information
on Ho Chi ISIinh's order governing that offen-
sive. Part of it is called a "general uprising."

"We Icnow the object was to overthrow the con-
stitutional government in Saigon and to create
a situation in which we and the Vietnamese
would be willing to accept a Communist-domi-
nated coalition government.

Another part of that offensive was planned as
a massive attack across the frontiers of South
Viet-Nam by North Vietnamese units. We have
already seen the general uprising.

General "Westmoreland's [Gen. "William C.
"^Westmoreland, Commander, U.S. Military As-
sistance Command, Viet-Nam] headquarters re-
port the Communists appear to have lost over
10,000 men killed and some 2,300 detained. The
United States has lost 249 men killed. The Viet-
namese, who had to carry the brunt of the fight-
ing in the cities, lost 553 killed, as of my most
recent report from the Westmoreland head-
quarters.

There were also a number of attacks on
United States airfields throughout the country.
We have confirmed the loss of 15 fixed-wing
aircraft, and 23 helicopters were destroyed. A
good many more were damaged but will be re-
turned to service.

'An advance text of the President's opening state-
ment was issued as a VPTiite House press release on
Feb. 2.

This is a small jiroportion of our aircraft and
helicopters available in that area. Secretary [of
Defense Robert S.] McNamara, General West-
moreland, and the Joint Chiefs of Staff do not
think that our military operations will be mate-
rially affected.

The biggest fact is that the stated purposes of
the general uprising have failed. Communist
leaders counted on popular support in the cities
for their effort. They found little or none. On
the other hand, there have been civilian casual-
ties and disruption of public services. Just be-
fore I came into the room, I read a long cable
from Ambassador Bunker [American Ambassa-
dor to the Republic of "V'iet-Nam Ellsworth
Bunker] which described the vigor with which
the Vietnamese Government and our o^vn people
are working together to deal with the problems
of restoring civilian services and order in all of
the cities.

In the meanwhile, we may at this very mo-
ment be on the eve of a major enemy offensive
in the area of lOie Sanh and generally around
the demilitarized zone.

We have known for some time that this of-
fensive was planned by the enemy. Over recent
weeks I have been in close touch with General
Westmoreland, and in recent days in very close
touch with all of our Joint Chiefs of Staff to
make sure that every single thing that General
Westmoreland believed that he needed at this
time was available to him and that our Joint
Chiefs believe that his strategy was sound, his
men were sure, and they were amply supplied.

I am confident in the light of the information
given to me that our men and the South Viet-
namese will be giving a good account of
themselves.

As all of you know, the situation is a fluid
one. We will keep the American people in-
formed as these matters develop.

I would be glad to take any questions.

FEBRUARY 19, 1968

221

QUESTIONS AND ANSWERS

Q. Mr. President, in your state of the Union
message"^ you said we mere exploring certain
80-caIled offers from Hanoi and as soon as you
could you would report to the -peofle on that. Is
there anything you can tell us today about the
status of possible peace negotiations with them?

The President: No. I would think that that
statement is about as good as I could make on
that general subject. That accurately describes
what has been going on and what is going on. I
do not have any success or results to report on it.

Q. Mr. President, does this present rampage
in South Viet-Nam give you any reason to
change any assessment that you have made pre-
viously about the situation in South Viet-Nam?

The President: I am sure that we will make
adjustments to what we are doing there.

Insofar as changing our basic strategy, the
answer would be "No." I think that there will
be changes made here and there as a result of
experience that comes from efforts such as they
have made. Our best experts think that they
had two purposes in mind.

First was a military success. That has been a
complete failure. That is not to say that they
have not disrupted services. It is just like when
we have a riot in a town or when we have a very
serious strike or bridges go out or lights — power
failures and things. They have disrupted serv-
ices. A few bandits can do that in any city in the
land.

Obviously, they have in the Viet Cong hun-
dreds and thousands; so it is nothing unex-
pected to anticipate that they will try in cooper-
ation with their friends from the North to
coordinate their activities.

The ferocity and the violence, the lack of — the
deception and the lack of concern for the basic
elements that appeal to human beings — they
may have shocked a lot of people in that respect.

The ability to do what they have done has
been anticipated, prepared for, and met. Now,
so much for the military movements. This is not
just a civilian judgment. This is the judgment
of the military men in the field, for whatever

' Bulletin of Feb. 5, 1968, p. 161.

that judgment is worth to us back here as ex-
pert Monday morning quarterbacks.

That is the judgment of the best military
advice I have here. I met with them yesterday
at lunch at some length. I had General [Mat-
thew B.] Ridgway come down and spend some
time with me and talked to him.

I have spent a good deal of time talking to
General [Maxwell D.] Taylor. I had all of the
Joint Chiefs of Staff in yesterday. We explored
and discussed what had happened, what was
happening, what might happen, and so forth,

I have talked to the Pentagon this morning,
very early, and have been in touch with Secre-
tary McNamara before his testimony.

Their general conclusion is that as a military
movement it has been a failure.

Their second objective, obviously, from the —
what you can see from not only Viet-Nam but
from other Communist capitals, even fi-om some
unknowing people here at home, is a psycholog-
ical victory.

We have to realize that in moments of tense-
ness and trial, as we will have today and as we
had in the past days, that there will be a great
effort to exploit that and let that substitute for
military victory they have not achieved.

I do not believe when the American people
know the facts, when the world knows the
facts, and when the results are laid out for
them to examine, I do not believe that they will
achieve a psychological victory.

I do not want to be interpreted as unduly
optimistic at all. I would rather wait and let the
facts speak for themselves, because there are
many things that one far removed from the
scene cannot anticipate.

In all of the battles there are many disap-
pointments for the commanders and even the
commanders in chief.

So I think at this very critical stage I would
much prefer to be played low key than to give
any false assurances. I can only say this: that
based on the best military advice that I have,
I feel confident that the men will give a good
accounting of themselves. . . .

The Crew of the Pueblo

Q. Mr. President, sir, I was going to shift
from that question in view of what you said
to another question. Have you any news on the
crew of the Pueblo?

222

DEPAKTMENT OF STATE BULLETIN

The President: "We understand from neutral
nations and from reports from North Korea
that the men are being treated well, that those
wlio have suffered wounds are receiving treat-
ment, that the body of the man who died is
being held. We have received those reports and
examined them. That is about the extent of the
information we have on it.

Q. Did you say "meri^ or "man'^?

The President : Man.

Q. Are you confident that we can get hack
both the ship and the crew?

The President: No, I am not. I don't want to
hold out any hopes on information that I have.
It is not justified. All I can say is that things
take time.

The most comparable incident, I am told
by the military people, to this one was the
RB-iT that went down in 1960, and it took some
7 months of negotiations to get our pilots back.

We are exploring every diplomatic means
that is available to us. We have our best military
men reviewing all that happened, and, as I said
in my statement to you and to the country some
time ago,' we are taking such precautionary
steps as we may think the military situation
calls for.

San Antonio Formula

Q. Clark Clifford's [Secretary of Defense-
designate^ testimony before the Armed Serv-
ices Com/mittee has raised some questions about
the San Antonio formula.*

The President: Only in the press; not with
anyone in the administration. Mr. Cliiford said
what I had said, what Secretary Rusk said,
what everybody said, so far as the San Antonio
formula is concerned. The country should know
once and for all this morning that Mr. Clifford
said what I said in San Antonio.

I U.S. Troop Deployment

Q. Is it possible that these developments in
Viet-Nam that you had outlined., plus the im-
minence of this major offensive, could lead to

', additional deployment of combat troops to

l\ Viet-Nam?

TJie President: I would not want to make

predictions. Of course it is possible. The answer
is "Yes." I wouldn't want your lead to say
"Johnson predicts," or "that is anticipated,"
but we see no evidence of that.

Yesterday I saw that George [George Chris-
tian, Press Secretary to the President] said of
course we would consider calling up specialists.
I must emphasize to you that lots of things will
be considered, but so far as adding additional
men, we have added the men that General West-
moreland has felt to be desirable and necessary.

There is nothing that has developed there that
has caused him to change that estimate. We have
sometliing under 500,000. Our objective is 525,-
000. Most of the combat battalions have already
been supplied. There is not anything in any of
the developments that would justify the press
in leaving the impression that any great new
overall moves are going to be made that would
involve substantial movements in that direction.

I would not want to foreclose any action on a
matter like this. Anything can happen on a
moment's notice. We have constantly under
advisement various moves we would want to
consider. After reviewing them now for several
days, I have not seen the requirement or the
necessity, nor have the Joint Chiefs, of making
any additional requests to the Congress at this
time involving additional authority.

It would be desirable, as it was last year, to
have legislation a little more generous in a re-
spect or two — maybe more funds appropriated
for military assistance that were reduced. We
may have to get some adjustments in those fields,
but no new legislation is imminent at this
moment.

Q. Mr. President, how much, if any, definite
information do you have on the connection be-
tween the Pueblo incident and ivhat is happen-
ing now in Viet-Nam?

The President: I do not have evidence that
would say that they are definitely, positively,
one and the same here, because I cannot prove
that. Practically every expert I have talked to
on Korea and North Viet-Nam and the Com-
mimist operation — all of them, I think without
exception, believe there is definite connection. I

' For an address to the Nation made by President
Johnson on Jan. 2G, see iMd., Feb. 12, 1968, p. 189.

* For an address made by President Johnson at San
Antonio, Tex., on Sept. 29, 1967, see Hid., Oct. 23, 1967,
p. 519.

FEBKUART 19, 1968

223

would have you know, though, that is based on
their oiiinion and not on hard evidence that I
could establish to CBS's satisfaction m a court
of law.

Q. Mr. President, in light of what has hap-
pened in the last few days, or going hack to the
Pueblo incident, do you have any reason to Re-
lieve that in the last 2 years there have heen
any genuine peace feelers put out by the North
Vietnamese or other Vietnamese Communists,
or have they been phony, except when they loere
winning in ^6^.?

The President: We have tried to explore
every suggestion made by enemy and friend. I
must say that in retrospect I do not think we
have overlooked anything, and I do not think
that we have found anything that would give an
impartial judge reason to be encouraged.

U.S. Policies and Strategy

Q. Do you see anything in the developments
this week in these attacks in Viet-Nam that
causes you to think, to reevalitate, some of the
assumptions on which our policies and strategy
there has been based? I a7n thinking in ter7ns of
the security ratings, amount of population that
is considered under government control? Do
you thijik the basic ass'mnption is still valid?

The President: We do that every week. I
would see nothing that would indicate that that
should not be done. We must, all the time, try
to keep up and to be sure we have not made any
mistakes. If you are saying, Have we felt that
what happened could not happen? the answer
is "No." As a matter of fact, Mr. Bailey, if you
have seen any of the intelligence reports, the in-
formation has been very clear that two things
would happen:

One is that there would be a general uprising,
as I stated.

Two, there would be a general invasion and
attempt to secure military victory and that the
objective would be to get a military victory and
a psychological victory. That is one of the great
problems the President has to deal with. He is
sitting there reading these information reports
while his own people, a good many of the best
intentioned, are supplying him with military
strategy, and the two do not fit in.

So you have to be tolerant and understand

their best intentions while you are looking at
the other fellow's hole card. That is what Gen-
eral Westmoreland has been doing while all
of these Monday morning quarterbacks are
pointing out to him that this is the way he
should move or this is the way you should not
move.

This is part of what happens when you look
at history. It may be that General Westmore-
land makes some serious mistakes or that I make
some. We don't know. We are just acting in
light of the information we have. We believe
we have information about what they are trying
to do there. We have taken every precaution we
know of. But we don't want to give you as-
surance that all will be satisfactory. We see
notliing that would require any change of great
consequence.

We will have to move men from this place
to that one. We will have to rep)lace helicopters.
Probably we had 100-odd helicopters and planes
seriously damaged, and we will have to replace
them. Secretary McNamara told me he could
have that done very shortly.

We will have to replace the 38 planes lost,
but we have approximately 5,900 planes there.
We anticipate that we will lose 25 or 30
every month just from normal crashes and so
forth. . . .

Q. Mr. President, do you believe, sir, their
winter-spring offensive and their call for an
uprising and their attempt to impose a coalition
government is based on their belief that they
are taking military punishment that they can-
not sustain for a long time? In short, sir, are
we still winning the war?

The President: 1 think I see nothing in the
developments that would indicate that the
evaluation that I have had of this situation
throughout the month should be changed.

I do think that the second phase is iimninent.
Wliat we expected is upon us. We have gone
through the first phase of it. We will have to see
what happens in the second phase. If it comes
out as expected, I think I can give you a better
answer to your question when it is over with.

I don't want to pro^jhesy on what is gomg to
happen or why. We feel reasonably sure of our
strength.

Q. Mr. President, one of the problems people
seem to be having in making up their minds on

22i

DEPARTMENT OF STATE BULLETIN

the psychological importance goes hack to our
reports that the Viet Cong were really way
down in moraJe, that they were a shattered
force.

Now people ask: IIo^p, then, can they -find the
people who are so u'ell-motivated to run these
suicide attacks in so many places in such good
coordination? Some people say: It proves that
they know they are licked and this is their last
ditch. Some people say: They do have the
morale.

Viet Cong Morale

The President: I have not read those so-called
"our reports of their morale being really way
dovm" or that there were no more problems.
That is not the information we have received.

We do think that we have made progress
there. "We don't want to overplay it or play it
in high key. We want to state it because we be-
lieve it is true.

No one in authority has ever felt, as far as
I know, that you could not have an uprising of
this kind, particularly when they have ordered
it and predicted it and we have been expecting
it.

As I view history, I think that you have
things of this type replete throughout. You can
expect it. I see it even in domestic problems.
The fact that people's morale may be suifering
and they may be having great difficulty does not
keep them from breaking glass windows or
shooting folks in a store or dashing into your
home or trying to assassinate somebody. That
goes with it. That is part of the pattern.

Wliether they are doing this from a position
of greater strength or greater weakness — I
would say neither. I don't think they are as
weak as j'ou picture them in your straw man
that you place up there — that the Government
has this feeling. I don't think we feel that way.

I think we know that the march on the
Pentagon can tie up things and disrupt things
here. I think we can see what happened in
Detroit. I think we can see what happened in
Saigon.

I think there are times when a few highly
energetic and courageous people could seize an
airport. But could they hold it? Does it endure?
Is it a victory? Do they pay more than it is
•worth and so on and so forth? Those are the
things that we have to evaluate.

I am not a great strategist and tactician. I
know that you are not. Let us assume that the
best figures we can have are from our re-
sponsible military commanders. They say 10,000
died and we lost 249 and the South Vietnamese
lost 500. That does not look like a Communist
victory. I can coimt. It looks like somebody has
paid a very dear price for the temporary en-
couragement that some of our enemies had.

We have approximately 5,900 planes and have
lost 38 completely destroyed. We lost 100-odd
that were damaged and have to be repaired.
^Maybe Secretary McNamara will fly in 150
shortly. Is that a great enemy victory?

In Peking today they say that we are in
panic. You have to judge that for yourself. In
other Communist capitals today they say that
we have definitely exhibited a lack of power and
that we do not have any military strength. You
will have to judge that for yourself.

But General Westmoreland evaluating this
for us and the Joint Chiefs of Staff reviewing it
for him tell me that in their judgment their
action has not been a militaiy success.

I am measiiring my words. I don't want to
overstate anything. We do not believe that we
should help them m making it a psychological
success either.

We are presenting these reports daily to the
Armed Services Committee, where the Secre-
tary of Defense is testifying and will be
through a large part of next week.

There will be moments of encouragement and
discouragement. As developments occur, we
can't estimate them, but they will be given to
the committees who have jurisdiction.

Since the Armed Services Committees help
draft our people and raise the armies and pro-
vide the equipment, the Secretary is appearing
there morning and afternoon. He will be giving
periodic reports that will be much more in de-
tail and will supplement what I have said to
you.

Q. Mr. President, do you still support talks
between the South Vietnamese and the NLF?

The President: I have not changed the view-
point that I expressed when I quoted the state-
ment of President Tliieu of South Viet-Nam in
my interview with the correspondents.^

° For an interview with President Johnson broad-
cast on Dec. 19, 1967, see Hid., Jan. 8, 1968, p. 33.

FEBRUARY 19, 1968

225

Q. Mr. President, in your judgment, did the
interview Premier Kosygin gave to Life mag-
azine reflect any deterioration in our relations
with the Soviet Union since the Glasshoro
meeting?

The President: I do not care to speculate on
the developments with the Soviet Union. We
just tabled last week a nonproliferation agree-
ment with them." We have other plans for ex-
changes of thoughts on various subjects.

We would always like to improve our rela-
tions with the Soviet Union and with all the na-
tions wliere we can do that consistently.

Situation in South Korea

Q. Mr. President, the Puehlo incident appears
to have put a certain strain on 7'elations between
Washington and Seoul. Some political figures
in South Korea are saying tJiat tlie United
States appears more interested in getting bach
the S3 men than doing something about North
Korean incursions into South Korea.

The President: I do not know the political fig-
ures you refer to. I camiot comment on that.

We are in very close touch with the President
of that country. I think he understands how we
feel.

I would be less than frank if I did not tell you
I was deeply concerned about 83 Americans, as
I am sure the President in Korea is.

I am also deeply concerned about the situa-
tion in South Korea and the obligation we have
there. We are going to be equal to that obliga-
tion. We are going to be true to our commit-
ment.

Wo have some 50,000 men there. We are going
to see that not only are they adequately in-
formed and supplied but that all of our plans
take into consideration the recommendations
of that government that we have found to be
not only a friendly government but an effective
one — and one of our best allies.

I have great respect for the President of
South Korea and his judgments. They are be-
ing received, considered, and acted upon every
day.

I see nothing in any of these developments to

justify a concern on the part of South Korea or
America that there is a strain in our relations.
I think that is largely talk and speculation and
so-called reports.

Panmunjom Talks

Q. Mr. President?

The President: Yes, sir.

Q. Are we now trying to arrange talks with
North Korea at Panmunjom, or has there been
a meeting since yesterday tliere?

The President: Yes, there has been a meet-
ing between representatives of North Korea and
the United States. We hope there will be addi-
tional meetings.

These meetings have not produced any satis-
factory results as far as the United States is
concerned.

I know of nothing that I should add to that
statement. I don't plan to.

The press: Thank you, Mr. President.

President Reaffirms U.S. Policy
on Bombing of North Viet-Nam

Following is an excerpt from remarks made
by President Johnson upon presenting the
Medal of Honor to Maj. Merlyn H. Dethlefsen,
USAF, in tlie East Room of the White House
on February 1.

White House press release dated February 1

He answered a call that was far beyond duty,
as others of his comrades are answering for you
at this hour. I stood before some of them at mid-
night at an airbase in Thailand just a few weeks
ago.^ I wanted so much that night to give med-
als to all of them. Instead, I gave them some-
thing just as meaningful — I gave them this
nation's pride in their unequaled bravery and
their unexcelled record.

These are the men who have rewritten the
rule book and the flight book of aerial warfare.

* For text, see ibia., Feb. 5, 1968, p. 165.

" Bulletin of Jan. 15, 1968, p. 73.

226

DEPABTMENT OF STATE BULLETIN

These men are comparatively few in number,
but each day they are pinning down from
500,000 to 700,000 Nortli Vietnamese, and they
nmuber only a few hmidred.

These same men are matching courage with
a careful and with a very precise restraint.

We are using our greatest resources — of in-
dustry, of technology, of skilled and courageous
men — to conduct a limited war at the lowest
possible cost in human life.

Let those who would stop the bombing answer
this question: What would the North Viet-
namese be doing if we stopped the bombing and
let them alone ?

Tlie answer, I think, is clear. The enemy force
in the South would be larger. It would be better
equipped. The war would be harder. The losses
would be greater. The difficulties would be
greater. And of one thing you can be sure: It
would cost many more American lives.

The men who have met and who have
matched the enemy on the ground these past
few hours — in I Corps, in the II Corps, in the
III Corps, in Saigon, the cities along the entire
countryside — have a very special understanding
and a very special appreciation, I assure you,
of what airpower really means. It cannot keep
the enemy from ultimately moving into battle
position. It caimot keep the sniper from climb-
ing a roof. But it can and it does reduce their
momentum. It can keep many of the enemy's

men off the backs of our men who are defending
our lives.

Until we have some better signs than what
these last few days have provided — that I hope
any i\jnerican can see and read loud and clear — -
that he will not step up his terrorism and unless
we have some sign that he will not accelerate
his aggi-ession if we halt bombing, then we
shall continue to give our American men the
protection America ought to give them: and
that is the best America can afford.

Major, as we honor j'ou here in the East
Room today, we think of so many who share
your burden and who share our pride :

— The men on the ships like the Pueblo, who
are not with us but who perform the most
perilous missions for their country's sake.

— The men who gave their lives to protect
our Saigon Embassy yesterday and to protect
that staff from terrorism during a supposedly
truce period.

— The men who will throw back the enemy in
the hills of Khe Sanh.

They are the bravest and they are the best
of the men that we can produce. And none, sir,
will do better sei-vice to their courage or do
better service to our cause, our cause of liberty,
our cause of freedom, our cause of compassion
and understanding — none will do better service
to that cause than you, sir.

FEBRfAET 19, 1968

227

'Share in Freedom"

Address hy Secretary Rusk ^

You're very kind to let me be here with you
for a few minutes this morning, and I shall try
to be brief.

I want to make one or two very simple points :

First, to thank you for what you're doing in
buying and selling U.S. savings bonds, these
shares in freedom.

Secondly, to say quite simply that buying
these bonds is an investment in your country
and that your country's worth investing in.

Thanks to people in this room and people
like you all over the country, the American
economy is a miracle in human history. Our
gross national product is equal to that of all of
the other members of OECD [Organization for
Economic Cooperation and Development] com-
bined; that is, Western Europe, Canada, and
Japan combined. It is twice that of the Soviet
Union, and the gap continues to widen. It is
approximately 10 times the gross national prod-
uct of all of Latin America. It is 10 times that
of mainland China, out of which they have to
take care of more than 700 million people in one
fashion or another.

When we sneeze the rest of the world catches
the flu.

And therefore when we have to make some
relatively minor adjustments we have to take
into account the impact on the rest of the world.
So when we talk about adjusting our balance
of payments by some $3 billion, we are talking
about it in the context of over $110 billion of
foreign assets held by this country, and we're
talking about it in the context of an $800 billion
gi-oss national product.

When we call upon different sectors to take
some share of tliat problem, we think we're en-

' Made at Washmi?ton. D.C, on Jan. 10 before a Sav-
ings Bond Volunteer Conference sponsored by the
Treasury Department.

titled to say that we should try to solve that
problem without starting a descending spiral
of trade and without endangering our security
interests all over the world.

Now, out of this fantastic economy we have
drawn some important responsibilities in this
postwar period. It is again without parallel in
history that a nation has turned its hand toward
building a decent world through the contribu-
tion of so many resources and talents.

It's true we've spent something over $100 bil-
lion in various forms of foreign aid over the last
20 years. To put that in context, recall that
we've spent something over $900 billion in de-
fense budgets alone. And an investment in es-
tablishing peace through peaceful processes
which is a small fraction of our defense budget
is a good investment in our own national
interest.

We've tried to build up the nations of the
world, heal the wounds of war, and give those
who are being pressed by the hounds of human
misery and human need a chance to do some-
thing about lifting the condition of man in many
parts of the world. All that we have done is an
indication that this coimtry realizes that what
happens in the rest of the world is vital in our
own interest — and that we camiot simply exist
as a massive economy, devouring the resources
of the rest of the world, without helping other
nations to increase those resources through their
own efforts.

Also, this nation has been committed to build-
ing some peace in the world. It isn't very com-
plicated. You can find the reasons for it in
article 1 of the United Nations Charter. There
were sketched out the essential elements in build-
ing a dm-able peace. That article was written at
a time when we and other governments were
thinking long and hard about how you could
accomplish that purpose. We had just gone
through the trauma of World War II, in which

228

DEPARTMENT OF STATE BULLETIN

tens of millions of lives •were sacrificed. We felt
it necessary to sit down and try to decide how
■we, as the charter puts it, could "save succeed-
ing generations from the scourge of war." So
that article talks about the necessity for sup-
pressing aggression and breaches of the peace
and for settling disputes by peaceful means, for
supporting the basic human rights, and for co-
operation— cooperating across national fron-
tiers— in the great hmnanitarian interests of all
mankind.

The story in this regard since 1945 is a moving
story. We've had at times to call upon our peo-
ple for sacrifices. And on occasion we've had to
call upon them for the supreme sacrifice in
battle.

But try and imagine a map of the world if it
were redrawn as it would have been had we and
others not been interested and concerned in what
happened in Iran and Turkey and Greece and
Berlin and Korea and the Philippines and Ma-
laya and the Congo and in Southeast Asia, or
how the map would look if the missiles had suc-
cessfully been established in Cuba.

During these past 20 years, it has been neces-
sary on occasion for the United States to demon-
strate firmness — firmness because we felt that it
was, would be, catastrophic to allow imchecked
appetite to gather momentum and for the world
to repeat the sad, sad story which preceded
World War II, in which each aggression fed the
next and the combination led us into catas-
trophe.

Now, it is easy to be relaxed and think that
what happens today is what counts and what
happens tomorrow can be postponed and for-
gotten, not fi-etted about. It's easy to say that
some place is too far away or that "perhaps
these fellows don't really mean what they say"
or that "if he has another bite, perhaps he'll be
satisfied" or that "in any event, it is not our
business."

But we surely can know, from what is said
and what is done, that there is a basic contest
now going on in the world between those who
would organize the world community as
sketched out in the United Nations Charter —
a world of consent — and those who would re-
organize that world community on the basis of
what they call their world revolution — a world
of coercion — and that that struggle has not yet
been fully resolved.

And so we've had to be firm on more than
one occasion for the purpose of stabilizing a

peace and making it possible for others to pre-
dict with reasonable certainty what we are
going to do, come tomorrow.

But it has also been necessary to act during
this 20 j-ears with restraint, for the very simple
reason there's too much power in the world
to act without restraint. There's power in the
world which passes the comprehension of the
mind of man. There is power in the world which
raises as an operational issue the survival of
man. And so we did not go to war against Bul-
garia and Yugoslavia when the guerrillas were
descending upon Greece; we tried to deal with
it in another way. We did not send nonexistent
armored divisions into Berlin during the block-
ade, but rather used an airlift to find a little
time to find a peaceful settlement of that prob-
lem. We did not open up the Pandora's box of
nuclear war during the Korean war, even
though we were taking significant and painful
casualties. President Kennedy went to special
pains to make it possible for the missiles to leave
Cuba by peaceful means. We waited 5 years
before we bombed North Viet-Nam.

Now, it is not easy to use firmness and re-
straint at the same time. But if we know what
the lessons of World War II are, as we read
article 1 of the United Nations Chai-ter, we must
also bear in mind that we shall not draw the
lessons from world war III; there won't be
enough left.

And therefore we had better do what is nec-
essary as rationally, as calmly, and in as clear-
headed a fashion as possible, if this nation and
the rest of the human race are to survive.

We can be deeply encouraged in some respects
by the fact that it is generally recognized that
a full nuclear exchange is simply an act of mad-
ness and not an instrument of policy; and that
the moving of mass divisions across frontiers is
generally regarded as too reckless an instru-
ment of policy to play with in the modem
world. We can be encouraged by the steady
growth of what someone has called "the com-
mon law of mankind," representing, in our case,
more than 4,200 treaties and agreements, which
help us to move with confidence because we can
predict what the other fellow is going to do on
questions which encompass the entire range of
human activity.

There are elements of deep encouragement.

It is a tragedy, after all that has happened
since, say, 1939, that once again it should be
necessary for us to send our young men out to

FEBRUART 19. 1968

229

risk their lives and give their lives to prevent
an aggression into smaller countries in another
part of the world.

Our problem is that the consequences of not
doing that are almost beyond comprehension.
Because, if it should be supposed that the mu-
tual security treaties of the United States are
meaningless, then there are those on the other
side who could make a miscalculation and a
misjudgment about this nation that could de-
stroy them and destroy us as well.

So the integi-ity of the United States under
its mutual security agreements is the principal
pillar of peace in the world under present
circumstances.

We came out of World War II with fantastic
power; we tried to lay down some of that power
in the Baruch proposals,- under which there
would have been no nuclear power in the world.
Unhappily, those proposals were rejected and
it has been necessary for us to build our power
dramatically since 1945 — power so formidable
that the results of its use camiot be adequately
described.

Lord Acton once said that power tends to cor-
rupt and absolute power tends to corrupt abso-
lutely. If there are visitors from other countries
here today, I hope they will forgive me a little
word of presumption. I do not believe that this
unbelievable power, whether in the military
field or in the economic field, has corrupted the
American people. Wlien you look at their pur-
poses— when you look at the conduct of this
nation since 1945 — you can understand that the
notion of the family of man is important to us ;
that the notion of "live and let live" is impor-
tant to us ; that the purposes of this nation are
those that you find in your own communities.
Eather simple ! Rather decent I

That is why it is possible for the President
to say in San Antonio that we will stop the
bombing of North Viet-Nam when it will lead
promptly to productive talks and that we as-
sume that the other side will not take military
advantage of that cessation of bombing while
the talks go forward.' I think it will be hard to
find in the history of armed struggle a more rea-
sonable and fair suggestion made by one side
in the course of the struggle.

I know you would like to have me comment
on the statement made by the North Vietnamese

"For background, see Bulletin of June 23. 1946,
p. 10.57.

' For background, see Hid., Oct. 23, 1067, p. 519.

Foreign Minister the other day, but I think
you might prefer that I not do so, if you think
about the problem. We need to explore its mean-
ing, and we are doing so. We're trying to find
out how his statement and the President's San
Antonio formula fit together, and whether the
attitude of the two sides is somehow moving
toward the possibilities of peace.

I have no doubt tliat if there is a genuine de-
sire to move toward peace by those who are on
tlie other side in Southeast Asia, the United
States will meet them more than half way.

But I also have no doubt that the security
of these independent nations of Southeast Asia,
to which we are committed by a treaty, is a
very important thing to us, and that we shall
have to insist that these nations be allowed to
live in peace without molestation by force from
the outside.

So when you buy a bond or you sell a bond,
you are engaged in an investment in a great
country. America at its best is very good indeed ;
and in general, in a strange and curious sort
of way, the American people have a way of in-
sisting that their public atfairs and their public
policy reflect America at its best.

Now, that means that there are some burdens
to be borne. We have to maintain our military
strength; otherwise there may be those who
would misjudge and miscalculate. I get no com-
fort out of the fact that the defense budget of
the United States this year is roughly equal to
the gross national product of all of Latin Amer-
ica. We should like very much to get peace in
Southeast Asia and turn our hands seriously and
drastically to the possibilities of a reduction in
arms, not only among the great powers but in
some of the lesser neighborhood arms races in
different jDarts of the world.

There's no question that we should like to do
that. But the burden has to be bome until we
know where we are.

We camiot allow space to become the monop-
oly of those who might wish to destroy freedom.
We must hold out a helping hand through aid
programs and our share in such international
banks as the World Bank and IDA [Interna-
tional Development Association] and the Inter-
American Development Bank and the Asian
Development Bank in order that governments —
many of them new govenunents — can find some
mmimum resources through which they can
launch their own peoples on to the path of
modernization.

230

nEPAETMENT OF STATE BULLETIN

All these we have to do, partly because it is
in our essential national self-interest that we do
so — because we could not maintain this fantastic
prosperity, our own internal institutions, if the
rest of the world were in misery and chaos — but
also because America, at its best is concerned
about what happens to other human bein<;s.

i\jid there are many things, as the family of
man faces the sometimes hostile physical uni-
verse, in which we have common interests with
other men and women simply because we are
a part of homo sapiens. And we're constantly
trv'ing to find those elements of common in-
terest which cut across ideological, national, and
cultural frontiers.

So we have a full agenda ahead of us, stimu-
lating, exciting, which we should approach with
confidence. And we should assume these burdens,
which we are thoroughly capable of bearing in
our stride, with good heart. And if you're called
upon to help in maintaining the stability and the
prosperity of this fantastic economy by selling
and buying bonds, this is one of the minimum
contributions we as citizens can make to a great
human enterprise in which we are called upon
to play such a large role. Thank you veiy much
for what you're doing.

President Establishes Commission
for Human Rights Year

STATEMENT BY PRESIDENT JOHNSON

White House press release dated January 30

It is seldom that any one man's life embodies
both national leadership and a universal cause.
It is rarer still when his spirit survives his death
and endures as an inspiration for man's deepest
hopes.

Such a man was bom 86 years ago this day.
P President Franklin Delano Roosevelt stands
in life and death as a towering advocate of those
timeless ideals that promise individual fulfill-
ment to men and peace to the family of nations.
His country pursues those ideals more than two
decades after his death : social justice here at
home and a community of mutually respecting
nations throughout the world.

Today we take another and determined step
toward those ideals. "We mark the anniversary
of President Franklin Roosevelt's birth m the

most fitting and hopeful way — by building on
his work.

I have today signed an Executive order estab-
lishing a Presidential Commission for the
Observance of Human Rights Year.

The General Assembly of the United Nations
has designated 1968 as International Year for
Human Rights. It is the 20th anniversary year
of the Universal Declaration of Human Rights.
United Nations members are called upon for
appropriate national observances throughout
this year.

Three months ago, in declaring 1968 Human
Rights Year for the United States, I called
upon "All Americans and upon all government
agencies — federal, state and local — to use this
occasion to deepen our commitment to the de-
fense of human riglits and to strengthen our ef-
forts for their full and effective realization both
among our own people and among all the peo-
ples of the United Nations." ^ The Commission
I have appointed is composed of distinguished
citizens and heads of executive agencies. They
are charged with shaping the variety of our
efforts into a major and purposeful national
contribution.

The United States was founded on great and
lasting principles of liberty and rights for the
individual. Our Constitution and our laws pre-
serve these rights. Our Government is devoted
to enlarging them for all Americans.

But rights not perceived cannot be prized;
rights not understood are rights not exercised
and soon weakened or destroyed. We have a
great need and responsibility to educate our
people in a fuller understanding of their rights.

We can lead by our example. Peace is the
spur. If nations are not to rely forever on a
fragile balance of fears, they must find con-
fidence in making justice the guiding principle
of their national and international affairs.

Wo seek justice as a safeguard against tyr-
anny and catastrophe. Secretary of State George
Marshall remmded us 20 yeare ago : ^

Governments which systematically disregard the
rights of their own people are not lilsely to respect the
rights of other nations and other people and are likely
to seek their objectives by coercion and force. . . .

Thus warned in 1948, America pledged her

' For text of Proclamation No. 3814, see Bulletin
of Nov. 13, 1967, p. 660.

" For an address made by Secretary Marshall before
the U.N. General Assembly at Paris on Sept. 23, 1948,
see ibid., Oct. 3, 1W8, p. 432.

FEBRUARY 19, 1968

281

strength and hope with other signatories to the
Universal Declaration of Human Eights. This
great compact gave new power and coherence to
man's often shapeless and sometimes hopeless
yearning for equality and freedom.

We reaffirm our allegiance to that Declara-
tion today and call upon all our citizens and
institutions to advance its purposes to the extent
of their abilities.

The Senate has signified that it will enlarge
its own important role. It supported our partic-
ipation in international agreements that further
the protection of human rights by consenting to
the Supplementary Convention on Slavery on
November 2, 1967. In my proclamation desig-
nating Human Rights Year, I declared that
ratification of the Human Rights Conventions
was long overdue. It is my earnest hope that
the Senate will complete the tasks before it
by ratifying the remaining Human Eights
Conventions.

America's domestic initiatives and successes
in assuring our people the guarantees of our
Constitution should be better understood by the
international community.

The Commission I appoint today :

— can enlarge our people's understanding of
the principles of human rights as expressed in
the Universal Declaration and the Constitution
and in the laws of the United States;

— can provide a focus for governmental par-
ticipation in Human Rights Year, enlisting the
cooperation of organizations and individuals;

— and may conduct studies, issue publica-
tions, and undertake such other activities as it
finds appropriate.

I have appointed the following distinguished
citizens to serve on the Commission :

W. Averell Harriman, Ambassador at Large

Anna Roosevelt Halsted of Washington, D.C.

A. Philip Randolph of New York

Tom Clark of Texas, former Associate Justice, U.S.
Supreme Court

George Meany of Maryland, president of the AFL-CIO

Elinor L. Gordon of New York, president of the Citi-
zens' Committee for Children

Robert Meyner, former Governor of New Jersey

Dr. J. Willis Hurst of Atlanta, Georgia

Bruno Bitker of Wisconsin. Chairman of the Human
Rights Panel at the White House Conference on
International Cooperation in 1965

I have asked Averell Harriman to serve as
Chairman of the Commission. Anna Roosevelt

Halsted has graciously agreed to act as Vice
Chairman.

I have also today asked the following heads
of executive agencies to serve on the Commis-
sion : the Secretary of State ; the Attorney Gen-
eral ; the Secretary of Labor ; the Secretary of
Health, Education, and Welfare; the Secretary
of Housing and Urban Development ; the Staff
Director of the U.S. Commission on Civil
Rights; and the Chainnan of the Equal Em-
ployment Opportunity Commission.

I have selected these men and women with
care and confidence, because I expect them to
perform an outstanding service for every Amer-
ican and for all who prize the rights that we
possess and seek to make secure for others.

The Commission wiU have my strongest i^er-
sonal support.

EXECUTIVE ORDER 11394»

Establishing the I>eesident's Commission fob the
Observance op Human Rights Yeab 1968

Whebeas the United Nations General Assembly has
designated the year 1968 as International Human
Rights Year to commemorate tie 20th Anniversary of
the adoption of the Universal Declaration of Human
Rights; and

Whereas the United States has sought in its national
and international policies to promote the principles of
the Universal Declaration of Human Rights in accord-
ance with its heritage of civil and political liberties
and in recognition of the human rights of all without
distinction of race, color, creed, sex, or national origin ;
and

Whereas, by Proclamation No. 3814 of October 11,
1967, I have designated 1968 as Human Rights Year;

Now, THEREFORE, by virtue of the authority vested in
me as President of the United States, it is ordered as
follows :

Section 1. Establishment of Commission, (a) There
Is hereby established the President's Commission for
the Observance of Human Rights Year 1968 (herein-
after referred to as the "Commission").

(b) The Commission shall be composed of the
Secretary of State, the Attorney General, the Secretary
of Labor, the Secretary of Health, Education, and Wel-
fare, the Secretary of Housing and Urban Development,
the Staff Director for the Commission on Civil Rights
(42 U.S.C. 1975d(a)), the Chairman of the Equal
Employment Opportunity Commission, and ten other
members to be appointed by the President from public
or ijrivate life. The President shall designate the chair-
man and the vice chairman of the Commission from
among its members.

3 33 Fed. Reg. 2429.

DEPARTMENT OF STATE BULLETIN

(c) Members of the Commission wlio are otherwise
employed by the United States shall receive no addi-
tional compensation by reason of their service to the
Commission. Members who are not so employed shall
serve without compensation, but shall be entitled to
receive travel expenses, including per diem in lieu of
subsistence, as authorizetl by law (5 U.S.C. 5703) for
persons so serving.

Sec. 2. Functions of the Cot)imission. (a) The Cora-
mission shall promote the efifective obser\'ance in the
United States of 1068 as the 20th Anniversary of the
United Xations Universal Declaration of Human
Rights. To this end the Commission shall seek to create
a better understanding of the principles of human
rights as expressed in the Universal Declaration, the
United States Declaration of Independence, the Consti-
tution and laws of the United States, and the Constitu-
tions and laws of the several States of the United
States.

(b) The Commission shall provide a focus for the
interest of official bodies, Federal, State, and local,
which share its purpose. It shall also enlist the co-
operation of educational institutions, foundations,
mass media, civic, labor, and other organizations which
plan to participate in the observance of International
Human Kights Year.

(c) The Commission may conduct such other activ-
ities as it may deem appropriate to provide for the
efifective participation of the United States in the
celebration of International Human Rights Year. Such
activities may include, but need not be limited to, (i)
conducting studies, (ii) issuing reports and other pub-
lications, and (iii) holding meetings, both public and
private, at such times as the Chairman shall determine.

(d) The Commission shall report from time to time
to the President on the progress made in the observ-
ance of International Human Rights Year in the
United States. The final report of the Commission
shall be made to the President on or before the date
which occurs one year after the date of this order and
the Commission shall be deemed to be terminated on
the date which so occurs.

Sec. 3. Assistance and cooperation, (a) As may be
necessary, each Federal agency, an officer of which Is
a member of the Commis.sion, may furnish assistance
to the Commission in accordance with the provisions of
section 214 of the Act of May 3, 1945 (59 Stat. 134; 31
U.S.C. 691), or as otherwise permitted by law. The
Department of State is hereby designated as the agency
which shall provide the Commission with necessary
administrative services and facilities.

(b) The Commission is authorized to request any
agency of the executive branch of the Government to
furnish the Commission such information and advice
as may be useful to it for the fulfillment of its functions
under this order. Each such agency is authorized, to
the extent permitted by law and within the limits of
available funds, to furnish such information and advice
to the Commission upon request of the Chairman or
Executive Director of the Commission.

(c) Upon request of the Chairman or Executive Di-
rector of the Commission each agency of the executive
branch of the Government shall otherwise cooperate
with the Commission in carrying out the provisions of
this order and shall provide the Commission with such
additional assistance and service as it may be able to
provide.

(d) The Commission shall invite the cooperation of
the United States National Commission for UNESCO
with a view to coordinating its activities with those of
the United States National Commission for UNESCO.

Sec. 4. Commission staff. The Commission shall have
an executive director who shall receive such compen-
sation as may hereafter be specified, and it is author-
ized to obtain services in accordance with the pro-
visions of 5 U.S.C. 3109.

The White House,
January SO, 1968.

FEBRUAET 19, 19 68

233

The Central Themes of U.S. Policy Toward Europe

iy George G. McGhee

Ambassador to the Federal RejmMic of Germany

I am delighted to meet with you today and
to talk to you about Germany and Europe.

I have just come from Bonn and am glad to
report that our relations with Germany are
excellent. A contributing factor was the very
successful meeting between Chancellor Kie-
singer of Germany and President Johnson last
August.^ The mutual confidence which has
characterized our relations with German gov-
ernments throughout the jjostwar period was
reinforced. Minor issues which troubled us a
year ago receded into the background.

It is, moreover, very important for the
United States that we do have good relations
with Germany. Apart from our cultural and
historical ties — roughly one American in eight
is of German origin — relations between our
two countries constitute one of the strongest
sinews of the free world. Germany is the third
largest industrial country in the world, the
second after us as a world trading nation. Ger-
many is our fourth customer, and we are Ger-
many's first supplier and third customer. The
combined imports and exports between us ag-
gregate some $4 billion a year.

Moreover, it is the 460,000 members of the
Gei-man armed forces committed to NATO
who, alongside our own forces in Germany, pro-
vide the great bulk of the military strength
which protects the eastern frontiers of the free
world in Europe. Our troops are not in Ger-
many just to protect Germans. Any major
ground attack against free Europe from the
Communist world would have to come through
Germany. We consider the security of our
country to be inextricably bound to that of

^Address made before the Foreign Policy Associa-
tion at New Torli, N.Y., on Jan. 4.

•For background, see Bulletin of Sept. 11, 1967,
p. 325.

Europe. We could not tolerate Western Europe
being in the hands of a hostile power. We are
fortunate that a resolute country like Germany
lies on the eastern approaches to free Europe
and is willing to make such an important con-
tribution to European, and therefore to Ameri-
can, defense.

Although we like Germans, and Germans
and Americans visit each other on a large scale,
our real ties with Germany derive from a
fundamental community of interests. I will
mention just a few.

Germany and we believe in collective security.
We share the concept of an integrated defense
of the Atlantic world through NATO.

Germany and America have very much the
same concept of the future organization of Eu-
rope and of the necessity for close cooperation
between America and Europe. The Germans
believe in a Europe with a greater degree of
political unity — enlarged to include the United
Kingdom and other eligible countries who wish
to join the Common Market. At the same time,
the Germans want Europe to remain a partner
with the United States within the larger At-
lantic context.

The Germans are also at the forefront of
those, including ourselves, who seek to improve
relations with the East. They have taken the
important step of establishing diplomatic rela-
tions with Romania and are presently nego-
tiating with Yugoslavia. The Germans, as are
we, are convinced that only through a genuine
relaxation of tensions between East and West
can the great problem of the division of Ger-
many and Europe be solved.

Germany also shares our views with respect
to relations with the underdeveloped coimtries
of the world. Germany is the only country,
apart from ourselves, which has a worldwide

234

DEPARTMENT OP STATE BULLETIN

program of development assistance. In terms
of the German national income, their contribu-
tion is comparable to our own.

Germany is a great trading nation and also
shares our desire to liberalize the conditions of
world trade. Since some 16 percent of Ger-
many's national product is attributable to for-
eign trade, she has an even gi-eater incentive
than we have to bring down trade barriers. No
country, including our own, was more enthu-
siastic over the success of the Kennedy Round
than were the Germans.

In summary, Germany is important to us,
as we are to Germany.

Moreover, Germany is important not just as
Germany but as part of a larger developing
Europe. Her trade policies, and increasingly
her financial policies, have been merged with
the other five members of the Common ilarket,
of which the German economy is roughly one-
third. The Six, together with the United King-
dom, comprise approximately the same popu-
lation as the United States. Their combined
industrial base could some day equal our own.
Tlie combined resources, experience, and influ-
ence of sucli a Europe make it the one area of
greatest importance to us. I assure you that our
Government is fully aware of this importance —
and that our policies reflect it.

There are some, however, who have doubts of
this. One hears in recent months about the sup-
posed decline of American interest in Europe.
It is said that the United States no longer has a
European policy ; that we are preoccupied with
Asia — or witli our domestic problems — to the
detriment of Europe's interests.

I believe that I can demonstrate that this is
not the case.

NATO a Symbol of U.S. Commitment to Europe

I recently attended the annual winter minis-
terial meeting in Brussels of the NATO Coun-
cil.' NATO is the symbol of the American com-
mitment to Europe; and this meeting, which
was one of the most successful, clearly demon-
strated NATO's vigor both as a military or-
ganization and as a forum for seeking lasting
peace. America played a key role in this meet-
ing. We did not neglect our interest in Europe
and in things European because of Viet-Nam.

Indeed, Americans have been active in all of
the recent endeavors to strengthen NATO. We
were in the forefront in helping overcome the

jiroblems created by the decision of France to
withdraw its forces fi'om NATO. We played an
important role in getting agreement in Brussels
on new force goals. We contributed importantly
to the studies initiated by Belgian Foreign Min-
ister [Pierre] Ilarmel, which set forth a new
work program for NATO in the field of politi-
cal consultation. The 14 NATO allies were able
to agree this year on a new NATO strategy —
the first sinc« 1956 — providing for a flexible re-
sponse to the whole spectrum of possible mili-
tary threats. Our military leaders are not con-
cerned exclusively with our strategy iti South
Viet-Nam.

Moreover, the United States backs up the
NATO strategy — and demonstrates its abiding
interest in Europe's security — by maintaining a
large and powerfully equipped military force
on the Continent. Earlier this year, as a result
of an American initiative headed by former
U.S. High Commissioner to Germany John J.
McCloy, a trilateral agreement was reached sta-
bilizing force levels and resource contributions
among the British, the Germans, and ourselves.*

A quarter of a million Americans stand guard
every day in Europe. They are armed with 7,000
nuclear weapons. It is symbolic that an Ameri-
can, General Lyman Lemnitzer, one of our
outstanding military leaders, is the Sui^rerae
Conmiander of NATO. We have no plans to
alter our forces in Europe except through
the limited rede^jloyment plan jjreviously an-
nounced and now approved by NATO. We can
maintain our forces in Europe and at the same
time meet our force goals in Viet-Nam.

The American security commitment to Eu-
rope through NATO is as firm and reliable
today as when it was first made in 1949. 1 would
like to repeat that this is not a commitment to
maintain just the security of Europe but also
that of our own country.

It is obvious that the events of the shooting
war in which we are engaged in South Viet-
Nam will loom large in the headlines of our
press and in the preoccupations of our people.
Naturally our high officials must give much of
their attention to Viet-Nam. The fact is, how-
ever, that they give equal attention to Europe.

There is a constant stream of European lead-

' For text of a communique issued at Brussels on Dec.
14. 1967, see ibid., Jan. 8, 1968, p. 49.

' For a U.S. statement on May 2, 1967, see ibid.. May
22, 1967, p. 788.

FEBRUARY 19, 1968

235

ers througli the halls of our Government. There
is a similar stream of distinguished American
visitors to Europe. Much of the business of our
National Security Council concerns Europe's
problems, including the reunification of Ger-
many. Over a given time, a great proportion
of the speeches of our high officials deals with
the problems of Europe.

We have traditionally sent senior diplomatic
representatives to Europe. The State Depart-
ment representation in Germany is the largest
regular mission in the world. Our officials are
constantly at work furthering U.S. relations
with Europe — examining policies and carrying
out agreed programs.

We recently inaugurated with Germany,
starting with the visit of Interior Secretary
[Stewart L.] Udall, intensive collaboration in
the field of environmental problems and re-
sources. This has brought scores of Americans
to Germany — and Germans to America — to
study such problems as air and water pollution,
traffic, and housing. We have not confined our
cooperation in development to the underdevel-
oped countries.

Efforts To Relax East-West Tensions

The relaxation of tensions with Eastern Eu-
rope and the Soviet Union is a matter of strong
and continuing interest to the United States,
just as it is to our European allies. We have a
vital interest in the future development of re-
lationships between our allies in Western Eu-
rope and the states of the Communist East. This
is just as true when the trend appears to be
toward reconciliation and peaceful settlement
of existing political issues as it has been in the
past under different circumstances.

Secretary Eusk has asserted many times that
the United States intends to play — indeed, will
insist upon playing— its full role in the process
which we believe will lead eventually to the
organization of a stable and peaceful Europe.
At the recent NATO meeting in Brussels, to
which I alluded earlier, he reminded his col-
leagues that in the long confrontation between
the Soviet Union and the United States the
central issue between these superpowers was
and is Europe.

We all know that many obstructions lie in
the road to a better understanding between East
and West. To travel that road we need much
patience and a constant regard for the preser-

vation of common Western interests. Neverthe-
less, we must all make the effort if we are to
achieve a lasting peace with justice in Europe.
We stand behind Germany and our other Eu-
ropean allies in their endeavors toward this
end, and I believe we have demonstrated that
we can cooperate successfully with our Euro-
pean allies on this and other objectives which
lie in our common interest.

Economic Ties Between U.S. and Europe

In tlie recent highly successful Kennedy
Round negotiations under the GATT [General
Agreement on Tariffs and Trade], wliich re-
sulted from an American initiative, Europe and
the United States worked together to liberalize
and intensify the trading relations between the
nations of the world. The one most important
result was to strengthen the economic ties be-
tween the United States and Europe — to the
benefit of both. Certainly, no one who followed
closely the protracted and difficult negotiations
of the Kennedy Roimd could have supposed
that the United States was distracted by
Viet-Nam.

In the field of international monetaiy reform,
developments of the last year made clear how
closely the United States is tied to Europe. The
agreement reached in Rio de Janeiro in Septem-
ber of last year ° to bring up to date the world's
monetary system — again on American initia-
tive— found strong support in Germany and
elsewhere in Europe. Europe, as well as Amer-
ica, will benefit from increases in the means of
payment. Neither could have accomplished this
goal alone.

U.S. Interest in European Self-Reliance

There is perhaps one reason why people who
have not thought deeply about the problem may
conclude that America is not now so interested
in Europe as before. This is because we do not,
it is clear, provide today the type of leadership
in European matters that we did in the imme-
diate postwar period.

With the cities of Europe in ruins and politi-
cal and social structures in disarray, it was nec-
essai*y at that time that we take the lead. This
we did in the ci-eation of the OEEC [Organi-
zation for European Economic Cooperation],

' For background, see iUd., Sept. 25, 1967, p. 392.

236

DEPARTMENT OF STATE BTTLLETIN

in currency reform in Germany, and tlirougli
the foundation of NATO itself. We all recog-
nized, however, that this was a temporary sit-
uation whicli was certain to pass. Euroi^eans
have traditionally been quite capable of Iian-
dling their own affairs. With European recov-
ery we have progressively, and I hope grace-
fully, receded from a position of leadership in
internal European affairs.

Europeans have, moreover, been quick to
assume their own responsibilities. They have
increasing!}' made it clear to us that they expect
to stand on their own feet. Their increasing in-
dependence does not represent a failure but a
success in American policy. During his visit to
Wasliington last August, Chancellor Kiesinger
told the National Press Club that Germany
would not be running to America asking it to
solve all of Germany's problems.

If we do not now speak up forcefidly on mat-
ters concerning the Common JVIarket, or other
pui'ely intra-European affairs, it is not because
of lack of interest or ideas but because we do
not consider it appropriate. These are matters
for Europeans themselves to decide. We have
every confidence that what they decide will be
consonant with the broader relationship of part-
nership with us, which is what we desire.

We are, moreover, willing to go even further.
As Secretary Rusk recently said, the United
States would welcome the development of a
European caucus in NATO, something like a
European defense community, as a full partner
in a reconstituted alliance."

In Europe's interest, and in our own, we shall
continue to bear large burdens in the defense

of that continent for as long as necessary. And
in Europe's interest, and in our own, we shall
be happy to turn over these burdens to a united
Europe when it is capable of shouldering them
alone.

A central theme of United States policy to-
ward Europe today is to assist and accelerate
Europe's movement toward greater self-reli-
ance. Some, who are perhaps wedded too closely
to the ideas and forms of the Atlantic relation-
ship 10 or 15 years ago, mistake this for an
indication of fading United States interest in
Europe.

This, however, is a serious misreading of
United States policy. We are as firmly commit-
ted to those fundamental judgments made in
the early postwar years as we were when the
North Atlantic Treaty was signed in 1949. I
refer to the judgment that the security and
well-being of the peoples of the Atlantic na-
tions are iiiextricably bound together and that
the freedom of Western Europe is a vital Amer-
ican interest.

I have no concern about the i>resent state of
relations between Europe and our country. It is
a relationship which has undergone changes m
recent years, but this does not mean it is of a
less binding nature. I have no fear for the fu-
ture as long as the peoples of the opposite sides
of the Atlantic world continue to have mutual
confidence, mutual commitment, and respect for
each other's integrity.

' For an address by Secretary Rusk made at New

York, N.Y., on Dec. 2,

p. 855.

1967, see ibid., Dec. 25, 1067,

FEBRUARY 19, 19G8
2S9-219— GS 3

237

Facts and Ideas on Industrialization

Statement by Walter M. Kotschnig ^

The International Symposium on Industrial
Development is a significant event born of the
aspirations and the persistence of the develop-
ing countries.

As one of the most highly industrialized
countries in the world, the United States under-
stands these aspirations. It admires the persist-
ence of the new leaders of Asia, Africa, and
Latin America as they struggle for moderniza-
tion, for economic and social progress, for a
better life for their [people. Let there be no mis-
take about this: We do understand and we do
want to help, as we have shown in the past and
will demonstrate in the future, hopefully on an
enlarged scale, whatever the vicissitudes of
today and the morrow may be.

To open on our part the great dialog in which
this symposium is to engage, I propose to state
a few basic issues and face them squarely.

First, there is the problem of the gap, the gap
between the rich and the poor, the gap that is
steadily widening, as we are told. This is a mat-
ter of deep concern to us, as it is to all of you.
I submit, however, that it must not become an
obsession, a besetting fear paralyzing our
thought and action and destroying any hope
for fruitful cooperation between coimtries of
different levels of development and living. No
one has the final answer as to how this gap can
be closed or bridged. Indeed, differences in cli-
matei and resources may well make for intrac-
table differences in terms of levels of production
which will persist into the dim future. History,
of course, also abounds with examples of the
rise and decline of rich and powerful nations,
which cloud our crystal ball as we look to the
future. Thus, Mr. President, an excessive pre-

•Made before the International Symposium on In-
dustrial Development at Athens, Greece, on Dec. 1.
Mr. Kotschnig, who is Deputy Assistant Secretary for
International Organization Affairs, was chairman of
the U.S. delegation to the symposium.

occupation in this symposium with the elimina-
tion of the existing gap might easily become a
futile and divisive exercise.

Second, what we do need is a concentration
on development — the dynamics of development.
By definition, development is a dynamic process,
and it is the elucidation of this process which
calls for our best and most persistent efforts.
We have to find which approaches and attitudes
and conditions are best designed to set in mo-
tion and accelerate economic and social prog-
ress in the developing countries and to help
them to achieve the stage of self-sustaining
growth which they are seeking.

In the absence of effective action, there has
of late been a strong tendency in the economic
and social bodies of the U.N. and other inter-
national organizations to find escape and a spu-
rious sense of satisfaction in the formulation of
ever-new sets of "principles" and a seemmgly
endless flood of repetitive resolutions which
grow longer every year by the simple device of
quotmg in the preamble all previous resolu-
tions. Frankly, the value of these labors appears
to us to be very limited.

Basic principles do not change from year to
year. Principles which truly deserve that name
emerged 2,000 years ago and more in this very
city of Athens, they were proclauned at Runny-
mede, they are embodied in the teachings of the
great religions in East and West and were re-
fined tliroughout the ages by the gi'eat leaders
of thought of East and West, North and South.
They are at the very basis of civilized living
and help define the relations of man and society.

As to resolutions, most of them are hortatory,
usually telling the other side what they ought
to do and hence frequently irritating and
divisive.

As we see it, there are better ways to achieve
forward movement and to release dynamic
forces making for development. In our own ex-

238

DEPARTMENT OF STATE BULLETIN

perience, a more pragmatic, flexible approach
on the part of individuals and groups which in-
volves continuous change, adaptation, and ad-
justment has proved most productive. That ap-
proach is at the basis of industrial growth of
my country. Our industries, more than any other
sector of our national life, have been developed
as a means of satisfying human needs, with
maximimi attention given to solving problems
and minimum enthusiasm for the ideological
and theoretical framework in which the solution
might be placed. In this connection, I was much
interested to find the other day that M. Jean-
Jacques Servan-Schreiber in his book "The
American Challenge" sees great strength in this
American ability to strip problems of the ideo-
logical overlay.

I do not suggest for a minute that everybody
should behave like Americans. We place variety
above uniformity. However, we detect strong
indications of a similar approach in the eco-
nomic miracle of Japan and in the surprisingly
high rate of growth of GNP — 10 to 12 percent
annually in recent years — in the Republic of
China and their skyroclceting export figures.
And there are other examples in parts of Latin
America and elsewhere.

Third, lest there be any misunderstanding, as
Americans we do believe in planning; we do
believe in it in terms of looking ahead, of recog-
nizing and defining interrelationships, and of
establishing priorities which permit rational
and informed choices. Computers are purring
all over America these days. Our corporations
and industrial complexes have on their drawing
boards new models, blueprints for new machin-
ery, plans for expansion and for marketing
which will see the light of day only 2, 5, or 10
years from now. Some of them may never
emerge if due to unforeseeable circumstances
they are deemed unable to meet pragmatic tests.
While we have little in the way of an overall
national plan of development, far-reaching
plans are in existence regarding water manage-
ment, the development of our road system, the
renewal of cities, et cetera.

We are therefore among the first, to accept the
need for planning and the establisliment of
priorities in the developing countries, both in
the private and the public sector. These plans
are bound to differ suljstantially from country
to country since no one pattern will fit all of
them. The same elements may of course appear
in all these plans, such as a recognition of the
importance of family planning related to plans

for increasing food production in order to es-
tablish some balance between the two. Wliat we
do have to guard against in all our planning is
the risk of such plans becoming straitjackets
and being abused as means to stifle individual
initiative and drive.

Needs of the Developing Countries

Let me now pass from these general observa-
tions to a few specific problems to which we
have to find concrete answers if industrializa-
tion is to be more than a wishful dream and if
the LTnited Nations Industrial Development
Organization is to become an effective instru-
ment at the service of the developing countries.

Among the most important issues reflected
in the reports of the regional symposia are the
following :

The need for increased capital resources, both
external and internal ;

The need for increased technical assistance,
skills and training, and competent manage-
ment, which is closely associated with the need
for additional capital, to which I would add the
need for greatly extended and improved edu-
cational facilities and procedures;

The need for additional outlets for industrial
exports ;

The opportimities in this connection for the
creation of larger markets through regional
cooperation ;

The vital necessity, hand in hand with in-
dustrialization in the narrow sense of the word,
of modernizing agriculture, which in itself is an
aspect of industrialization in the broader sense
and essential to all industrial progress.

Bilateral and Multilateral Assistance

Due to the limitations of time I shall confine
myself to a brief discussion of only a few of
these points and leave the discussion of others
to a later stage in our proceedings.

The problem of finance looms large. There is
a growing, although perhaps not yet adequate,
recognition on the part of the developing coun-
tries of the need for a concerted effort on their
part and in every country to mobilize domestic
savings and put these to optimum use for de-
velopment purposes. We on our side recognize
that few of the developing countries can at this
time accumulate adequate capital. Conse-
quently, if the developing countries are to

FERBUART 19, 19G8

239

mount more adequate investment programs,
they must take steps to obtain a portion of their
capital and know-how from the resources of the
developed countries.

Among the major sources of such aid are the
bilateral governmental assistance programs
mounted by the developed countries and multi-
lateral aid channeled through the U.N. system
of organizations and, above all, the big financial
institutions such as the International Bank for
Eeconstruction and Development and the In-
ternational Development Association. To main-
tain and increase the financial assistance thus
offered will require continuing major efforts on
the part of the developed world. In this con-
nection my Government welcomes the proposal
made by President [George D.] Woods of the
IBRD in his address of October 27 to the Swed-
ish Bankers Association, in which he urged the
establislmient by the developed countries of an
international group of top-level experts to
study new approaches to foreign aid, assess the
results of past assistance, pinpoint errors made,
and propose policies which will work better in
the future. In that same speech Mr. Woods elab-
orated in terms of facts and figures the sub-
stantial magnitude of the assistance effort which
will be required and which is in keeping with
the absorptive capacity of the developing
countries.

Needless to say, the United States would want
to participate in such an effort. At the same
time I have to sound, in all honesty, a note of
warning. We have every intention to continue
and, hopefully, enlarge our aid programs,
through which we have made available in re-
cent years scores of billions of dollars. I hope
you realize, however, that we are ourselves
passing at this stage through a difficult period.
Our financial resources are strained, due to the
burdens imposed upon us by our international
obligations and commitments aimed at the estab-
lishment of a world in peace. They are strained
also by the fact that the revolution of rising
expectations did not stop at the doors of the
United States. There is still mucli poverty in
our own country. There are underdeveloped re-
gions which ciy for assistance; there are the
pressing needs for the renewal of our vast
urban centers. These strains are reflected in our
balance-of-payments difficulties as well as in
our growing national debt. Under these condi-
tions any substantial increases in the foreign
assistance programs of our Government are not
likely to prove possible in the immediate future.

Private Investment Resources

Wliatever the future, it is clear that govern-
mental aid, both bilateral and multilateral,
wliile essential, does not and is not likely to
provide enough capital to support adequate de-
velopment programs throughout the developing
world. If the gap between the requirements of
development and the resources needed for this
task is to be closed, foreign private investment
in the developing countries will have to in-
crease. The potential of such investment is
enormous, since the resources available from
private sources in most of the developed coun-
tries far exceed those available to their govern-
ments for foreign assistance.

There may be quite a few in this hall who
are allergic to foreign or even domestic private
investment. A whole mythology has grown up
around the idea of private investment: that it
equates with exploitation, that it serves to make
the rich richer instead of raising the standard
of living in the recipient countries, that it es-
tablishes economic and political dependence on
foreign powers.

Mr. President, everyone has the right to his
own opinions, and I have no intention of be-
coming a commis voyageur en ideologies, a sales-
man for a special brand of economic philosophy.
We do not want to force on any developing
country private American investments. Whether
or not to accept such investment is the problem
of these countries, developed or developing.
It is not our problem. However, I want to state
just a few cold facts to set the record straight:

1. Private investment can be and is being
made available to both the private and the pub-
lic sector in the developing countries. We rec-
ognize that a proper mix of both sectors may
help to advance development at an accelerated
rate and that the public sector in the early
stages of development may be essential.

2. United States manufacturing investment
in the developing countries has been rising
steadily and by the end of 1966 was well over
$4 billion. This represents 20 percent of total
United States private direct investment in
manufacturing in all foreign countries. This
sustained increase in United States investment
is taking place despite the fact that the rate of
return on manufacturing investment in the de-
veloping countries has been somewhat lower
than the return realized on comparable invest-
ments in Western Europe and in the United
States itself.

240

DEPARTMENT OF STATE BULLETIN'

3. The actual outflow of earnings from the
developing countries is much lower because a
high proportion of earnings on United States
direct investment is plowed back into the local
economy.

i. Due to our balance-of -payments difficulties
we have found it necessary to discourage private
investment in developed countries and to impose
restrictions on such investment. No such restric-
tions have been placed on investment in the de-
veloping countries, which we continue to en-
courage. Our system of investment guarantees is
also designed to benefit primarily the develop-
ing countries. We have talien these steps in
order to make it easier for the poor countries
to secure investment capital, of which they are
in dire need.

Management Skills and Technology

5. Private investment, furthermore, is mak-
ing a major contribution to the development of
experienced management, the lack of which is
one of the most serious impediments to indus-
trialization. Skills of foreign management are
transmitted to local talent, and frequently man-
agement is taken over by them altogether. In
this way private investment often becomes an
even more important source of management
training and skills than the United Nations
technical assistance activities, highly significant
as they are. At best, the U.N. program cannot
alone meet the needs of the developing countries
in the management field.

G. Another important ingredient furnished
by both private foreign investment and the U.N.
programs of teclmical assistance is advanced
technology. Mj Government has recently made
an intensive investigation of the "technological
gap"' and the extent to which it is affected by
the international flow of capital. This study
provided conclusive proof that international
direct investment is a primary conveyor of tech-
nology and of human expertise.

The transfer of technology thus achieved
should enable the developing countries to skip
several stages of the industrial revolution as the
world has known it. With the help of modern
teclinology, we hope that they will be able to
achieve mass production at low cost, without
exploitation of labor and any encroachment
upon the basic rights of their people. In this
connection I should like to point out that tech-
nological advances gave rise to great fear in our
own country that such advance would lead to

widespread unemployment and create a greater
gap between the haves and the have-nots in our
own society. As you all know, these fears have
proved groundless : Employment has risen and
the standard of living and leisure time of our
people has increased to an extraordinary extent.

7. Finally, it is clear that the transfer of
private capital, mixed with teclmology and
human skills rapidly enriches the economic life
of the host country. It pays taxes and it creates
new jobs both directly and indirectly, and on
all levels of skills. It often creates important
new export earnings due to the marketing ex-
perience and facilities of the foreign investor.
This effect is dramatically illustrated by tlie im-
pact of United States investment ou Europe's
exports. It is estimated that in 1965 American
capital investment accoimted for well over $4
billion of European exports. This was nearly 9
percent of Europe's total exports of manufac-
tured goods. Although on a smaller scale, there
is ample evidence of similar achievements in
developing countries such as Pern, Liberia,
India, Thailand, the Republic of China, and
many others.

I am sure that all those who recognize as
valid the facts which I have stated and who are
looking for assistance through private invest-
ment will also recognize the need for creating
a climate which will encourage such investment.
I will not belabor this point, which has been
discussed extensively in tlie U.N. General As-
sembly, the Economic and Social Council, and
elsewhere. Suffice it to say: Investors do not
seek special privilege and advantage; all they
are seeking is fair and equitable treatment, gov-
erned by freely entered upon bilateral and mul-
tilateral agreements and muler international
law.

Our interest in the ultimate success of the
symposium, which is mdeed a jiioneering ven-
ture, is reflected in the fact that we have come
here from far-off America with a delegation of
26 members. It includes governmental experts
and 12 outstanding representatives of Ameri-
can industry and labor and institutions of
higher learning. No less than 53 American ex-
perts in industrialization, in planning, manage-
ment, and operations have signed up to partici-
pate in the Industrial Promotion Service.
Among them are representatives of the Inter-
national Executive Service Corps, which repre-
sents a typical American initiative to assist de-
veloping countries by providing seasoned busi-
ness executives on short-term assignments

FEBRUART 19. 19GS

241

abroad to provide assistance on management
and technical problems. They are all volimteers
and serve without salary. This large participa-
tion is a clear indication of our desire to help
the developing countries in their struggle for
industrial development, wliich is essential to
free their countries from the blight of poverty
and stagnation.

One last word to our friends from the de-

veloping countries here assembled: We have
come here not to seek a confrontation, to ac-
centuate and aggravate differences in views and
approach. We have come to seek a free exchange
of ideas and experience and to reach a common
understanding of ends and means. '\^1iat is
more, I trust that we shall achieve a true part-
nership in our common struggle for peace and
prosperity for all.

1968 — A Year of Opportunity and Responsibility

hy William M. Roth

Special Representative for Trade Negotiations ^

In planning this conference, you have called
1968 a year of opportunity for businessmen —
and rightly so, because it is a year of oppor-
tunity. But since this theme was chosen, 1968
has become something else as well: a year of
great responsibility for American business.

In order to safeguard the strength of the
American dollar, the Government has had to
take hard and painful decisions. We have had
to impose mandatoiy controls on American in-
vestment abroad as part of a balanced program
to stem the outflow of dollars. We have had to
ask our banks to cut down further on overseas
lending. And we have had to consider measures
to narrow the dollar gap from tourism.

Nobody likes to see measures like these in ef-
fect, even temporarily. Everyone, your Govern-
ment most of all, wants to dispense with them
as soon as possible.

By far the best means of speeding their aboli-
tion is to increase our exports. That's why this
is a year of opporturaty and responsibility for
American business.

Some people have seen in the balance-of-
payments crisis a different kind of opportunity :

' Address made at the International Center of New
England, Inc., at Boston, Mass., on Jan. 17.

an opportunity to press harder for protection-
ism. As you know, import quota bills for some
18 industries were introduced in the last session
of Congress. They included traditionally pro-
tectionist industries like textiles and shoes, but
they also included major new industries like
steel and consumer electronic products. Now
we are hearing a new argument for the enact-
ment of these bills. They are being advocated
as a remedy for our balance-of-payments
problem.

This is a quack medicine the protectionists are
peddling, medicine more likely to kill than to
cure.

First, we cannot expect to impose quotas on
our imports from other countries without their
imposing quotas on our exports to them. This is
a game any number can play. And it's a game
that an export-surplus country like ours is
bound to lose. For, as overall world trade
shrinks, our own export surplus would shrink
with it.

Second, quotas would mean higher costs for
American farmers and manufacturers — costs
which would put them at a disadvantage in the
world market.

Third, quotas — and the higher prices that re-
sult from them — would feed the fires of infla-

242

I

DEPARTMENT OF STATE BULLETIN

tion. And the containment of inflation is vital
to our domestic well-being and to our competi-
tiveness abroad.

That is why the President is giving the en-
actment of an anti-inflation tax the highest
priority while practicing the strictest economy
in government expenditures. Tliat is why he is
seeking the cooperation of business and labor
leaders in making our voluntarj- program of
wage and price restraint more effective.

Some protectionists question the equity of
the balance-of-payments program. Should not
trade bear a part of the burden, they ask?
Should not imports be limited by quotas if in-
vestments abroad are to be restricted ?

The answer to the first question is "Yes."
Trade must be expanded, to help meet our
balance-of-payments problem. The answer to
the second question is an emphatic "No," for
the imposition of quotas would reduce trade
rather than increase it.

To indulge in this kind of protectionism
would amount to a retreat from our real respon-
sibility: the expansion of our exports and the
maintenance of the dollar's strength abroad.

President Jolmson has described exports as
"the cornerstone of our balance-of-payments
position." ^

They are indeed the cornerstone — but a cor-
nerstone that needs strengthening. The United
States is the world's largest exporter — in abso-
lute terms but not in proportion to our GNP.
Our exports have been running at the rate of 4
percent of our GNP. Last year our gross export
surplus was up half a billion dollars, to $4.3
billion. But that is still only a little more than
half a percent of our GNP.

Surely we can do better than that — and this
is the year to begin.

This is the year that the first installments of
the Kennedy Round tariff cuts go into effect,
here and abroad. As you know, these tariff cuts
when completed will average 35 percent on in-
dustrial products — and they will go up to 50
percent on a very wide range of items.

Moreover, many of the higher than average
tariff cuts will be in fields where we are already
successful exporters and where our prospects for
further growth are bright. These include electri-

' For a statement by President Johnson released on
Jan. 1, see Bulletin of Jan. 22, 1968, p. 110.

cal and nonelectrical machinery, transportation
equipment, scientific instruments, paper prod-
ucts, and office equipment, to name some of the
outstanding examples.

The Kennedy Round tariff cuts will be staged
over 5 years. Most of our principal trading part-
ners will make their first cuts — a double install-
ment of 40 percent of the total cut — on July 1.
That is a good day to mark on your business
calendar.

Periodic cuts will be made thereafter, with
the final one on Januaiy 1, 1972. That insures
an expansionary atmosphere for trade not only
this year but for years ahead.

A further stimulus to our exports is within
our grasp. It could come through the abolition
of the American Selling Price system, an obso-
lete form of protectionism for benzenoid chemi-
cals and a few other products. This would bring
into effect the so-called ASP package negotiated
at Geneva as a supplement to the Kennedy
Round agreement.

If Congress repeals ASP — and this is a vital
part of the trade legislation the administration
will be puttmg before Congress tliis year —
there will be deep additional tariff reductions
on our chemical exports. The total Kemiedy
Round tariff cuts will then be almost 50 percent
on nearly a billion dollars' worth of our chemi-
cal exports. This should enable our chemical in-
dustry to increase its export surplus — already
$1.8 billion — still further. Therefore, I consider
the repeal of ASP a significant part of our over-
all balance-of-payments program.

As you know, the President has proposed ad-
ditional measures to expand our exports, some
of wliich will require congressional action. They
include :

— A 5-year, $200 million Commerce De-
partment program to promote the sale of
American goods abroad.

— A $500 million Export-Import Bank au-
thorization to provide better export insurance,
to expand guai-antees for export financing, and
to broaden the scope of Government financing
for our exports.

— The initiation of a Joint Export Associa-
tion program to provide direct financial support
to American corporations joining together to
sell abroad.

An essential part of the President's trade

FEBRUARY 19. 1968

243

program is a, renewed and intensified effort to
reduce or eliminate nontariff barriers to trade.
While wo have already made significant prog-
ress in this field, both before and during the
Kennedy Bound, there is still much to do.

"We are concerned that American commerce
may be at a disadvantage because of the across-
the-board tax rebates which some countries give
on exports and the border taxes they impose on
the goods we ship to them. We are currently en-
gaged in urgent discussions on this subject with-
in Government and with our friends abroad.

These and other nontariff barriers are a major
area of concentration in the study of future
American trade policy which the President has
asked me to conduct — and which also includes
the currently controversial topic of East- West
trade. We very much want businessmen to share
their ideas and experiences with us, both in the
public hearings begimimg March 25 and in
private consultations. The closest possible co-
operation between business and Government is,
we have foimd, absolutely essential to the effec-
tive conduct of trade negotiations.

AYe have nm into some heavy weather in in-
ternational economic affairs lately. But that
need not discourage or depress us. As the his-
torian Edward Gibbon has written : "The winds
and the waves are always on the side of the
ablest navigators."

As inheritors of a great trading tradition, I
hope that the businessmen of New England
will seize the opportunity to do their part, and
more than their part, in meeting and surpassing
the goal the President has set for this year: a
$500 million increase in our export surplus.

Mr. Rubin To Represent U.S.
on U.N. Trade Law Commission

The Department of State annoimced on
January 31 (press release 22) the designation
of Seymour J. Rubin as United States Repre-
sentative on the United Nations Commission
on International Trade Law (UNCITRAL)
for a period of 3 years. (For biographic details,
see press release 22.)

The Commission, established by the United
Nations General Assembly in 1966, is charged
with promotuig the progressive harmonization
and unification of the law of international
trade. The General Assembly decided that the
Conmiission should achieve this objective by
promoting wider participation in existing in-
ternational conventions and wider acceptance
of existing model and uniform laws. Other
functions to be performed by the Commission
include coordinating the work of organizations
already active in unification of private law
activities and encouraging, in collaboration
with such organizations, tlie codification and
wider acceptance of international trade law,
l^rovisions, customs, and practices. The Com-
mission is also expected to collect and dis-
seminate information on legal developments in
the field of international trade.

The United States was among the 29 states
elected members of the Commission in October
1967. The first regidar session of the Conmiis-
sion, being held at the headquarters of the
United Nations in New York, will continue
through February 23, 1968.

244

DEPARTMENT OF STATE BULLETIN

THE CONGRESS

The Budget of the United States Government — Fiscal Year 1969 (Excerpts)'

PART 1— THE BUDGET MESSAGE OF THE
PRESIDENT

To the Congress of the United States:

The budget I send you today reflects a series
of difficult choices. They are choices we cannot
avoid. How we make the choices will affect our
future as a strong, responsible, and compassion-
ate people.

We now possess the strongest military capa-
bility that any nation has ever had. Domestic-
ally, we have enjoyed an imparalleled period
of economic advance. Nevertheless, we are con-
fronted by a number of problems which demand
our energies and determination.

Abroad we face the challenge of an obstinate
foe, who is testing our resolve and the worth of
our commitment. While we maintain our un-
remitting search for a just and reasonable peace,
we must also continue a determined defense
against aggression. This budget provides the
funds needed for that defense, and for the main-
tenance and improvement of our total defense
forces. The costs of that defense — even after a
thorough review and screening — remain very
large.

At home we face equally stubborn foes — pov-
erty, slums and substandard housing, urban
blight, polluted air and water, excessively liigh
infant mortality, rising crime rates, and in-
ferior education for too many of our citizens. In
recent years, we have come to recognize that
these are conquerable ills. We have used our in-
genuity to develop means to attack them, and

'H. Doc. 225, Part 1, 90th Cong., 2d sess. ; trans-
mitted on Jan. 29. Reprinted here are the introductory
paragraphs and conclusion from part 1 and the sections
on International affairs and finance from parts 1 and
4 of the 556-page volume entitled The Budget of the
United States Oovernment — Fiscal Year 1969, for sale
by the Superintendent of Documents, U.S. Government
PrinUng Office, Washington, D.C. 20402 ($1.75).

have devoted increasing resources to that effort.
We would be derelict in our responsibilities as
a great nation if we shrank from pressing for-
ward toward solutions to these problems.

But faced with a costly war abroad and ur-
gent requirements at home, we have had to set
priorities. And "priority" is but another word
for "choice." We cannot do everything we would
wish to do. And so we must choose carefully
among the many competmg demands on our
resources.

After carefully weighing priorities, I am pro-
posing three kinds of actions :

• First, I have carefully examined the broad
range of defense and civilian needs, and am
proposing the selective expansion of existing
programs or the inauguration of new programs
only as necessary to meet those urgent require-
ments whose fulfillment we cannot delay.

• Second, I am proposing delays and defer-
ments in existing programs, wherever this can
be done without sacrificing vital national
objectives.

• Third, I am proposing basic changes, re-
forms, or reductions designed to lower the
budgetary cost of a number of Federal pro-
grams which, in their present form, no longer
effectively meet the needs of today.

Federal programs bring important benefits
to all segments of the Nation. This is why they
were proposed and enacted in the first place.
Setting priorities among them, proposing re-
ductions in some places and fundamental re-
forms in others, is a difficult and a painful task.
But it is also a duty. I ask the Congress and the
American people to help me carry out that duty.

Even after a rigorous screening of priorities,
however, the cost of meeting our most pressing
defense and civilian requirements cannot be re-
sponsibly financed without a temporary tax in-
crease. I requested such an increase a year ago.

FEBRUARY 19, 1968

245

On tlie basis of changed fiscal conditions, I re-
vised my request in a special message to the Con-
gress last August.^ I am renewing that request
now.

There is no question that as a nation we are
strong enough, we are intelligent enough, we are
productive enough to carry out our responsibili-
ties and take advantage of our opportunities.
Our ability to act as a great nation is not at
issue. It is our will that is being tested.

Are we willing to tax our incomes an addi-
tional pemiy on the dollar to finance the cost of
Vietnam responsibly? Are we willing to take
the necessary steps to preserve a stable economy
at home and the soundness of the dollar abroad ?

One way or the other we will be taxed. We can
choose to accept the arbitrary and capricious tax
levied by inflation, and high interest rates, and
the likelihood of a deteriorating balance of pay-
ments, and the threat of an economic bust at the
end of the boom.

Or, we can choose the path of responsibility.
We can adopt a reasoned and moderate ap-
proach to our fiscal needs. We can apportion the
fiscal burden equitably and i-ationally through
the tax measures I am proposing.

The question, in short, is whether we can
match our will and determination to our
responsibilities and our capacity.

Program Highlights

International affairs and finance. —

Through its international progi-ams, the United
States seeks to promote a peaceful world com-
munity in which all nations can devote their
energies toward improving the lives of their
citizens. We share with all governments, par-
ticularly those of the developed nations, respon-
sibility for making progress toward these goals.
The task is long, hard, and often frustrating.
But we must not shrink from the work of peace.
We must continue because we are a Nation
founded on the ideals of humanitarian justice
and liberty for all men. We must continue be-
cause we do not wish our children to inherit a
world in which two-thirds of the people are

' H. Doc. 152, 90th Cong., 1st sess. ; for excerpts, see
BuixETiN of Aug. 28, 1967, p. 2C6.

underfed, diseased, and poorly educated.

The $2.5 billion in new obligational authority
requested for 1969 for the economic assistance
program is essential to the success of our efforts.
Most of our assistance is provided in concert
with other industrialized nations, some of whom
devote a larger proportion of their economic
resources to this purpose than we do.

Our assistance, even when combined with the
gi-owing contribution of other industrial na-
tions, cannot itself guarantee the economic
growth of developing nations. But it can pro-
vide the crucial margin of difference between
success and failure for those countries which
are undertaking the arduous task of economic
development. Since outside aid cannot substi-
tute for effective self-help, we will continue to
direct our economic assistance to those countries
willing to help themselves.

The 1969 economic assistance program will
continue the trend toward increasing concen-
tration on improved agriculture, education,
health, and family planning. The economic aid
program I am proposing will :

• Accelerate growth in Latin America by
modernizing agriculture and expanding edu-
cation, and help lay the foundations for a Com-
mon Market, as agreed at Punta del Este last
April.

• Support India's recovery from recession
and drought, and assist Pakistan's drive toward
self-sufficiency in food.

• Promote progress in the villages of South-
east Asia by helping them build schools, roads
and farms.

More than 90% of our AID expenditures in
1969 will be for purchases made in the United
States, and I have directed intensified efforts to
increase this percentage.

Upon completion of negotiations now in prog-
ress, I shall recommend legislation to authorize
a U.S. contribution to a multilateral replenish-
ment of the resources of the International De-
velopment Association, which is managed by
the World Bank. I shall also request an increase
in our subscription to the callable capital of the
Inter- American Development Bank (IDB) ;
this action will enlarge the borrowing and lend-
ing capacity of this vital Alliance for Progress
institution without requiring expenditure of
U.S. Government funds. These resources, to-
gether with our proposed contributions to the

246

DEPARTMENT OF STATE BULLETIN

IDE's Fund for Special Operations and the
Asian Development Bank, will permit us to
provide effective support for sound develop-
ment projects while we sliare the financial bur-
den with other donors. Our contributions will
include adequate balance of payments safe-
guards.

To assure sufficient food supplies for the de-
veloping countries, I am proposing extension of
the Food for Freedom jjrogram beyond its ex-
piration date of December 31, 1968.

The Export-Import Bank will continue to
assist the growth of U.S. exports, so essential
to our balance of pajTiients. I will propose legis-
lation to establish a new Export Expansion
Program to guarantee, insure, and make direct
loans for U.S. exports which do not qualify for
Bank financing under existing criteria.

Conclusion

This is a critical and challenging time in our
history. It requires sacrifices and hard choices
along with the enjoyment of the highest stand-
ard of living in the world. No nation has re-
mained great by shedding its resolve or shirking
its responsibilities. We have the capacity to
meet those responsibilities. The question before
us is whether or not our will and determination
match that capacity.

In the past 4 years, this Nation has faced
formidable challenges. We have confronted
them with imagination, courage, and resolution.
By acting boldly, we have forced a number of
age-old concerns— ignorance, poverty, and dis-
ease— to yield stubborn ground.

The rollcall of accomplishments is long. But
so is our agenda of unfinished business. Our
heritage impels us to steadfast action on those
problems of mankind which both gnaw at our
conscience and challenge our imagination.

As your President, I have done all in my
power to devise a program to meet our responsi-
bilities compassionately and sensibly. The pro-
gram is embodied in this budget for 1969. 1 urge
active support for its principles and programs.

LxNDoN B. Johnson

January 29, 1968.

PART 4 — THE FEDERAL PROGRAM BY FUNCTION

International Affairs and Finance

The fundamental objective of our interna-
tional programs is a peaceful world community
in which all peoples can progress toward fuller,
more satisfying lives. Patience, determination,
and understanding are required as we pursue
this objective through our diplomatic, financial,
and cultural relations with other nations.

Our foreign assistance efforts this year again
affirm our commitment to cooperate with other
advanced nations in supporting economic and
social progress for the less fortunate two-thirds
of mankind. The tasks of economic develop-
ment cannot be completed quickly or without
sacrifice. Our assistance can only be a catalyst
and supplement to the self-help actions which
the developing nations themselves must under-
take. In 1969, more than 90% of our develop-
ment lending will be undertaken in concert with
other developed nations or within a regional or
multilateral framework.

Total outlays for international affairs and
finance are expected to be $5.2 billion in 1969,
$107 million more than in 1968. Higher ex-
penditures for Food for Freedom shipments
and economic assistance will be largely offset by
substantial decreases in (1) expenditures of the
Foreign Claims Settlement Commission reflect-
ing final settlement of World War II claims in
1968 and (2) net lending by the Export-Import
Bank.

CREDIT PROGRAMS— INTERNATIONAL
AFFAIRS AND FINANCE '
[Fiscal years. In millions]

Program or agency

Economic and financial
programs:

Export-Import Bank:

Commitments

Disbursements

Repayment

Net lending

1967
actual

($2,661)
1, 167
627

540

1968
estimate

($2, 111)
1,645
929

716

1969

estimate

($2, 440)
1,680
1,005

675

1 Excluding credit programs In the expenditure account.

FEBRUART 10, 1968

247

INTERNATIONAL AFFAIRS AND FINANCE

[Fiscal years. In millions]

Program or agency

ExpenditureBT
Condoet of foreign afTalrs:

Department of State ',-- -

U.S. Arms Control and Disarmament

Agency -

Tarill Commission -

Foreign Claims Settlement Commis-
sion ■ ' -

Department of Justice (trust funds)

Treasury Department (trust funds)

Economic and financial programs:
Agency for International Development:

Development loans

Technical cooperation '

Alliance for Progress -

Supporting assistance

Contingencies and other

Applicable receipts from the
pubUc (-) '

Subtotal, Agency for International

Development ' '

Subtotal, eiduding special Vietnam..
International financial institutions:

Present programs.-

Proposed legislation

Export-Import Bank

Peace Corps ' '

Other'

Food for Freedom

Foreign Information and exchange ac-
ilTitles:
United States Information Agency ' '..

Department of State and other '

Applicable receipts trom the pubUc (— ) '..

Subtotal, expenditures

Subtotal, expendituTea, exciuditig spe-
cial Vietnam

Net Lending: Economic and financial
programs:
Export-Import Bank:

Present programs ._..

Proposed legislation

Subtotal, net lending..

Total

TolaJ, acluding special Vielnam-

Expendltures and
net lending

1967
actual

$321
10

662
224
811
587
334

2,268
(1,844)

170

-104

112

20

1,452

185

59

-417

4,110
(3, 687)

4,650
(4.227)

1968
esti-
mate

$337

200
4

5

626
203
465
602
313

-63

2,146
(1,687)

223

-144

108

21

1,316

187

68

-163

4,330

(3,872)

716

716

6,046
(4,688)

1969
esti-
mate

$365

670
216
616
621
310

2,264
(1,784)

200

10

-110

no

20
1,444

194

61

-144

4,478
(3,998)

660
16

676

6,163
(4,673)

Rec-

om-
mend-

ed
NOA

and
LA for
1969 1

$350

10
4

765
238
625
696
280

2,434
(1,854)

320
446

113

11

918

179

64

-144

4,700
(4,220)

6,308
(4,828)

' Compares vrtth new obUgatlonal authority (NOA) and lending
authority (LA) for 1967 and 1968, as follows:

NOA: 1967, $4,336 million; 1968, $4,402 million.
LA: 1967, $779 million; 1968, $866 million.
' Includes both Federal funds and trust funds.
• Relevant "Interfund and intragovemmental transactions" and
"AppUcable receipts from the pubUc" have been deducted to arrive at
totals.

Agency for International Development. —

The Agency for International Development ad-
ministers our economic assistance programs
through three principal instruments :

• Long-term, dollar repayable development
loans provide the capital assistance for projects
and imports necessary for economic growth.

• Technical assistance grants contribute to
the development of the human and institutional
resources required for effective long-term
development.

• Supporting assistance loans and grants are
provided in a limited number of comitries to
strengthen political stability and security in or-
der to maintain an environment in which eco-
nomic and social progress are possible.

AID loans to foreign countries are classified
in the budget as expenditures rather than net
lending, consistent with the recommendations
of the President's Commission on Budget
Concepts.

Total expenditures of the Agency for Inter-
national Development are estimated to rise by
$119 million in 1969. Efforts to minimize the
effect of these assistance programs on the U.S.
balance of payments have been successful and
will be intensified. More than 90% of AID ex-
penditures in 1969 will be for purchases of U.S.
goods and services. Special measures are being
taken to insure that exports financed with AID
support do not substitute for U.S. commercial
exports. Thus, AID helps to promote the long-
term growth of markets for U.S. exports
by stimulating new trade patterns and
opportimities.

The AID budget program is summarized in
the table below in terms of total obligational
authority. This includes primarily new obliga-
tional authority granted each year by the Con-
gress, plus the obligational authority becoming
available each year from loan repayments and
recoveries of prior year obligations.

East Asia (excluding Vietnam). — In 1969,.
some $277 million is plaimed for the East Asia
progi-am, about the same as in 1967, but $68
million higher than in 1968. Most of the increase
is for the U.S. share of a multilateral stabiliza-
tion and development program in Indonesia,
which is recovering from a long period eco-
nomic mismanagement. In Korea, further eco-
nomic progress permits us to continue shifting
our aid from supporting assistance to develop-

2iS

DEPARTMENT OF STATE BTJLLETH?

ment lending. Increased teclmical cooperation
funds ivill support new regional initiatives in
Southeast Asia, primarily to improve education
and agriculture.

Vietnam. — Economic and social progress in
Vietnam are absolutely essential to the stability
and security of Southeast Asia. In 1969 the
Commercial Import Program -will help control
inflation by providing foreign exchange to paj'
for imports needed to meet the requirements of
the Vietnamese economy. Assistance will be
given the rural citizens of that strife-torn coun-
try to build in safety their homes, farms and
schools. Total obligational authority in 1969
is esthnated at $480 million, an increase of $10
million above 1968.

A^ear East and South Asia. — The develop-
ment assistance program will increase from
$467 million in 1968 to $706 million in 1969. Most
of the increase is for our share of assistance
given through international consortia to India
and Pakistan. This aid will help speed India's
recovery from 2 years of recession by providing
over $200 million for the purchase of fertilizer
to help expand farm production and by sup-
porting India's import liberalization program
undertaken last year. The increase will also help

SUMMARY OF THE AID BUDGET PROGRAM

[Fiscal years. In millions]

Major assistance programs

East Asia (excluding \'ietnam) . .

Vietnam

Near East and South Asia

Africa

Latin America (Alliance for

Progress)

Contributions to international

organizations

Contingency fund (unallocated) _
General support

Total obligational au-
thority '..

Of which:

New obligational authority '..
Prior year and other funds

Total obligational authority
(Federal funds)

1967
actual

S276
495

2 893
203

585

144

140

1968
esti-
mate

2,735

2, 143
592

S209
470
467
140

538

135

44

138

2, 141

1,895
245

1969
esti-
mate

$277
480
706
179

708

154

50

152

2,706

2,500
206

maintain Pakistan's progress toward sustained
economic growth.

Africa. — In 1969, our assistance to Africa
will (1) concentrate lending and technical as-
sistance in those coimtries making significant
progress toward economic growth; (2) seek to
foster increased cooperation with other indus-
trial countries and multilateral organizations
such as the World Bank and the new African
Development Bank in providing high priority
assistance, especially in agriculture, health, and
education; and (3) encourage and support via-
ble regional programs in these areas. Total obli-
gational authority in 1969 will be $39 million
above the 1968 level.

Latin America. — In 1969, financial assistance
for the Alliance for Progress will be increased
by $170 million to carry out the decisions
reached by the American Presidents at Punta
del Este in April 1967. Included in the Declara-
tion of the Presidents were commitments to
increase agricultural productivity, promote
education, encotirage science and technology,
and provide support for economic integration.
We have pledged to assist the Latin American
nations in these efforts to advance the pace of
change in our hemisphere. Our aid is closely
related to the recipients' self-help actions and
to the programs of other donors through the
Inter- American Committee on the Alliance for
Progress (CIAP).

The term "foreign assistance" generally ap-
plies to both economic and military assistance,
as authorized by the Foreign Assistance Act.
The following table summarizes total expendi-
tures and new obligational authority for both
programs. Military assistance is discussed
under the heading of National Defense.

FOREIGN ASSISTANCE TOTALS
[Fiscal years. In mUlionsl

« Excludes trust funds not requiring congressional action.

' Includes .$320 million of 1966 fundS, which were available to support
1967 programs in India and Pakistan because aid to those countries was
suspended during the Kji.shniir crisis.

Expenditures
(Federal funds)

New obligational
authority

1967
actual

1968
esti-
mate

1969
esti-
mate

1967
actual

1968
esti-
mate

1969
recom-
mended

Economic assistance '. ..
Military assistance '

$2,315
873

$2,205
650

$2,330
625

$2,143
782

$1,896
400

$2,600
640

Total

3,188

2,755

2,855

2,925

2,295

3,040

• Excludes trust funds not requiring congressional action and deduction
of applicable receipts.

FEBRtJAKT 19, 1968

249

other economic and financial programs. —

Tlie United States promotes economic growth
abroad through various activities in addition to
loans and grants provided by AID. Prominent
among tliese are U.S. contributions to inter-
national financial institutions which provide
additional resources to support economic de-
velopment. These institutions are important
instruments for mobilizing capital and coordi-
nating economic assistance. A table summariz-
ing the new obligational authority required to
fulfill our contributions to these institutions for
1967-1969 follows:

INTERNATIONAL FINANCIAL INSTITUTIONS

[Fiscal years. In millions)

New obligational
authority

Institutions

1967
actual

1968
esti-
mate

1969
esti-
mate

Inter-American Development
Bank:
Fund for Special Operations-
Ordinary capital

$250

$300

$300
1 206

Asian Development Bank (ordi-
nary capital)

20

International Development

Association. .

104

104

' 240

Total ..

354

404

766

' Proposed for separate transmittal.

Through its Fimd for Special Operations, the
Inter- American Development Bank (IDE) pro-
vides long-term loans at low interest rates for
economic and social development projects in
Latin America. Increased emphasis will be given
to multinational transportation, communica-
tion, and power projects which promote greater
regional economic integration. The ordinary
capital of the IDB finances development proj-
ects for borrowers capable of meeting more
nearly commercial terms. Authorizing legisla-
tion will be sought for a $412 million increase
in the U.S. subscription to the Bank's callable
capital, with the first installment of $206 million
to be requested in 1969. The availability of call-
able capital makes it possible for the Bank to
raise funds in private markets without requir-
ing Federal expenditures.

The Asian Development Bank, financed by
subscriptions from 19 members from that region

and 13 nonregional members, provides loans and
technical assistance to the developing countries
of Asia. The $20 million subscription requested
for 1969 is the third of five installments. Legis-
lation is pending in Congress to authorize a
U.S. contribution to a multilateral special fund
for the Bank primarily for use in Southeast
Asia.

The International Development Association
(IDA) , an affiliate of the World Bank, provides
long-tenn loans to developing nations through-
out the world, repayable on easy terms. Its re-
sources will be exhausted during 1968. Upon
completion of negotiations between IDA and
donor nations, legislation will be sought to au-
thorize a new U.S. contribution. A 1969 appro-
priation is proposed for separate transmittal.

The Export-Import Bank supports the
growth of U.S. expoi-ts through its direct loan,
insurance and guarantee programs. Net lending
by the Bank is expected to decrease from $716
million in 1968 to $675 million in 1969, reflecting
higher repayments of principal on loans made
in prior years. Tliese increased repayments will
help reduce the U.S. balance of payments deficit.
By the end of 1969, the Bank's insurance and
guarantee programs will protect $2.7 billion of
U.S. exports against both commercial and po-
litical risks.

Transactions of the Bank which are classified
as expenditures include guarantee and insurance
costs, interest paid, and other expenses. In 1969,
receipts of the Bank, primarily from interest
received on loans, will exceed expenditures by
$110 million, $34 million less than in 1968. Legis-
lation is now before Congress to extend the life
of the Bank which is due to expire on June 30,
1968.

The Peace Corps will continue to provide
Americans with expanded oppoi'tunities for
significant service abroad. By August 31, 1969,
there will be over 15,000 volunteers in training
or overseas. During 1969 volunteers are expected
to be active in about 60 countries working along-
side the peoples of these nations in a variety of
projects:

• 41 % will participate in education programs,
with a growing number involved in teacher
training.

• 23% will be working to modernize agi'icul-
tural production and marketing.

• 14% will be engaged in improving health
conditions.

250

DEPARTMENT OF ST.\TE BULLETIN

Agency for International Development — Program Trends

$ Billionf

3.0-

2.5 —

S.0-,

1.5 -<■:■:■:■:■:•:':

•;■:■:■:■:■: Near East and
•'.■'.■y.-y. South Asia

<; >:•:■:■:■:■:■:':■:■'■' ■'''•'■'^'■'■'■'■'•^■^'^•■■■•-^ Latin America

"":::•■:•:::•:::•:•:• International Or3aniiationsK|:j:|:j:|:5:|:i:::::::::::::::::::::::

0 -'

1961 1962 1963 1964 1965 1966

Fiscal Years

1967 1968 1969

Estimate

Food for Freedom. — The principles em-
bodied in the 1966 camendments to tlie Agricul-
tural Trade Development and Assistance Act
(commonly called Public Law 480) will con-
tinue to be applied in 1969 :

• All sales agreements specify commitment
for self-help activities by recipient countries.

• An increasing proportion of food shipments
is being paid for in dollars or local currency con-
vertible to dollars. This proportion is expected
to increase from 17% in 1967 to more than 50%
in 1969.

• Food aid and dollar aid are being closely
linked in the development and negotiation of
agreements to assure most effective use of both
types of resources.

• The emphasis in donation programs is on
child feeding and food-for-work projects, which
are oriented to development purposes.

Although efforts to expand food production
in the developing countries have been substan-
tially increased, the full impact of these meas-
ures on output will take time to be felt. Larger
shipments of U.S. agricultural commodities are
needed to help fill the gap between supply and
demand in the short nin. Accordingly, Food for
Freedom expenditures will rise by an estimated
$129 million in 1969 to a total of $1.4 billion.
About two-thirds of these expenditures will be
under sales agreements; the rest will be for a
donation program, administered in part through
private voluntary agencies.

Legislation will be proposed to extend the
Food for Freedom program beyond its expira-
tion date of December 31, 1968.

Foreign information and exchange activi'
ties. — The 1969 budget provides for an increase

FEBRUARY 19, 1968

251

in U.S. Information Agency activities in Latin
America and Europe. Greater emphasis will be
placed on programs designed to reach audiences
outside the major cities, particularly youth
groups at universities. A major new radio fa-
cility in the Philippines will be completed dur-
ing the year, and work will continue on the new
facility in Greece scheduled for completion in
the spring of 1971. The recommended new obli-
gational authority for 1969 provides for three
exhibits in the Soviet Union as part of a new
cultural exchange agreement.

Expenditures in fiscal year 1969 for the educa-
tional and exchange activities of the Depart-
ment of State are estimated at $52 million. These
expenditures will support programs to exchange
leaders, professors, scholars, teachers, and stu-
dents with other countries of the world.

President Transmits AID Reports
for 1966 and 1967 to Congress

FoUoioing is the text of President JohmorCs
letter of January 22 transmitting to the Con-
gress the annual reports of the foreign assist-
ance program for fiscal years 1966 and 1967.^

To the Congress of the United States :

One of the clearest lessons of modern times is
the destructive power of man's oldest enemies.
Wliere hunger, disease and ignorance abound,
the conditions of violence breed.

For two decades, this lesson has helped to
shape a fundamental American purpose : to keep
conflict from starting by helping to remove its
causes and thus insure our own security in a
peaceful world.

Four Presidents and ten Congresses have af-
firmed their faith in this national purpose with
a program of foreign assistance.

The documents I transmit to the Congress to-
day— the Annual Eeports of our Foreign As-
sistance Progi'am for fiscal 1966 and 1967 —
detail tliis program in action over a 24-month
period. Their pages describe projects which
range from the training of teachers in Bolivia
to the fertilization of farmland in Vietnam —
from the construction of a hydroelectric dam in

*The reports are for sale by the Superintendent of
Documents, U.S. Government Printing Office, Wash-
ington, D.C. 20402 (fiscal year 1966, 77 pp., 35 cents;
fiscal year 1967, 99 pp., 40 cents) .

Ethiopia to inoculation against measles in Ni-
geria. The reports tell of classrooms built and
textbooks distributed, of milk and grain forti-
fied with vitamins, of roads laid and wells dug,
and doctors and nurses educated.

These are accomplishments largely unnoted
in the swift rush of events. Their effect cannot
be easily charted. But they are nonetheless real.
In the barrios and the rice fields of the develop-
ing world they have helped to improve the con-
ditions of life and expand the margin of hope
for millions struggling to overcome centuries of
poverty.

But the fundamental challenge still remains.
The forces of human need still stalk this globe.
Ten thousand people a day— most of them chil-
dren—die from malnutrition. Diseases long con-
quered by science cut down life in villages still
trapped in the past. In many vast areas, four
out of every five persons cannot write their
names.

These are tragedies which summon our com-
passion. More urgently, they threaten our
security. They create the conditions of despair
in which the fires of violence smoulder.

Our investment in foreign aid is small. In the
period covered by these reports, it was only five
percent of the amount we spent for our defense.
The dividends from that investment are lives
saved and schools opened and hunger relieved.
But they are more. The ultimate triumphs of
foreign "aid are victories of prevention. They are
the shots that did not sound, the blood that did
not spill, the treasure that did not have to be
spent to stamp out spreading flames of violence.
These are victories not of war — but over wars
that did not start.

I believe the American people— who know
war's cost in lives and fortune — endorse the in-
vestment for peace they have made in their
program of foreign aid.

Ltndon B. Johnson

Congressional Documents
Relating to Foreign Policy

90th Congress, 1st Session

Foreign Assistance Appropriations, 1968. Conference
Report to accompany H.R. 13893. H. Eept 1046.
December 14, 1967. 6 pp. . „

Operation of Article VII. NATO Status of Forces
Treaty. Report of the Senate Committee on Armed
Services made by its Subcommittee on the Operation
of Article VII of the NATO Status of Forces Agree-
ment. S. Rept. 946. December 15, 1967. 22 pp.

252

DEPARTMENT OF STATE BULLETIN

INTERNATIONAL ORGANIZATIONS
AND CONFERENCES

South Africa's Refusal To Comply
With U.N. Resolution Condemned

FolloiL'lng is a statement made in the U.N.
Security Council on January 25 hy Deputy
U.S. Representative William B. Bujfum, to-
gether loith the text of a resolution adopted hy
the Council that day.

STATEMENT BY AMBASSADOR BUFFUM

U.S./tJ.N. press release 5 dated January 25

If our search of the records is correct, today
is indeed a historic occasion. This is so because
it marks the first time in the history of this or-
ganization that the Security Council has been
seized with problems relating directly to South
West Africa. Fifty-two members of our organi-
zation have requested this meeting in the hope
that the Council will add its weight to that of
the General Assembly to secure the release and
repatriation of the 35 South West Africans now
being tried at Pretoria imder inadmissible leg-
islation: the so-called Terrorism Act of 1967.

The General Assembly in Resolution 2324 ^
has already overwhelmingly denounced the trial
and the act ; yet the South African authorities
have ignored that resolution. The concern
widely felt about the fate of those men is shared
by my Government. We share also the sense of
urgency for this meeting — particularly in view
of the fact that the judgment on the individuals
concerned may be handed down tomorrow. This
concern is highlighted by the continuing disre-
gard by the Government of South Africa of the
rights of the inhabitants of South West Africa,
the authority of the United Nations, and the
humanitarian concern of the people of the world
for the welfare of the people of South West
Africa.

Resolution 2145,^ which obtained the over-
whelming support of the General Assembly, had
already decided that South Africa's mandate

* For a statement by U.S. Representative Arthur J.
Goldberg made in the General Assembly on Dec. 14,
1967, and text of the resolution, see Bulletin of
" Jan. 15, 1968, p. 92.

' For text, see ihii., Dec. 5, 1966, p. 870.

for South West Africa was terminated and that
henceforth South West Africa came under the
direct responsibility of the United Nations. The
decision of this organization was clearly based
on South Africa's own actions in breach of its
obligations, its disavowal of the mandate, and
its disregard of the opinions of the Interna-
tional Court of Justice.

The current arrest and trial of 35 South West
Africans under an offensive Terrorism Act
which violates the most basic standards of jus-
tice to which my o^xn people are dedicated is
particularly serious. "Various representatives of
the United States have already spoken out
against the admissibility of the Terrorism Act
in other United Nations forums. In the General
Assembly last month. Ambassador Goldberg
described in detail the reasons why we consider
that the act itself violates elementary standards
and its application to South West Africa is
inadmissible.

Today we reaffirm and reinforce those same
views. The United States neither condones vio-
lence nor supports anarchy. Indeed, its position
on the matter before us springs from respect
for the law and from its preference for a peace-
ful solution of problems. Therefore, it is par-
ticularly tragic that the South African Govern-
ment should piirsue policies which, by closing
the avenues to peaceful dissent in South West
Africa, in and of themselves breed violence. The
prosecution and sentencing of the 35 South
West Africans under the Terrorism Act is with-
out justification and can only be interpreted as
a repudiation of respect for the rule of law.

It is the view of the United States Govern-
ment that these trials should be halted and that
the defendants should be freed.

In December, just before the nearly unani-
mous adoption of Resolution 2324, which con-
demned the trial and of which we were a spon-
sor. Ambassador Goldberg asked why the South
West Africans had been held incommunicado
and why they had been tried far from their own
homes. No logical response has been forthcom-
ing from the South African Government. De-
spite repeated and numerous requests from
various organs of the United Nations and vari-
ous member states, as well as certain private
groups, to that Government to honor the inter-
national status of the territory and to observe
Resolution 2145, the South African Govern-
ment has thus far ignored these appeals and
continued with the trials.

We believe that the entire international com-
munity has a responsibility to these individuals

FEBRUARY 19, 19 68

253

now on trial. That responsibility derives from
the international status of South West Africa,
the undertakings made in cliapters 9 and 11 of
the United Nations Charter, the general princi-
ples of international law, and from a very f mi-
damental and basic concern for humanitarian
treatment of fellow human beings. It is a re-
sponsibility that weighs very heavily on this
Council at a time when the lives and freedoms
of these inhabitants of the international terri-
tory of South West Afi'ica are at stake. My
Govermnent is of the opinion that the extension
of the terrorism laws to South West Africa is
illegal, and we are thus prepared to join with
other members of the Comicil in expressing such
a view.

Indeed, we think it entirely apjiropriate that
in view of the urgency of the situation, the Se-
curity Council should be asked now to add its
influential voice to the call for the discontinu-
ance of this illegal trial and to do so today. Ac-
cordingly, we welcome this move. We support
the call on South Africa to release and re-
patriate those being tried and to cease its ap-
plication of the Terrorism Act to the territory
and to its people. We believe very strongly that
it is important that the action of this Council
on such a basic and important issue should be
taken with the same unity of purpose and in-
tent that existed when Eesolution 2324 was
adopted in the General Assembly.

I can only say that it is with great gratifica-
tion and appreciation that it now appears under
your wise leadership, Mr. President, that this
will be the case. For its part, the United States
will support the resolution as submitted and
will continue to exert every appropriate effort
in seeking to secure the release of the prisoners.

It is our earnest desire to see that the people
of South West Africa as a whole will be able,
through peaceful means, to achieve their goal
and that they will be in a position to exercise
fully those basic rights to which all men are
entitled.

TEXT OF RESOLUTION «

The Security Conncil,

Taking note of General Assembly resolution 2145
(XXI) of 27 October 1966, by which it terminated
South Africa's Mandate over South West Africa and
decided, inter alia, that South Africa has no other right
to administer the Territory and that henceforth South

' U.N. doe. S/RES/245 (1968) ; adopted unanimously
without objection on Jan. 25.

West Africa comes under the direct responsibility of
the United Nations,

Taking note further of General Assembly resolution
2324 (XXII) of 16 December 1967, in which it con-
demned the illegal arrest, deportation and trial at Pre-
toria of thirty-seven South West Africans, as a flagrant
violation by the Government of South Africa of their
rights, of the international status of the Territory and
of General Assembly resolution 2145 (XXI),

Gravely concerned that the Government of South
Africa has ignored world public opinion so overwhelm-
ingly expressed in General Assembly resolution 2324
(XXII) by refusing to discontinue this illegal trial and
to release and repatriate the South West Africans
concerned,

Taking into consideration the letter of 23 January
1968 from the President of the United Nations Council
for South West Africa (S/8353),

Noting with great concern that the trial is being held
under arbitrary laws whose application has been il-
legally extended to the Territory of South West Africa
in defiance of General Assembly resolutions.

Mindful of the grave consequences of the continued
illegal application of these arbitrary laws by the Gov-
ernment of South Africa to the Territory of South West
Africa,

Conscious of the special responsibilities of the United
Nations towards the people and the Territory of South
West Africa,

1. Condemns the refusal of the Government of South
Africa to comply with the provisions of General As-
sembly resolution 2324 (XXII) ;

2. Calls upon the Government of South Africa to dis-
continue forthwith this illegal trial and to release and
repatriate the South West Africans concerned ;

3. Invites all States to exert their influence in order
to induce the Government of South Africa to comply
with the provisions of the present resolution ;

4. Requests the Secretary-General to follow closely
the implementation of the present resolution and to re-
port thereon to the Security Council at the earliest
possible date ;

5. Decides to remain actively seized of the matter.

Current U.N. Documents:
A Selected Bibliography

Mimeographed or processed documents (such as
those listed helow) may be consulted at depository
libraries in the United States. U.N. printed publica-
tions may be purchased from the Sales Section of the
United Nations, United Nations Plasa, N.Y.

General Assembly

Activities of Foreign Economic and Other Interests
Which Are Impeding the Implementation of the Dec-
laration on the Granting of Independence to Colonial
Countries and Peoples in Southern Rhodesia, South
West Africa and Territories Under Portuguese
Domination and in All Other Territories Under
Colonial Domination. Report of the Special Com-
mittee on the Situation With Regard to the Imple-
mentation of the Declaration on the Granting of

254

DEPARTSIENT OF STATE BULLETIN

Independence to Colonial Countries and Peoples.
A/6S()S. November 3, 1967. 31 pp.
Letter from the representative of Algeria transmitting
the Development Charter adopted on October 24 at
the ministerial meeting of the group of developing
countries known as the Group of 77. A/C.2/237.
November 6, 1967. 29 pp.
Report of the United Nations Council for South

West Africa. A/0S97. November 10, 1967. 16 pp.
Report of the International Law Commission on the
Work of its Nineteenth Session. Report of the Sixth
Committee. A/6S98. November 17, 1967. 34 pp.
Committee on tbe Peaceful Uses of Outer Space :
Information furnished by the U.S.S.R. on objects
launched into orbit or beyond during the period
September 22-November 3. A/AC.105/INP.173.
November 21, 1967.
Information furnished by the United States on ob-
jects launched into orbit or beyond. A/AC.105/
INF.174-179. November 22, 1967.
Information furnished by Australia on objects
launched into orbit or beyond. A/AC.lOo/INF.180.
December 5, 1967.
Treaty for the Prohibition of Nuclear Weapons in
Latin America. Report of the First Committee.
A/6921. Noveml>er 30, 1967. 5 pp.
Elimination of All Forms of Religious Intolerance.
Report of the Third Committee. A/6934. December
7, 1967. 30 pp.

TREATY INFORMATION

I

U.S. and Indonesia Sign
Air Transport Agreement

Press release 8 dated January 15
DEPARTMENT ANNOUNCEMENT

The United States and Indonesia on Janu-
ary 15 concluded an air transport services
agreement to provide a continuing basis for
commercial air services between the two coun-
tries. Prior to this agreement, U.S.-carrier serv-
ices to Indonesia have been on the basis of
I^ermission given by the Government of Indo-
nesia to the Government of the United States.

Under the new agreement, U.S.-designated
airlines may serve Djakarta and Bali over vari-
ous specified routes. Indonesia may serve San
Francisco by way of Singapore, Malaysia, Thai-
land, South Viet-Xam, Hong Kong, Taiwan,
Japan, and Honolulu.

The agreement was signed in Djakarta by

U.S. Ambassador Marshall Green and by Vice
Air Marshal Sutopo, Minister for Communica-
tions.

TEXT OF AGREEMENT

Air Transport Agreement Between the Govern-
ment of the United States of America and the
Government of the Republic of Indonesia

The Government of the United States of America and
the Government of the Republic of Indonesia,

Recognizing the increasing importance of interna-
tional air travel between the two countries and desiring
to conclude an Agreement which will assure its con-
tinued development in the common welfare, and

Being parties to the Convention on International
Civil Aviation opened for signature at Chicago on the
seventh day of December 1944,'

Have accordingly appointed duly authorized repre-
sentatives for this purpose, who have agreed as fol-
lows:

Abticle 1

For the purposes of this Agreement :

A. "Aeronautical authorities" shaU mean, in the
case of the Republic of Indonesia, the Minister for
Communications or any person or agency authorized
to perform the functions exercised at the present time
by the Minister for Communications ; and in the case
of the United States of America the Civil Aeronautics
Board or any person or entity authorized to perform
the functions exercised at present by the Civil Aero-
nautics Board.

B. "Designated airline" shall mean an airline that
one Contracting Party has notified the other Contract-
ing Party to be an airline which will operate a specific
route or routes listed in the Route Schedule of this
Agreement. Such notification shall be communicated
in writing, through diplomatic channels.

C. "Territory", in relation to a State, shall mean
the land areas under the sovereignty, protection, ad-
ministration or trusteeship of that State, and territorial
waters adjacent thereto.

D. "Air service" shall mean any scheduled air
service performed by aircraft for the public transport
of passengers, mail or cargo.

E. "International air service" shall mean an air
service which passes through the air space over the
territory of more than one State.

F. "Stop for non-tratEc purposes" shall mean a
landing for any purpose other than taking on or dis-
charging passengers, cargo, or maU.

G. "Agreement" shall mean this Agreement and the
annexed Route Schedule, and any amendments thereto.

Abticle 2

A. Each Contracting Party grants to the other Con-
tracting Party rights for the conduct of air services
by the designated airline or airlines as follows :

' Treaties and Other International Acts Series 1591.

FEBRUARY 19, 19G8

255

(i) To fly without landing across the territory of the
other Contracting Party ;

(ii) To malve stops in the said territory for non-
traflic purposes ; and

(iii) To talie on and discharge international traflic
in passengers, cargo, and mail, separately or in com-
bination, at the points in its territory named on each
of the routes specified in the appropriate paragraph
of the Route Schedule of this Agreement.

B. Nothing in paragraph A of this Article shall be
deemed to confer on the airline of one Contracting
Party the privilege of taking up, in the territory of the
other Contracting Party, passengers, cargo, or mail
carried with or without remuneration or hire and des-
tined for another point in the territory of the other
Contracting Party. However, an airline designated
by one Contracting Party to provide service over a
route containing more than one point in the territory
of the other Contracting Party may provide a stop-
over at any of such points to trafl3c moving on a ticket
or waybill providing for transportation on the same air-
line on a through journey to or from a point outside
the territory of such other Contracting Party.

C. Notwithstanding the provisions of paragraph A
of this Article, the operation of agreed services in
areas of hostilities or military occupation, or in areas
affected thereby, shall, in accordance with Article 9 of
the Convention on International Civil Aviation, be
subject to the approval of the competent military
authorities.

Article 3

A. Air service on a route specified in the route sched-
ule of this Agreement may be inaugurated by an air-
line or airlines of one Contracting Party at any time
after that Contracting Party has designated such air-
line or airlines for that route and the other Contracting
Party has granted any operating permission that may
be necessary. Such other Contracting Party shall, sub-
ject to the following paragraphs, grant this permission
vrith a minimum of procedural delay provided that the
designated airline or airlines may be required to quali-
fy before the competent aeronautical authorities of that
Contracting Party, under the laws and regulations nor-
mally applied by those authorities, before being per-
mitted to engage in the operations contemplated by
this Agreement.

B. Each Contracting Party reserves the right to with-
hold or revoke the operating permission referred to in
paragraph A of this Article with respect to an airline
designated by the other Contracting Party, or to impose
conditions on such permission, in the event that :

(1) such airline fails to qualify under the laws and
regulations normally applied by the aeronautical au-
thorities of that Contracting Party ;

(2) such airline fails to qualify under the laws and
regulations referred to in Article 4 of this Agreement,
or

(3) that Contracting Party is not satisfied that sub-
stantial ownership and effective control of such airline
are vested in nationals of the other Contracting
Parties.

C. Unless immediate action is essential to prevent
infringement of the laws and regulations referred to In

Article 4 of this Agreement, the right to revoke such
permission shall be exercised only after consultation
with the other Contracting Party.

Abticle 4

A. The laws and regulations of one Contracting
Party relating to the admission to or departure from its
territory of aircraft engaged in international air navi-
gation, or to the operation and navigation of such air-
craft while within its territory, shall be applied to the
aircraft of the airline or airlines designated by the
other Contracting Party and shall be complied with by
such aircraft upon entering or departing from, and
while within the territory of the first Contracting Party.

B. The laws and regulations of one Contracting
Party relating to the admission to or departure from
its territory of passengers, crew or cargo of aircraft in-
cluding regulations relating to entry, clearance, immi-
gration, passports, customs, and quarantine shall be
complied with by or on behalf of such passengers,
crew, or cargo of the airline or airlines of the other
Contracting Party upon entrance into or departure
from, and while within, the territory of the first Con-
tracting Party.

Article 5
Certificates of airworthiness, certificates of com-
petency and licenses issued or rendered valid by one
Contracting Party, and still in force, shall be recog-
nized as valid by the other Contracting Party for the
purpose of operating the routes and services provided
for in this Agreement, provided that the requirements
under which such certificates or licenses were issued
or rendered valid are equal to or above the minimum
standards which may be established pursuant to the
Convention on International Civil Aviation. Each Con-
tracting Party reserves the right, however, to refuse to
recognize, for the purpose of flight above its own terri-
tory, certificates of competency and licenses granted
to its own nationals by the other Contracting Party.

Article 6
Each Contracting Party may Impose or permit to
be imposed just and reasonable charges for the use of
public airports and other facilities under its control,
provided that such charges shall not be higher than the
charges imposed for use by its national aircraft en-
gaged in similar international services.

Article 7

A. Each Contracting Party shall exempt the desig-
nated airlines of the other Contracting Party to the
fullest extent possible under its national law from
import restrictions, customs duties, excise taxes, in-
spection fees, and other national duties and charges on
fuel, lubricating oils, consumable technical supplies,
spare parts including engines, regular equipment,
ground equipment, stores, and other items intended for
use solely in connection with the operation or serv-
icing of aircraft of the airlines of such other Contract-
ing Party in international air services.

B. The immunities granted by this Article shall ap-
ply to the items referred to in paragraph A :

(1) introduced into the territory of one Contracting
Party by the other Contracting Party or its nationals ;

(2) retained on aircraft of the airline of one Con-

256

DEPARTMENT OF STATE BULLETIN

I

tracting Party upon arriving in or leaving the territory
of tUe other Contracting Party ; or

(3) taljen on board aircraft of the airlines of one
Contracting Party in the territory of the other and In-
tended for use in international air service.

Abticle 8

A. There shall be a fair and equal opportunity for the
airlines of each Contracting Party to operate on any
route covered by this Agreement.

B. In the operation by the airlines of either Contract-
ing Party of the air services described in this Agree-
ment, the interest of the airlines of the other Con-
tracting Party shall be taken Into consideration so as
not to affect unduly the services which the latter pro-
vide on all or part of the same routes.

C. The air services made available to the public by
the airlines operating under this Agreement shall bear
a close relationship to the requirement of the public for
such services.

D. Services provided by a designated airline under
this Agreement shall retain as their primary objective
the provision of capacity adequate to the traffic de-
mands between the country of which such airline is
a national and the countries of ultimate destination of
the traffic. The right to embark or disembark on such
services international traffic destined for and coming
from third countries at a point or points on the routes
specified in this Agreement shall be exercised in ac-
cordance with the general principles of orderly develop-
ment to which both parties subscribe and shall be sub-
ject to the general principle that capacity should be
related :

(i) to traffic requirements between the country of
origin and the countries of ultimate destination of the
traffic ;

(ii) to the requirements of through airline opera-
tion : and,

(iii) to the traffic requirements of the area through
which the airline passes, after taldng account of local
and regional services.

Abticle 9

A. Neither Contracting Party may unilaterally im-
pose any restriction on the airline or airlines of the
other Contracting Party with respect to capacity, fre-
quency, scheduling or type of aircraft employed in con-
nection with services over any of the routes specified
in this Agreement

B. In the event that one of the Contracting Parties
believes that the operations conducted by an airline of
the other Contracting Party have been Inconsistent
with the standards and principles set forth in Article
8, It may request consultation pursuant to Article 11 of
the Agreement for the puri)Ose of reviewing the opera-
tions in question to determine whether they are in con-
formity with said standards and principles. For that
purpose statistics will be maintained in a manner to be
determined by both Contracting Parties.

Abticle 10

A. All rates to be charged by an airline of one Con-
tracting Party for carriage to or from the territory
of the other Contracting Party shall be reasonable,
due regard being paid to all relevant factors, such as
costs of operation, reasonable profit, and the rates

charged by any other airlines, as well as the character-
istics of each service. Such rates shall be subject to the
approval of the aeronautical authorities of the Con-
tracting Parties, who shall act in accordance with
their obligations under this Agreement, within the
limits of their legal powers.

B. Any rate proposed to be charged by an airline of
one Contracting Party to or from the territory of the
other Contracting Party, shall, if so required, be filed by
such airline with the aeronautical authorities of the
other Contracting Party at least thirty (30) days before
the proposed date of introduction unless the Contract-
ing Party with whom the filing is to be made permits
filing on shorter notice. The aeronautical authorities
of each Contracting Party shall use their best efforts
to insure that the rates charged and collected conform
to the rates filed with either Contracting Party, and
that no airline rebates any portion of such rates by any
means, directly or indirectly, including the payment of
excessive sales commissions to agents or the use of un-
realistic currency conversion rates.

C. It is recognized by both Contracting Parties that
during any period for which either Contracting Party
has approved the traffic conference procedures of the
International Air Transport Association, or other as-
sociation of international air carriers, any rate agree-
ments concluded through these procedures and involv-
ing an airline or airlines of that Contracting Party
will be subject to tlie approval of the aeronautical
authorities of that Contracting Party.

D. If a Contracting Party, on receipt of the notifica-
tion referred to in paragraph B above, is dissatisfied
with the rate proposed, it shaU so inform the other
Contracting Party at least fifteen (15) days prior to
the date that such rate would otherwise become ef-
fective, and the Contracting Parties shall endeavor to
reach agreement on the appropriate rate.

E. If a Contracting Party, upon review of an exist-
ing rate charged for carriage to or from its territory
by an airline or airlines of the other Contracting Party,
is dissatisfied with that rate, it shall so notify the other
Contracting Party and the Contracting Parties shall
endeavor to reach agreement on the appropriate rate.

F. In the event that an agreement is reached pur-
suant to the provisions of paragraphs D or E, each Con-
tracting Party will exercise its best efforts to put such
rate into effect.

G. (a) If, under the circumstances set forth in
paragraph D, no agreement can be reached prior to
the date that such rate would otherwise become effec-
tive, or

(b) If, under the circumstances set forth In para-
graph E. no agreement can be reached prior to the ex-
piration of sixty ((50) days from the date of notifica-
tion, then the Contracting Party raising the objection
to the rate may take such steps as it may consider
necessary to prevent the inauguration or the continu-
ation of the service in que.stion at the rate complained
of, provided, however, that the Contracting Party rais-
ing the objection shall not require the charging of a
rate higher than the lowest rate charged by its own
airline or airlines for comparable service between the
same points.

H. When in any case, after consultations pursuant to
paragraphs D and E of this Article the aeronautical
authorities of the two Contracting Parties cannot agree

FEBRUART 19, 1968

257

within a reasonable time upon the appropriate rate,
either Contracting Party may request arbitration pur-
suant to Article 12 of this Agreement. In rendering
its decision or award, the arbitral tribunal shall be
guided by the principles laid down in this Article.

I. Each Contractng Party undertakes to use its best
efforts to insure that rates for carriage specified in
terms of the national currency of one of the parties will
be established in amounts which reflect the effective
exchange rate (including any exchange fees or other
charges) at which the airlines of the Contracting
Parties can convert and remit the revenues from their
transport operations in the territory of one Contracting
Party into the national currency of the other Contract-
ing Party. If a Contracting Party does not have a con-
vertible currency and requires the submission of appli-
cations for conversion and remittance, the airlines
of the other Contracting Party shall be permitted to
file as often as monthly applications for conversion and
remittance of surplus cash receipts, free of unnecessary
or discriminatory documentary requirements. Each
Contracting Party shall permit such conversion and
remittance to be effected promptly at the exchange rate
in effect at the time of application.

Article 11

Either Contracting Party may at any time request
consultations on the interpretation, application, or
amendment of this Agreement. Such consultations shall
begin within a period of ninety (90) days from the
date the other Contracting Party receives the request.

Article 12

A. Any dispute with respect to matters covered by
this Agreement not satisfactorily adjusted through con-
sultation shall, upon request of either Contracting
Party, be submitted to arbitration in accordance with
the procedures set forth herein.

B. Arbitration shall be by a tribunal of three arbi-
trators constituted as follows :

(1) One arbitrator shall be named by each Contract-
ing Party within sixty (60) days of the date of delivery
by either Contracting Party to the other of a request
for arbitration. Within thirty (30) days after such
period of sixty (60) days, the two arbitrators so desig-
nated shall by agreement designate a third arbitrator,
who shall not be a national of either Contracting Party.

(2) If the third arbitrator is not agreed upon in ac-
cordance with paragraph (1), either Contracting Party
may request the President of the International Court
of Justice to designate the necessary arbitrator.

C. Each Contracting Party shall use its best efforts
consistent with its national law to put into effect any
decision or award of the arbitral tribunal.

D. The expenses of the arbitral tribunal, including
the fees and expenses of the arbitrators, shall be shared
equally by the Contracting Parties.

Article 13

This Agreement and ail amendments thereto shall be
registered with the International Civil Aviation Or-
ganization.

Abticle 14

Either Contracting Party may at any time notify the
other of its intention to terminate the present Agree-
ment. Such notice shall be sent simultaneously to the
International Civil Aviation Organization.

This Agreement shall terminate one year after the
date on which the notice of termination is received by
the other Contracting Party, unless withdrawn before
the end of this period by agreement between the Con-
tracting Parties.

Article 15

This agreement shall come into force on the date it is
signed.

In witness whereof, the undersigned, being duly au-
thorized by their respective Governments, have signed
the present Agreement.

Done in duplicate at Djakarta, this fifteenth day of
January 1968.

For the Government

of the United States

of America :

Marshall Green

For the Government

of the Republic

of Indonesia :

Sutopo

Route Schedule

1. An airline or airlines designated by the Govern-
ment of the United States of America shall be entitled
to operate air services on each of the air routes speci-
fied via intermediate points, in both directions, and to
make scheduled landings in Indonesia at the points
specified in this paragraph :

From the United States* via Mexico, Society Islands,
Fiji Islands, New Caledonia, New Zealand, Australia
to Bali and Djakarta and beyond to Singapore, Ma-
laysia, territory formerly comprising Indo-China, and
beyond to (a) the Philippines, Hong Kong, Taiwan,
Okinawa, Korea, Japan and beyond to the United
States, in both directions; (b) Thailand, Burma, India
and beyond via intermediate points to the United
States, in both directions.

*0n services on this route, the United States
points Hawaii, America Samoa and Guam may
be served either as points of origin or destination
or as intermediate points.

2. An airline or airlines designated by the Govern-
ment of the Republic of Indonesia shall be entitled to
operate air services on each of the air routes specified
via intermediate points, in both directions, and to make
scheduled landings in the United States at the points
specified in this paragraph :

From Indonesia via Singapore, Malaysia, Thailand,
South Vietnam, Hong Kong, Taiwan, Japan to Hono-
lulu,* and to San Francisco, in both directions.
♦Mandatory stop in Honolulu.

3. Points on any of the specified routes may at the
option of the designated airlines be omitted on any or
all flights.

258

DEPARTMENT OF STATE BULLETIN

Current Actions

MULTILATERAL

Hydrography

Convention on the International Hydrographic Organi-
zation, with annexes. Done at Jlonaco May 3, 1967.'
Signatures:' China, December 19, 1967; Cubii,
December 20, 1967 ; Dominican Republic, Decem-
ber 15, 1967 ; Federal Republic of Germany, De-
cember 14, 1967 ; Greece, December 11, 1967 ;
Guatemala, December 29, 1967 ; India, December
29, 1967; Indonesia, December 29, 1967; Iran,
December 20, 1967; Japan, December 19, 1967;
Norway, December 21, 1967 ; New Zealand, De-
cember 21, 1967; Pakistan, December 29, 1967;
Paraguay, December 29, 1967 ; Poland, December
29, 1967 ; Spain, December 29, 1967 ; Sweden, De-
cember 20, 1967; Turkey, December 29, 1967;
United Arab Republic, November 29, 1967; Yugo-
slavia, December 20, 1967.

Postal Matters

Constitution of the Universal Postal Union with final
protocol, general regulations with final protocol, and
convention with final protocol and regulations of
execution. Done at Vienna July 10, 1964. Entered
into force January 1, 1960. TIAS 5SS1.
Adherence: Botswana (with reservations), January

12, 1968.
Ratification deposited: Argentina (with reserva-
tions), June 23, 1967.

Publications

Convention concerning the international exchange of

publications. Adopted at Paris December 3, 1958.

Enters into force for the United States June 9, 1968.

Ratification deposited: Luxembourg, December 13,

1967.

Convention concerning the exchange of oflicial publi-
cations and government documents between states,
with proces-verbal. Adopted at Paris December 3,
1958. Enters into force for the United States June 9,
1908.

Ratification deposited: Luxembourg, December 13,
1967.

Space

Treaty on principles governing the activities of states
in the exploration and use of outer space, including
the moon and other celestial bodies. Opened for sig-
nature at Washington, London, and Moscow Janu-
ary 27, 1967. Entered into force October 10, 1967.
TIAS 6347.

Ratifications deposited: Mexico, January 31, 1968;
Poland, January 30, 1968.

Telecommunications

International telecommunication convention with an-
nexes. Done at Montreux November 12, 1965. Entered

' Not in force.

'Except for Cuba, all signatures made subject to
ratification or approval.

into force January 1, 1967; as to the United States
May 29, 1967. TIAS 6267.

Ratifications deposited: Dahomey, November 10,
1967 ; India, December 1, 1967 ; Singapore, Novem-
ber 23, 1967.
Partial revision of the radio regulations (Geneva,
1959), as amended (TIAS 4893, .5603), to put into
effect a revised frequency allotment plan for the
aeronautical mobile (R) service and related infor-
mation, with annexes. Done at Geneva April 29,
1966. Entered into force July 1, 1967 ; as to the United
States August 23, 1967, except the frequency allot-
ment plan contained in appendix 27 shall enter into
force April 10, 1970. TIAS 6332.

Notifications of approval: Ireland, December 5, 1967 ;
Paraguay, November 27, 1967.

Trade

Protocol extending the arrangement regarding inter-
national trade in cotton textiles of October 1, 1962
(TIAS 5240). Done at Geneva Mav 1, 1967. Entered
into force October 1, 1967. TIAS 6289.
Acceptance: Poland, October 30, 1967.
Territorial application: Netherlands for Surinam,
November 2, 1967.

Protocol amending the General Agreement on Tariffs
and Trade to introduce a part IV on trade and devel-
opment. Done at Geneva February 8, 1965. Entered
into force June 27, 1966. TIAS 6139.
Ratifications deposited: Italy, December 20, 1967;
Upper Volta, January 4, 1968.

Protocol for the accession of Argentina to the General
Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967. Entered into force October 11, 1967.
Acceptance : Norway, December 21. 1967.

Protocol for the accession of Iceland to the General
Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967.^

Acceptances: Norway, December 21, 1967; Portugal,
December 5, 1967.

Protocol for the accession of Ireland to the General

Agreement on Tariffs and Trade. Done at Geneva

June 30, 1907. Entered into force December 22, 1967.

Acceptances: Norway, December 21, 1967; Portugal,

December 5, 1967.

Protocol for the accession of Poland to the General
Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967. Entered into force October 18, 1967.
Acceptance: Norway, December 21, 1967.

BILATERAL

Finland

Agreement relating to the reciprocal granting of author-
izations to permit licensed amateur radio operators
of either country to operate their stations in the
other country. Effected by exchange of notes at Hel-
sinki December 15 and 27, 1967. Entered into force
December 27, 1967.

Mali

Geodetic survey agreement. Signed at Bamako Janu-
ary 17, 1968. Entered into force January 17, 1968.

Sierra Leone

Agreement for sales of agricultural commodities under

FEBRUARY 19, 1968

259

title I of the Agricultural Trade Development and
Assistance Act of 1954, as amended (68 Stat. 454, as
amended; 7 U.S.C. 1691-1736D), with annex. Signed
at Freetown January 23, 1968. Entered into force
January 23, 19G8.

United Kingdom

Agreement modifying the agreement of March 15, 1961,
as modified, providing for the establishment and op-
eration of a space vehicle traeljing and communica-
tion station in Bermuda (TIAS 4701, 5434). Effected
by exchange of notes at London January 17, 1968.
Entered into force January 17, 1968.

Uruguay

Agreement for sales of agricultural commodities under
title I of the Agricultural Trade Development and
Assistance Act of 1954, as amended (68 Stat. 454, as
amended; 7 U.S.C. 1691-1736D), with annex. Signed
at Montevideo January 19, 1968. Entered into force
January 19, 1968.

PUBLICATIONS

Department Issues 1968 Edition
of "Treaties in Force"

Press release 23 dated January 31

The Department of State on January 31 released for
publication Treaties in Force: A List of Treaties and
Other International Agreements of the United States
in Force on January 1, 196S.

This is a collection showing the bilateral relations
of the United States with 148 states or other entities
and the multilateral rights and obligations of the con-
tracting parties to more than 365 treaties and agree-
ments on 77 subjects. The 1968 edition Includes some
300 new treaties and agreements including the fisheries
agreements with Japan, Mexico, and the Union of So-
viet Socialist Republics ; the supplementary income tax
conventions with Belgium and Canada ; the income tax
convention with Trinidad and Tobago; the treaty of
amity and economic relations with Togo; the outer
space treaty ; the single convention on narcotic drugs ;
and the supplementary convention on the abolition of
slavery.

The bilateral treaties and other agreements are ar-
ranged by country or other political entity and the
multilateral treaties and other agreements are ar-
ranged by subject with names of countries which have
become i)arties. Date of signature, date of entry into
force for the United States, and citations to texts are
furnished for each agreement.

The publication provides information concerning
treaty relations with numerous newly independent
states, indicating wherever possible the provisions of

their constitutions and independence arrangements
regarding assumption of treaty obligations.

Information on current treaty actions, supplement-
ing the information contained in Treaties in Force, is
published weekly in the Department of State Bulletin.

The 1968 edition of Treaties in Force (360 pp.; De-
partment of State publication 8355) is for sale by the
Superintendent of Documents, U.S. Government Print-
ing Office, Washington, D.C. 20402, for $1.50.

Recent Releases

For sale hy the Superintendent of Documents, U.S.
Government Printing Office, Washington, D.C. 20402.
Address requests direct to the Superintendent of Docu-
ments. A 25-percent discount is made on orders for 100
or more copies of any one publication mailed to the
same address. Remittances, payable to the Superintend-
ent of Documents, must accompany orders.

U.S. Participation in the UN. Annual report by the
President to the Congress for the year 1966. With ap-
pendixes and organization charts. Pub. 8276. Interna-
tional Organization and Conference Series 77. 330 pp.
$1.50.

The Foreign Service. A discussion guide to accom-
pany a tape-recorded briefing by U.S. Ambassador to
Japan U. Alexis Johnson, a career officer since 1935.
Pub. 8308. 3 pp. 5<i.

American Security in an Unstable World. Text of an
address by Eugene V. Rostow, Under Secretary of
State for Political Affairs, made before the regional
foreign policy conference at the University of Kansas,
Lawrence, Kansas, on Oct. 17, 1967. Pub. 8322. East
Asian and Pacific Series 171. 18 pp. 15^.

The Price of Protectionism. Statements on U.S. trade
policy made at hearings before the Senate Finance
Committee on Oct. 18, 1967, by Secretary Rusli, In-
terior Secretary Udall, Agriculture Secretary Free-
man, Commerce Secretary Trowbridge, and Special
Representative for Trade Negotiations Roth. Also in-
cludes text of a letter sent by Treasury Secretary
Fowler to Senator Long, committee chairman. Texts
reprinted from Department of State Bulletin of Nov.
13, 1967. Pub. 8328. Commercial Policy Series 204. 20
pp. 15^.

Communist China's View of the World. A discussion
guide to accompany a tape-recorded briefing by William
J. Cunningham, Office of Asian Communist Affairs.
The discussion guide is based on the Department's pub-
lication : Bacljground Notes on Communist China. Pub.
8337. 4 pp. 54.

Agricultural Commodities. Agreement with India, sup-
plementing the agreement of February 20, 1967, as
supplemented — Signed at New Delhi September 12,
1967. Entered into force September 12, 1967. TIAS
6342. 4 pp. 5^.

Trade in Cotton Textiles. Agreement with the Philip-
pines, amending the agreement of February 24, 1964,
as amended. Exchange of notes — ^Signed at Washing-
ton September 21, 1967. Entered Into force September
21, 1967. TIAS 6343. 3 pp. 5<^.

260

DEPARTMENT OP STATE BULLETIN

INDEX February Id, WGS Vul.

LVIII, Ao. l!ti)o

Africa. The Budget of the United States Govern-
ment—Fiscal Year 1969 (Excerpts) ... 245

American Principles. "Share in Freedom"

(Rusk) 228

Asia. The Budget of the United States Govern-
ment— Fiscal Year 1969 (Excerpts) . . . 245

Aviation. U.S. and Indonesia Sign Air Transport

Agreement (text) 255

Congress

The Budget of the Unitetl States Government —

Fiscal Year 1969 (Excerpts) 245

Congressional Documents Relating to Foreign
Policy 252

President Transmits AID Reports for 1966 and
1967 to Congress (Johnson) 252

Developing Countries. Facts and Ideas on In-
dustrialization (Kotschnig) 238

Economic Affairs

The Budget of the United States Grovernment —

Fiscal Year 1969 (Excerpts) 245

The Central Themes of U.S. Policy Toward
Europe (McGhee) 234

Facts and Ideas on Industrialization (Kotsch-
nig) 238

1968 — A Year of Opportunity and Responsibility

(Roth) 242

Mr. Rubin To Represent U.S. on U.N. Trade Law

Commission 244

Educational and Cultural Affairs. The Budget of
the United States Government — Fiscal Year
1969 (Excerpts) 245

Europe. The Central Themes of U.S. Policy
Toward Europe (McGhee) 234

Foreign Aid

The Budget of the United States Government —

Fiscal Year 1969 (Excerpts) 245

President Transmits AID Reports for 1966 and

1967 to Congress (Johnson) 252

Germany. The Central Themes of U.S. Policy
Toward Europe (McGhee) 234

Human Rights. President Establishes Commis-
sion for Human Rights Tear (Johnson, Execu-
tive order) 231

Indonesia. U.S. and Indonesia Sign Air Trans-
port Agreement (text) 255

Korea. President Johnson's News Conference of
February 2 (excerpts) 221

Latin America. The Budget of the United States
Government— Fiscal Year 1969 (Excerpts) . 245

Military Affairs

President Johnson's News Conference of Febru-
ary 2 (excerpts) 221

President Reaffirms U.S. Policy on Bombing of
North Viet-Nam (Johnson) 226

Near East. The Budget of the United States
Government — Fiscal Year 1969 (Excerpts) . 245

Presidential Documents

The Budget of the United States Government —

Fi.scal Year 1969 (Excerpts) 245

President Establishes Commission for Human
Rights Year 231

President Johnson's News Conference of Febru-
ary 2 (excerpts) 221

President Reaffirms U.S. Policy on Bombing of
North Viet-Nam (Johnson) 226

President Transmits AID Reports for 1966 and
1967 to Congress 252

Publications

Dei)artment Issues 1968 Edition of "Treaties in

Force" 260

Recent Releases 260

South Africa. South Africa's Refusal To Com-
ply With U.N. Resolution Condemned (Buf-
fum, text of resolution) 253

South West Africa. South Africa's Refusal To
Comply With U.N. Resolution Condemned
(Buflfum, text of resolution) 253

Trade

1968 — A Year of Opportunity and Responsibility

(Roth) 242

Mr. Rubin To Represent U.S. on U.N. Trade Law
Commission 244

Treaty Information

Current Actions 259

Department Issues 1968 Edition of "Treaties in

Force" 260

U.S. and Indonesia Sign Air Transport Agree-
ment (text) 255

United Nations

Current U.N. Documents 254

President Establishes Commission for Human
Rights Year (Johnson, Executive order) . . 231

Mr. Rubin To Represent U.S. on U.N. Trade Law

Commission 244

South Africa's Refusal To Comply With U.N.
Resolution Condemned (BufCum, text of reso-
lution) 253

Viet-Nam

The Budget of the United States Government-
Fiscal Year 1969 (Excerpts) 245

President Johnson's News Conference of Febru-
ary 2 (excerpts) 221

President Reaffirms U.S. Policy on Bombing of

North Viet-Nam (Johnson) 226

"Share in Freedom" (Rusk) 228

Name Index

Buffum, William B 253

Johnson, President 221, 223, 231, 245, 252

Kotschnig, Walter M 238

McGhee, George C 234

Roth, William M . 242

Rubin, Seymour J 244

Rusk, Secretary 228

Check List of Department of State
Press Releases: Jan. 29-Feb. 4

Press releases may be obtained from the Office
of News, Department of State, Washington, D.C.
20520.

Release issued prior to January 29 which ap-
pears in this issue of the Bulletin is No. 8 of
January 15.

Subject

2d United Nations Conference on
Trade and Development, New
Delhi, February 1-March 25 (U.S.
delegation) (rewrite).

Rubin designated U.S. reiircsoiitative
to U.N. Commission on Interna-
tional Trade Law (rewrite).

Treaties in Force . . . I'JGS released.

No.
t21

Dale

1/29

1/31

Zi 1/31

tHeld for a later issue of the Bulletin.

U.S. GOVERNMENT PRINTING OFFICE: 1968

Superintendent of Documents

u.s. government printing office

washington. d.c. 20402

OFFICIAI. BUSINESS

POSTAGE AND FEES PAID
U.S. GOVERNMENT PRINTING OFFIcJ

THE OFFICIAL WEEICLY RECORD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

OF

STATE

BULLETIN

Vol. LVIII, No. U96

February 26, 1968

SECRETARY RUSK AND SECRETARY OF DEFENSE McNA^IARA

DISCUSS VIETNAM AND KOREA ON "JVIEET THE PRESS"

Transcript of Interview 261

UNDER SECRETARY KATZENBACH INTERVIEWED ON "FACE THE NATION"

Transcript 273

PROBLEMS AND PROGRAMS IN OUR INTERNATIONAL ECONOMIC AFFAIRS

Excerpts From, the Presidents Economic Report

amd the Annual Report of the Council of Economic Advisers 279

For index see inside hack cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1496
February 26, 1968

For sale by the Superintendent of Documents

U.S. Qoverament Printing Office

Washington, D.C. 20402

PRICE:

62 issues, domestic $10, foreign $16
Single copy 30 cents

Use of funds for printing of this publication
approved by the Director of the Bureau of
the Budget (January 11, 1966).

Note: Contents of this publication are not
copyrighted and items contained herein may be
reprinted. Citation of the DEPARTMENT OF
STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed in
the Readers' Quide to Periodical Literature.

The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
with information on developments in
the field of foreign relations and on
the work of the Department of State
and the Foreign Service.
The BULLETIN includes selected
press releases on foreign policy , issued
by the White House and the Depart-
ment, and statements and addresses
made by the President and by the
Secretary of State and other officers
of the Department, as well as special
articles on various phases of interna-
tional affairs and the functions of the
Department. Information is included
concerning treaties and international
agreements to which the United
States is or may become a party
and treaties of general international
interest.

Publications of the Department,
United Nations documents, and leg-
islative material in the field of inter-
national relations are listed currently.

Secretary Rusk and Secretary of Defense McNamara Discuss
Viet-Nam and Korea on "Meet the Press"

Following is the transcript of an interview
with Secretary Eusk and Secretary of Defense
Roiert S. McNamara on Fehruary J^ on a spe-
cial 1-hour edition of the National Broadcast-
ing Company'' s television and radio program
'■'■Meet the Press. ''^ The interviewers were Max
Franliel of the New Yorh Times., Peter Lisagor
of the Chicago Daily News, Warren Rogers of
Look magazine, Elie Abel of NBC News, and
Lawrence Spivak, permanent member of the
^'•Meet the Press''' panel, m,oderator.

Mr. Abel: Seci-etary Eusk, there is a report
this morning from Seoul that the North
Koreans have agreed to release the body of one
dead American and the wounded crew members
of the Pueblo. Can you confirm this ?

Secretary Rusk: No; I cannot confirm that.
We met with them a little more than 12 hours
ago. We have met with them on the 2d and the
4th, Korean time, and I have no information
that indicates they are prepared to do so or even
to give us the names of the injured and the
dead.

Mr. Abel: Mr. Secretary, about a week ago
you were talking rather urgently about the need
to get these men and this ship back.^ You spoke
of the seizure of the Pueblo as an act of war.
Wliat has happened between now and then to
cause the administration to moderate its tone
here?

Secretary Rusk : There has been no modera-
tion in that sense. President Jolinson has made
it clear that we would prefer to get these men
back through diplomatic process. We are using
a variety of means: first, diplomatic contacts
through capitals; secondly, the Military Armi-
stice Commission machinery at Panmunjom,
Korea ; and third, the United Nations Security
Council.^

The fact that we are now meeting at Pan-
munjom has caused the Security Council to wait
for a bit to see what happens at Panmunjom.
Now, the only satisfactory answer is the prompt
release of the ship and crew.

I cannot report to you this morning that that
is occurring, and therefore we shall have to
contmue with it.

Mr. Abel: But you hope to continue on the
diplomatic rout« yet for some time?

Secretary Rusk: Well, I do not want to put a
time factor on it. The important thing is that
we get the ship and the crew back immediately,
and we shall press that very hard indeed and
report as we see a blue sky ahead on that point.

Mr. Abel: Secretary McNamara, it is 3 years
this week since we started bombing North Viet-
Nam. It was also in '65 that we started the big
buildup on the groxmd. Wliat happened this
week? How do you relate the ability of the Viet
Cong to stage as major an offensive as this one
was to the efforts we have been making these
past 3 years?

Secretary McNamara: Three years ago, or
more exactly, 2i^ years ago, in July of 1965,
President Jolinson made the decision — an-
nounced to our people the decision to move sig-
nificant numbers of combat troops into South
Viet-Nam.^ At that time the North Vietnamese
and their associates, the Viet Cong, were on the
verge of cutting the country in half and of de-
stroying the South Vietnamese Army. We said
so at the time, and I think hindsight has proven
that a correct appraisal. Wliat has happened
since that time, of course, is that they have suf-
fered severe losses, they have failed in their ob-
jective to destroy the Government of South
Viet-Nam, they have failed in their objective to
take control of the country. Tliey have continued
to fight.

Just 4 days ago I remember reading in our

' For background, see Bulletin of Feb. 12, 1968, p.
189.

* For U.S. statements in tbe Security Council on Jan.
25 and 26, see itid., p. 193.

'For a statement by President Johnson made at a
news conference on July 28, 1965, see iiid., Ang. 16,
1965, p. 262.

FEBRUARY 26, 1968

261

press that I had presented a gloomy, pessimistic
picture of activities in South Viet-Nam. I don't
think it was gloomy or pessimistic; it was realis-
tic. It said that while they had suffered severe
penalties, they continued to have strength to
carry out the attacks which we have seen in the
last 2 or 3 days.

Mr. Abel: Mr. Secretary, are you telling us
the fact that the Viet Cong, after all these years,
were able to, temporarily at least, grab control
of some 20-odd Provincial capitals and the city
of Saigon — are you telling us this has no mili-
tary meaning at all ?

Secretary McNamara: No; certainly not. I
think South Viet-Nam is such a complex situa-
tion— one must always look at the pluses and the
minuses, and I don't mean to say there haven't
been any mmuses for the South Vietnamese in
the last several days. I think there have been,
but there have been many, many pluses. The
North Vietnamese and the Viet Cong have not
accomplished either one of their major objec-
tives : either to ignite a general uprising or to
force a diversion of the troops wliich the South
Vietnamese and the United States have moved
into the northern areas of South Viet-Nam, an-
ticipating a major Viet Cong and North Viet-
namese offensive in that area.

And beyond that, the North Vietnamese and
the Viet Cong have suffered very heavy penal-
ties in terms of losses of weapons and losses of
men in the past several days. They have, of
course, dealt a very heavy blow to many of the
cities of South Viet-Nam.

Two Parts to Korean Crisis

Mr. Rogers: Secretary Rusk, in 1957 the
Prime Minister of North Korea boasted that by
the early seventies he was going to have all of
South Korea under Communist domination.
Now we have the Puehlo incident. Wliat is be-
hind the Puehlo incident? Is it a grand design,
the beginning of a Viet- Nam-type operation, a
guerrilla operation to take over all of Korea ?

Secretary Riosk: There have been two parts to
the present crisis in Korea. One has been the
rapidly increasing infiltration of North Koreans
into South Korea, including the dispatch of a
group of about 30 highly trained officers for the
purpose of assassinating the President of South
Korea and the American Ambassador. Tliose
were promptly dispatched, but that infiltration

262

has gone up 10 times in 1967 over 1966, from
about 50 incidents to about 570 incidents.

Now, if these people in North Korea think
that they are going to take over South Korea by
force, they could not make a worse mistake. The
South Koreans and Korea's allies are going to
insure that that cannot happen.

Now, the seizure of the Puehlo may or may
not be a part of that general effort. We are not
quite clear why the North Koreans should un-
dertake this action, which is almost literally
without precedent, which is contrary to all of
the generally accepted rules of international
law and practice. It may be that they wanted to
create some sense of insecurity in South Korea
because of South Korea's assistance to Viet-
Nam. It may be that these fellows up there in
Pyongyang actually believe that somehow they
can intimidate the South Koreans and make a
political impact upon South Korea. This is not
going to happen. South Korea has been thi-iving
in the last few years, moving from strength to
strength not only politically but economically
and militarily.

I cannot read what is in the minds of these
people about seizing the Puehlo. I do know wliat
the answer must be, and that is a prompt release
of the ship and crew.

Mr. Rogers: Well, we are told that the North
Koreans have gone underground with a lot of
their heavy industry and so forth, they have put
in a lot of new gi-otmd-to-air missiles and that
sort of thing. Is it possible that they are pre-
pared to undertake a military adventure with
the imderstanding, of course, that we are com-
mitted heavily in Southeast Asia and may not
be able to resist this —

Secretary Rusk: Secretary McNamara can
talk about the extent to which we are overcom-
mitted. As a matter of fact, we have the where-
withal to do what is required in Korea without
drawing down our forces in Viet-Nam.

Mr. Rogers: I was talking about the other
side's intentions.

Secretary Rusk : Yes.

Mr. Rogers: Do you think that they are pos-
sibly harboring this possibility?

Secretary Rusk: General [Charles H.] Bone-
steel, our commander in Korea, said the other
day that we do not have indicators showing
that they intend to put on a mass offensive
against South Korea. Now, you will recall that
when the 16 nations who had troops in Korea'

DEPARTMENT OF STATE BULLETIN

reviewed the situation after the peace in 1953,
they made a very firm declaration ■* that this
sort of thing is not going: to happen again. I
liave no doubt whatever that if Nortli Korea
entertains any such hopes, they are fruitless.
And they would be well advised to abandon any
such hopes, because it just isn't going to hap-
pen. It isn't going to happen.

Operations of the Pueblo

Mr. Frankel: Secretary McNamara, does the
Na^-y know for sure that the Pueblo at no time
entered North Korean waters ?

Secretary McNamara: No; I think we can't
say beyond a shadow of a doubt that at no time
during its voyage it entered North Korean
waters. We can say this — I think it beare on the
answer:

First, the commander had the strictest of in-
structions to stay in international waters. We
believe he did.

Second, at the time of seizure, we are quite
positive it was in international waters.

Thirdly, there was a period of radio silence
appropriate to its mission from the period of
roughly January 10 to January 21, and it is
in that period that we lack knowledge, and we
will not be able to obtain knowledge of that
until the crew and the commander are released.

Mr. Frankel: Since the North Koreans seem
to want to salvage some piece of "face" here and
since our primary objective is to get the ship
and the crew back, why couldn't we say more
or less that, "Well, we think they were in the
right. There is a possibility — we don't know
until we talk to them — that they did something
wrong or that they shouldn't have or that they
violated their orders. In that case, if that turns
out to be true, we are sorry. Now let's cancel
this whole incident" — and why don't we speak
in that tone?

Secretary McNamara : The diplomatic tack is
a question for Secretary Rusk to address. Let
me suggest he speak to that.

Secretary Rusk: I think I would say to that:
We cannot be 1,000 percent sure until we get
our ofBcers and crew back and we have a chance
to interrogate them and look at the log of the

* For text of the Special Report of the Unified
CJommand in Korea, the foreword of which included
the declaration signed by representatives of 16 na-
tions at Washington on July 27, 1953, see ibid., Aug.
24, 1953, p. 246.

ship. This was a sliip peculiarly qualified to
navigate with accuracy.

Now, it would not disturb us to let every-
body know that when we get them back, if we
discover that they were at any point within a
12-mile limit, for example, as claimed by North
Korea, despite the fact that we recognize only
a 3-mile limit, we will make those facts avail-
able. We will make them available. But we
can't do that on the basis of the testimony that
we get from men who are being held prisoner
or from spliced tapes of broadcasts that they
are alleged to have made. We have got to have
access to hard information, and I would add
that we have not a single scrap of information
front any source whatever that this vessel was
inside the 12-mile limit at any time during its
voyage.

Mr. Frankel: Secretary McNamara, did this
raise havoc with your whole intelligence opera-
tion; that is, the equipment that may have
fallen into enemy hands?

Secretary McNamara: No ; we are not certain
how much equipment or classified information
did fall into enemy hands. The orders of the
commander and crew were to destroy the equip-
ment in the event of boarding as occurred. We
know from the messages that we received they
went far to that end. Exactly how much they
destroyed and how much was undestroyed we
don't know. We do know that our worldwide
communications were not compromised. Within
the hour after the event, we had changed the
foundation of those commimications.

Reaction to Viet Cong Terror Campaign

Mr. Lisagor: Secretary Rusk, President
Jolmson said last Friday '' that the Viet Cong
did not achieve their objective of a general up-
rising in the South. What does that say to you :
that they did not, or have not yet, achieved a
general uprising?

Secretary Rusk: You know, I think it is
possible, Mr. Lisagor, that these people, living
within a totalitarian practice of thought and
expression, may actually have believed that if
they came into town, came into the Provincial
capitals, there would be a popular uprising.
That has not occurred.

Today, for example, the National Assembly

' For President Johnson's news conference of Feb. 2,
see ihid., Feb. 19, 1968, p. 221.

^

FEBRTJARX 28, 1968

263

out there has passed a very strong resolution of
solidarity with the government. One of the
important presidential candidates in opposition
to the present President, Dr. [Than Khac] Suu,
issued a similar statement. The labor groups
have issued statements of solidarity.

We have not seen evidence around the coun-
tryside of what the Viet Cong might call a
popular uprising.

Now, we have known for some months they
were going to launch a winter-spring offensive,
they call it, wliich they anticipated would trig-
ger off such a popular uprising.

Now, I have no doubt that there are some
people m South Viet-Nam who are grumpy, as
there are a few people here who are grumpy,
because somehow it was not possible to give
them complete protection against what has
happened in the last few days. But on the other
hand, we find a widespread sense of outrage and
reaction against this campaign of terror put on
by the Viet Cong. So I would say that there is
very little prospect or evidence of that popular
uprising that they were talking about when
they launched the offensive.

Mr. Lisagor: Secretary Eusk, at the time
of the Bay of Pigs in 1961, the Cuban rebels
thought that when they landed there, there
would be a popular uprising against Castro.
At that time we didn't say that the people in
Cuba were in favor of Castro because there was
no popular uprising. My question is, might it
not be that the South Vietnamese people are
just simply apathetic about this whole war?

Secretary Rusk: Oh, I think there are those
in some of the villages, who are — villagers, as
there are people all over the world, who have —
pay little attention to what is going on at the
center of political power. They are not basically
politically motivated. They want to know what
is going to happen to the crops, whether their
babies are going to be born in good health,
whether they can be protected against outside
marauders of any sort. But I have been very
much impressed by the fact that all of the prin-
cipal groups in South Viet-Nam — the Bud-
dhists, the Catholics, the Montagnards, the two
sects that occupy the southwest part of the coun-
try, the million refugees from North Viet-Nam
that came down 10 years ago — these groups,
although they differ among themselves on vari-
ous aspects, seem to be united on the fact that

they do not want what Hanoi is trying to im-
pose upon them or what the Viet Cong is offer-
ing them. We just haven't seen it in any grass-
roots movement flowing through the country in
this comiection.

Mr. Lisagor: But, Mr. Secretary, in order to
have infiltrated as many men and as much
equipment as they did into cities like Saigon,
didn't they have to have a large measure of
acquiescence, if not actual collusion, from the
people in those cities ?

Secretary Rusk: I would not say a large
measure. You see, during the Tet period the en-
tire population of Viet-Nam is on the move.
People are going back to their places of birth,
they are rejoining their families, there is a lot
of traffic on the road. The suicide group that
attacked the American Embassy apparently
came in m a truckload of flowers, according to
some of the reports I have seen.

Now, that kind of infiltration — in civilian
clothes, on motor scooters, on buses — that kind
of infiltration can occur. Wliat is important is
that they did not succeed and were not per-
mitted to succeed.

Mr. Spivak : Secretary McNamara, may I ask
you a question? According to latest press re-
ports, the Communists lost about 15,000 men
killed, against only 350 for the United States.
Now, there are many people who are skeptical
of those tremendous odds. How do our military
men have time in an emergency like that to
count the dead? How do they obtain these
figures ?

Secretary McNamara: They make the best
estimate possible. And by the way, let me cor-
rect one of your figures: The latest reports of
Americans killed total 415. But in any event the
estimates of enemy dead are based on battlefield
reports. They carry the error that you would
expect from battlefield conditions. But they are
a reasonable approximation of the price the
enemy is paying for his current operations. To
some degree they may be overstated, but we
know there are many understatements as well.
Those reports do not include the dead from
artillery and air action, for example. We know
the enemy seeks to remove the dead from the
battlefield. So they are a reasonable approxima-
tion of the price the enemy is paying, corrobo-
rated in part by the actual count of enemy weap-
ons captured, some 3,800. We know normally

264

DEPARTMENT OF STATE BUIiLETlU'

there is a ratio of three or four to one between
■weapons captured and men killed on the
battlelicld.

Mr. Spli'ak: Mr. Secretary, one more ques-
tion : The President described the recent attack
against South Viet-Nam as a complete failure
as a military movement. That is not the impres-
sion many of us get from the press reports.
Would you desci-ibe that as a complete failure '2

Secretary McNamara: Well, I think the
President pointed out that this was but the first
act of a three-act play and we can't forecast the
second and third scenes at the present time.
Furthermore, there are pluses and minuses that

I we should watch, as I mentioned a moment ago.
It is quite clear that the military objective of
the attack has not been achieved. It was to divert
U.S. troops and South Vietnamese troops from
the probable offensive action of the Viet Cong
and North Vietnamese around Khe Sanh; and
secondarily, it was to penetrate and hold one
or more district or Provincial capitals. In that
sense the military objective has not been
achieved, because the troops have not been
diverted and the district and Provincial capi-
tals have not been held.

The political objective of an uprising which
Mr. Lisagor referred to has not been achieved.
And let me say, since he mentioned the Bay of
Pigs, that I have never said publicly, and I want
to say today, that when President Kennedy as-
sumed full responsibility for that action, he
didn't say what he might have said : that every
single one of his advisers, me included, recom-
mended it. So I was responsible for that.

In any event, they did not achieve their
political objective. Nor have they fully achieved
their psychological objective, although I think
there have been pluses and minuses psycho-
logically. There is no question but what the
people of the cities and towns of South Viet-
r Nam have been dealt a heavy blow. They must
have been surprised, they must have been im-
pressed by the weight of the attack. But, at the
same time, we know that they have been re-
volted by the violence and the brutality of the
attack, and the Viet Cong are going to leave
those cities and towns with less support than
when they entered it.

Mr. Ahel: Secretary Rusk, to return jivst for
one moment to the Pvehio, you were saying a
few minutes ago that if after recovering the

ship and the crew, we were to discover that it
had in fact been inside territorial waters, we
would make those facts known. Are you pre-
pared to go one step further and to say now,
or to have Secretary McNamara say now, that
if there was such an infraction, the men would
be disciplined?

Sovereign Immunity of Warships

Secretary Ritsk: Well, if there were such an
infraction — and we have not the slightest evi-
dence that there was such an infraction — pre-
sumably those men would have to, at least the
skipper would have to, face the fact that there
was a violation of very stringent orders in this
respect ; and I leave that question to Secretary
McNamara.

Let me point out something that is quite im-
portant here. Warships on the high seas — ac-
cordmg to the 1958 conventions on the law of
the sea — warships on the high seas have com-
plete immunity from the jurisdiction of any
state other than the flag state."

Now, let's assume just for a moment what is
obviously not true from the testimony from all
sides, including the North Korean side, that this
ship was picked up in territorial waters, or in
waters claimed by North Korea to be territorial
waters. Even there, under the convention of the
law of the sea, 1958, article 23, it makes it quite
clear that if any warship comes into territorial
waters, the coastal state can require it to leave.
It does not obtain a right to seize it.

Now, in 1965 and in 1966 there were three
incidents in which a Soviet war vessel came into
American territorial waters within our 3-mile
limit. We didn't seize those vessels; we simply
required them to depart. That is the civilized
practice among nations in dealing with such
questions, because warships have a sovereign
immimity attached to them, you see. So under
no theory of the case can the action taken by
North Korea be justified.

Mr. Abel: Secretary McNamara, would you
care to follow up on this point of disciplining
the skipper if in fact we discover he was in
territorial waters?

Secretary McNamara: We would always dis-

' For texts of the conventions, see Wid.. June 30, 1958,
1111.

FEBRUARY 26, 19G8

265

cipline a commander if lie violated his instruc-
tions consciously or through negligence. We
have no evidence that he did here. I certainly
wouldn't want to predict any action we would
take following his return.

Changing Balance in Viet-Nam

Mr. Rogers: Secretary McNamara, on the
question of enemy dead in this latest offensive,
upward of 15,000, how can you tell if a dead
person was a Viet Cong?

Secretary McNamara: In some cases they
wear Viet Cong uniforms. In other cases they
have Viet Cong weapons in their hands;
roughly a third or a fourth of them had Viet
Cong weapons in their hands. In other cases
they carry Viet Cong documents and identifica-
tion on them.

I do not think we should imply that the
15,000 dead are all from the main-force units of
the Viet Cong or the North Vietnamese Regular
Army units that have been infiltrated into
South Viet-Nam. Undoubtedly some of the
dead represent guerrillas, porters, logistical
personnel.

Mr. Rogers : Now, since the South Vietnamese
forces were primarily engaged in this action,
your figures, I guess, come primarily from the
South Vietnamese. And in the short space of
time, do you have any way to check up on this,
to make sure that the figures are not inflated ?

Secretary McNamara: Let me first emphasize
a point you implied by your question. It is true
the South Vietnamese forces were primarily
engaged in this action. They are the ones who
are bearing the brunt of the fighting. And of
course they are also bearing the heaviest cas-
ualties. I mentioned a moment ago there have
been 415 Americans killed, but there have been
904 South Vietnamese killed. Now to specifi-
cally answer your question, "How, in the midst
of the battle, do we in the United States know
of the accuracy of these figures?" — and of
course the answer is, "We do not." They are the
best possible estimates. They come to us not
from the South Vietnamese but from the Amer-
ican advisers who are accompanying the South
Vietnamese units.

Mr. Rogers: Even if those figures are correct,
down to almost the fractions that we get>— you
know, you get figures like 13,722— even if those
are correct, how can a small country like North
Viet-Nam continue to suffer these heavy losses

and still be able to, as you said a moment ago,
fight and apparently in some cases improve their
fighting ?

Secretary McNamara: The population of
North Viet-Nam is about 17 million. I think it
is quite clear they have a manpower supply that
will continue to support losses of the kind they
are absorbing. Wliether they can support them
psychologically and politically is another ques-
tion.

Mr. Rogers : Isn't there something Orwellian
about it, that the more we kill, the stronger
they get?

Secretary McNamara : I don't think it is fair
to say that they are getting stronger. It is the
balance of force that is important here, and it is
very clear that they are not as strong today as
they were 3V2 years ago. Three and a half years
ago the South Vietnamese forces were on the
verge of defeat. The North Vietnamese and the
Viet Cong forces were on the verge of victory.
That is not tnie today. The balance has defi-
nitely moved toward the South Vietnamese.

I think, however, that you are putting imdue
emphasis on the military aspects of this war.
This is a complicated situation. There isn't a
simple military solution to it. It is a political-
economic-military problem. Each of these facets
intertwine, and we should not only examine the
military operations when we are talking about
relative balance of progress.

Psychological Factors

Mr. Frankel: Secretary Eusk, the adminis-
tration has naturally been stressing the things
that they think the Viet Cong did not achieve
in this week of attacks — didn't cause an upris-
ing, which you say may have been one of their
goals, didn't seize cities for any permanent
period. But yet we have also been given to
understand that the real name of this game out
there is "Wlio can provide safety for whom?"
And haven't they in a very serious way humili-
ated our ability in major cities all up and down
this country to provide the South Vietnamese
population that is listed as clearly in our control
with a degree of assurance and safety that South
Vietnamese forces and American forces together
could give them?

Secretary Rusk: There is almost no way to
prevent the other side from making a try. There
is a way to prevent them from having a
success.

I said earlier that I thought there would be

266

DEPARTMENT OF STATE BTJLLETIN'

a number of South Vietnamese who would take
a very jrrumpy view over the inability of the
Government to protect them against some of
tlie things that have happened in the last 3 or
4 daj's. I3ut the net effect of the transaction is
to malie it clear that the Viet Cong are not able
to come into these Provincial capitals and seize
Provincial capitals and hold them; that they
are not able to announce the formation of a new
committee, or a coalition or a federation, and
have it pick up any support in the country ;
that they are not able to undermine the soli-
darity of those who are supporting the
Government.

No; I think there is a psychological factor
here that we won't be able to assess until a week
or two after the event, and I might say also
that we know there is going to be some hard
fighting ahead. We are not over this period at
all. As a matter of fact, the major fighting up
in the northern part of South Viet-Nam has
not yet occurred, so there are some hard battles
ahead.

Mr. Frankel: Are we sure, by the way, sir,
that this whole buildup up in the north was not
intended as a diversion from what has already
taken place?

Secretary Ritsk: Well, it has not succeeded in
drawing forces away from other missions.
After all, the other side has to take into account
the fact that something in the order of 15,000
of their people have been killed and another
four or five thousand have been taken prisoner.

We can see some of the pains on our own
side, but imagine yourself at the general head-
quarters of the Viet Cong-North Vietnamese
forces and see how they would be totting up
this situation at the present time. In the III
and IV Corps areas they have committed prac-
tically every unit they had. There have been
some up in II and I Corps that have not been
committed in this situation. Now, they have had
disastrous losses.

Now, undoubtedly there is going to be some
sag in morale due to what has happened in the
last 3 or 4 days, but this could be followed by
a sharp increase in morale when it is discovered
that even this kind of an effort produces no
result for the other side.

Mr. Franhel: What does this tell us in terms
of the American impatience with this war,
about when we could really negotiate and leave
out there? Is it really still possible to say that
unless every Viet Cong were to be turned in,
and if they were to turn their weapons in, that

we could leave that country in 6 months and that
the South Vietnamese Government is capable of
extending its —

North Vietnamese— Viet Cong Operation

Secretary Rusk: If the North Vietnamese
forces go liome, if the violence in the South
subsides, the countries with troops in South
Viet-Nam have indicated they could take their
forces out in a period of about 6 months' time — '

Mr. Frankel: But these attacks were not or-
ganized by the North Vietnamese, were they?

Secretary Rusk: Of course they were. There
were North Vietnamese regiments involved in
these attacks. Let's not be under misapprehen-
sion, Mr. Frankel, that these military actions
are not under the control of Hanoi.

Mr. Frankel: No; I am not questioning the
control of the organization, but weren't they
largely Viet Cong forces?

Secretary Rusk: Well, the Viet Cong forces
in III and IV Corps made up the principal
numbers of those conducting the attack; but
there were North Vietnamese elements involved
there, and in the II Corps there were significant
numbers of North Vietnamese. The concentra-
tion of North Vietnamese forces around the
Tchepone area did not take part in these opera-
tions. But this is a North Vietnamese- Viet Cong
operation which cannot be sorted out and sep-
arated out as between one and the other. This
is a joint enterprise.

Mr. Llsagor: Secretary McNamara, a great
many people — myself included — have been puz-
zled by why, in view of the advance intelligence
we had about the enemy actions in Viet-Nam,
they were able to achieve such tactical surprise.
They apparently directed their attacks against
areas supposedly defended by South Viet-
namese Army units. Was that correct, and what
happened to those South Vietnamese armies?

Secretary McNamara: We did have advance
intelligence of the winter-spring campaign of-
fensive that the North Vietnamese were plan-
ning. We know that it includes a major attack
in the northern part of South Viet-Nam. We be-
lieved it also included planned attacks on the
cities and towns, particularly the district head-
quarters and Province capitals in the 44
Provinces.

' For text of a joint commvinique issued at the close
of the Manila Summit Conference on Oct. 25, 1966, see
ibid., Nov. 14, 1966, p. 730.

FEBRUARY 26, 1968

267

We didn't know the date on which these guer-
rilla attacks would take place, and we didn't
know the specific targets. I doubt very much
that intelligence would ever provide that much
detail.

I tliink it is perfectly clear that the South
Vietnamese had sufficient intelligence to main-
tain their forces in a state of alert such as they
were able to inflict these very heavy penalties
on the Viet Cong and North Vietnamese, but I
would be the last to tell you that we had perfect
intelligence. We certainly did not.

Mr. Lisagor: Mr. Secretary, the White House
itself said this past week that we knew to the
day, to be precise and quote them, that these
attacks would occur.

Secretary McNamara: We knew that they
were scheduling very large attacks in the north-
em part of South Viet-Nam for the Tet or post-
Tet period. We certainly didn't know to the
hour of the day the attack planned on the
American Embassy, for example, or some other
structure ; and it is absolutely impossible to ob-
tain that kind of knowledge. We will never
have an intelligence system that will provide it
to us.

Mr. Lisagor: Would the Viet Cong have been
less able to stage these attacks, especially in the
highland area, if we had not delivered the
15,000 troops to the Tcliepone area?

Secretary McNamara: No; I think it is veiy
clear that the Viet Cong would have had essen-
tially the same capability. The diversion of
troops from other areas in South Viet-Nam —
which wasn't great, by the way — the buildup in
the Khe Sanh area has come largely from the
total increase in our forces in South Viet-Nam
over the past 3 or 4 months. But in any event, I
think the result would have been essentially the
same.

Mr. Lhagor: Secretary McNamara, you said
in your posture statement before the Congi'ess
this week that the main-force units of the enemy
are not capable of wiiming major battles against
U.S. forces. The President said last Friday that
a full-scale battle is now imminent at Khe Sanh
and I think you suggested that earlier on tliis
progi-am. Why are they trying this kmd of tac-
tic? Wliy are they throwing themselves into a
major battle against what shoidd be our long
suit?

Secretary McNamara: Well, tliis is sheer
speculation on my part. I can only suggest now
that he hoped to inflict a severe defeat upon us,

a defeat of the kind they inflicted on the French
at Dien Bien Phu. We believe we are prepared
for such forces and strategy and tactics and
equipment and supplies to prevent that.

Political Consequences

Mr. Spivak: Secretary Eusk, may I ask you
a question?

Secretary Rush: Yes.

Mr. Spivak: The President, the other day,
asked this question— he said, "Wliat would the
North Vietnamese be doing if we stopped the
bombing and let them alone?"* Now, there is
some confusion about what we want them to do.
Wliat is it we want them to do today if we stop
the bombing?

Secretary Rush: Well, many, many months
ago the President said: almost anything as a
step toward peace.'

Now, I think it is important to understand
the political significance of the events of the
last 3 or 4 days in South Viet-Nam.

President Johnson said some weeks ago that
we are exploring the difference between the
statement of their Foreign Minister about
entering into discussions and his own San An-
tonio formula.^"

Now, we have been in the process of exploring
the problems that arise when you put those
two statements side by side. Hanoi knows that.
They know that these explorations are going on,
because they were party to them.

Secondly, we have exercised some restraint
in our bombing in North Viet-Nam during
this period of exploration, particularly in the
immediate vicinity of Hanoi and Haiphong.
Again, Hanoi knows tliis.

They also knew that the Tet cease-fire period
was coming up.

Mr. Spivak: Have we stopped the bombing
there?

Secretary Rush : No ; we have not had a pause
in the traditionally accepted sense, but we have
limited the bombing to certain points in order
to make it somewhat easier to carry forward
these explorations, so that particularly difficult
incidents would not interrupt them. We have

° For an excerjit from remarks made by President
Johnson at a Medal of Honor ceremony on Feb. 1,
see ihid., Feb. 19, 19G8, p. 226.

" At a news conference on Feb. 2, 1967.

" For an address by President Johnson made at San
Antonio, Tex., on Sept. 29, 1967, see Bulletin of Oct. 23,
1967, p. 519.

268

DEPARTMENT OF STATE BULLETIN

not gone into a pause, as that word is generally
understood.

But they have also known that the Tet cease-
fire Avas coming up, and they have known from
earlier years that we have been interested in
converting something like a Tet cease-fire into
a more productive dialog, into some opportu-
nity to move toward peace.

Xow, in the face of all these elements, they
participated in laying on this major offensive.
Now, I think it would be foolish not to draw
a political conclusion from this: that they are
not seriously interested at the present time in
t<alking about peaceful settlement or in explor-
ing the problems connected with the San An-
tonio formida.

I remind those who don't recall that formula
that it was that we would stop the bombing
when it would lead promptly to productive dis-
cussions and we assumed tliat they would not
take advantage of this cessation of bombing
while such discussions were troinof on.

Now, it is hard to imagine a more reason-
able proposal by any nation involved in an
armed conflict than that. And I think we have
to assume that these recent offensives in the
South are an answer, in addition to their public
denunciation of the San Antonio formula.

Mr. Abel: Are you saying, Mr. Secretary,
that we interpret this offensive as their rejection
of the diplomatic overtures that have been
made ?

Secretary Rush: Well, they have rejected the
San Antonio formula publicly, simjily on the
I)olitical level, but I think it would be foolish
for us not to take into account what they are
doing on the ground when we try to analyze
what their political position is. I mean you will
remember the old saying that "Wliat you do
speaks so loud I can't hear what you say."

Now, we can't be indifferent to these actions
on the ground and think that these have no
consequences from a political point of view.

So they know where we live. Everything that
we have said — our 14 points," the 28 pro-
posals ^^ to which we have said "Yes" and to
which they have said "No," the San Antonio
formula — all these things remain there on the
table for anyone who is interested in moving
toward peace. Tliey are all tliere; but they know
where we live, and we will be glad to hear from

" For background, see i6((7., Feb. 20, 1967, p. 2.S4.
" /6irf., May 22, 1907, p. 770.

them some time, at their convenience, when they
decide that they want to move toward peace.

Mr. Abel: I am assuming, sir, that the San
Antonio formula stands as our longer term
position here.

Secretary Rvsk: That is correct.

Mr. Abel: Aren't we leaving out of account,
however, a tliought that is embodied in these
many captured documents that have been
thrown around so much in the discussion here ;
namely, that they did speak of a general upris-
ing and of inflicting humiliating defeats ujion
us, of capturing Province capitals, but all of
this was somehow keyed to imminent negotia-
tions, to strengthening their position before
hand, isn't that right?

Secretary Rvsk: Tlien I would suppose if
that is true — and I cannot confirm that that is
true in terms of what I know about the atti-
tude of the other side — but to the extent that
that is true, then I would suppose that they
would be further off from negotiation than be-
fore because they now have to count 20,000
killed and captured in the last few days.

Mr. Rogers: Secretary McNamara, you are
approaching the end of a long and distinguished
career as Secretary of Defense, and during
that time I do not think I have ever heard
you make quite the statement you made a mo-
ment ago in which you said that you pleaded
you made a mistake in your Bay of Pigs rec-
ommendation. Can you think of any other cases
where you also failed?

Secretary McNarruira: I can thuik of far
more than the time would pennit me to list, but
I do not propose to start trying.

Mr. Rogers: Could you list a few of the —

Secretary McNamara: I do want to empha-
size what I said a moment ago — and it is very
much on my conscience— that I recommended
that we undertake the Bay of Pigs and it was a
serious error, and it was an error for which
President Kemiedj' assumed full responsibility
and that was a gallant deed; but I want the
American people to know that it wasn't by any
means a decision that was not supported by
others in the Government. It was recommended
to him unanimously by all of his advisers.

]\[r. Roger's: I^et me prod you in another case
and get back to Viet-Nam. It seems to me to go
really to Mr. Lisagor's point a moment ago, that
the fact that this thing was able to succeed as
much as it did may, it seems to me, indicate a
failure at least of our pacification program. If

FEBRUARY 2 6, 1968

269

the people were coming over, they would have
told us.

Secretary McNamara: No; I do not think
so — any more than we could expect to stop all
uprisings in our cities in this country. These
guerrilla-type actions can be initiated by a few,
and the many can't stop them. The many can
prevent them from succeeding but the many
can't stop them from starting ; and I think that
is exactly what has happened in South Viet-
Nam today.

Mr. Frankel: Secretary McNamara, let me
take advantage of your valedictory mood. Look-
ing back over this long conflict and especially
in this rather agonized week in Viet-Nam, if
we had to do it all over again, would you make
any major changes in our —

Secretary McNamara: This is not an appro-
priate time for me to be talking of changes,
with hindsight. There is no question but what
5 or 10 or 20 years from now the historians
will find actions that might have been done
differently. I am sure they will. As a matter of
fact, my wife pointed out to me the other day
four lines from T. S. Eliot that answer your
question. Eliot stated:

We shall not cease from exploration
And the end of all our exploring
Will be to arrive where we started
And know the place for the first time.

Now, that applies to Viet-Nam. I am learning
more and more about Viet-Nam every day.
There is no question I see better today than I
did 3 years ago or 5 years ago what might have
been done there.

On balance, I feel much the way the Asian
leaders do. I think the action that this Govern-
ment has followed, policies it has followed, the
objectives it has had in Viet-Nam, are wise. I
do not by any means suggest that we have not
made mistakes over the many, many years that
we have been pursuing those objectives.

Mr. Frankel: You seem to suggest that we
really didn't— that none of us appreciated what
we were really getting into.

Secretary McNamara: I don't think any of us
predicted 7 years ago or 15 years ago the deploy-
ment of 500,000 men to Viet-Nam. I know I
didn't.

Secretary Rusk: But I think, Mr. Frankel,
if I may interrupt here, a part of this is that we
have tried at every stage to bring this matter to
a peaceful conclusion. In retrospect, was it a
mistake or not to go to the Laos conference in

1962 ? There President Kennedy and I thought
that we ought to try to remove that little coun-
try from the conflict in Southeast Asia. Had we
succeeded, that would have been a major step
toward peace in Southeast Asia. On the other
hand, we got no performance on that agree-
ment. The North Vietnamese troops stayed
there. They continued to use it for infiltration.

Now, some of our mistakes, if you like, have
been through an efl'ort to bring it to a peaceful
conclusion without an enlargement of the con-
flict; and that is something that I think this
country will always be inclined to do, because
our major purpose is peace in these situations.

Mr. Lisagor: Secretary Rusk, I'd like to
quote a statement from Secretary McNamara
and then ask you a question about it. In his pos-
ture report, he said that we cannot provide
South Viet-Nam with the will to survive as an
independent nation, or with a sense of national
purpose. I'd like to ask you whether you are
satisfied that they are developing this will and
sense in view of the fact that they have not yet
declared a state of national mobilization, they
still don't draft 18- and 19-year olds for their
army.

Secretary Eusk: Well, I have seen many
countries in a state of crisis in my lifetime, and
it is always easy to find one or another weak
spot in a particular performance. Wliat, I must
say, impresses me is the dogged determination
of all of these major elements in South Viet-
Nam not to accept what Hanoi is trying to
impose upon them by force.

Now, of course, there are difficulties. If you
had listened to the expressions of difficulties
among the Allies during World War II, you
would have wondered how we ever won the war.
There were enormous difficulties in the Korean
struggle. No one minimizes those ; but there has
been, despite 20 years of conflict in Viet-Nam,
there has been apparent a determination not to
accept what Hanoi is trying to impose upon
them by force. That doesn't mean they act with
complete solidarity on every question.

I think they are going ahead with their man-
power program. I think surely it is fair to give
the legislature a chance to look at these mobili-
zation decrees — after all, we claim we are inter-
ested in a democratic government out there — so
the legislature is now looking at those measures,
just as we would expect our Congress to look at
similar measures in this country. So we can't
have it both ways. We can't expect from them

270

DEPARTMEKT OF STATE BULLETIN

the efBciency of a totalitarian society and the
relaxation of a democratic society.

Secretary McNamara: Since you have quoted
me, may I just interrupt one moment to say
the South Vietnamese would be the first to en-
dorse what I said. This is their war, and the
reason it is their war is that it is not primarily
a militarj' war. It is a political war; and what
they are trying to do is create a state, and they
can do it, not we. Only they can do it, and that is
basically what I have said and what I believe.

Secretary Rusk: May I just illustrate this
point again, Mr. Lisagor, because we are in a
situation where whatever you do there is bound
to be some criticism. The South Vietnamese
could have prevented much of this infiltration
had they organized themselves as a totalitarian
society. This kind of infiltration and this kind
of exercise could not have been carried on in
North Viet-Nam because every hamlet, every
precinct, every homo has got a watchdog in it.

If the South Vietnamese had organized them-
selves to prevent — in line with some of the
present criticism — prevent what happened,
then they would have had their ears boxed
most roundly by people in this country for
being so totalitarian about it. In other words,
you can't win if the determination is to criticize
whatever happens.

Mr. Lhagor: But the point, Mr. Secretary,
is that South Korea is not totalitarian and yet
I understand 85 percent of those who had infil-
trated into South Korea from the North re-
cently were informed about by the South
Korean citizens.

Secretary Rusk: Yes; we're talking about
hundreds there and not tens of thousands, as
we are talking about in Viet-Nam.

Capture of the Pueblo

Mr. Spivak: With regard to the Pueblo, there
are many Americans very greatly disturbed
that a ship as important as the Puehlo could
be captured so easily. Why wasn't it better
protected ?

Secretary McNamnra: I think that is a good
question, and the answer is threefold.

First, to have protected it would have been
a provocative act.

Secondly, it would have compromised the mis-
sion. This ship went undetected by the North
Koreans for 10 to 12 days. During that period
of time it carried out its mission. Not only

would it have been subject to capture during
that period had it been detected ; but also their
reaction, a reaction it was sent there to deter-
mine, would have been quite different.

And finally, the protection itself always runs
the risk of leading to military escalation.

There is, of course, beyond that the fact that
is very important, that Secretary Rusk men-
tioned. We are operating on the high seas in
an entirely legal fashion.

Neither the Soviets nor we protect ships of
this kind. Nor do we protect aircraft of similar
kinds. You will remember we lost an RB-47
shot down by the Soviets in a mission similar
to this in 1960. It was unprotected. Neither then
nor now do we protect it, for the reasons I have
outlined.

Mr. Spivak: Now, Mr. Secretary, I under-
stand it took 2 hours to tow the Ptteblo into the
port of Wonsan. ^Vliy did we fail to rescue the
ship during that time ?

Secretary McNa?nara: There were three or
four reasons why reaction forces were not sent.

First, it was necessary to find out what hap-
pened, and it takes time. In the case of the
Liberty in the Mediterranean in June as an
example, I thought the Liberty had been at-
tacked by Soviet forces. Thank goodness, our
carrier commanders did not launch immedi-
ately against the Soviet forces who were op-
erating in the Mediterranean at the time. I then
thought it had been attacked by Egyptian
forces. Who else could have done it? Thank
goodness, we did not launch against the Egyp-
tians. We took time to find out it was the Israeli.
Now, the same kind of a problem existed with
respect to the Pueblo.

Secondly, we do not maintain contingency
plans to prevent the hijacking of each individ-
ual American ship operating on the high seas.

Tliirdly, any reaction force that would have
moved into the area would have moved into
the air control sectors of the North Korean Air
Defense, manned by about 500 aircraft. And
almost surely any reaction force that we could
have mounted, or could have been expected to
mount, would have faced a bloody battle at the
time.

And finally, I think it is quite clear with
hindsight that no reaction force could liave
saved those men.

Secretary Rusk: I would like to add if I may
on that, that the Soviets have about 18 of these
ships scattered around the world, some of them

FEBRUARY 26, 1968

271

off our o^vn coast, some of them in the Sea of
Japan, one of them off Guam. I would hope
very much they would not attempt to put air
cover and protection around those vessels when
they come into our general vicinity.

ilr. Spivah: Secretary McNamara, am I to
conclude from what you have just said that the
same thing can happen to other American
ships ?

Secretary McNamara: Yes ; I tliink so. I think
it can happen to our ships, it can happen to
British ships, it can happen to Japanese ships,
it can happen to Russian ships.

Mr. Ahel: I do not know which of you ought
to get this question; but it has to do with the
fact that the 1965 ground buildup and the be-
ginning of the bombing was triggered, you will
I'ecall, by similar terror attacks at Pleiku and
Qui Nhon, similar to what we have now seen in
some 20-odd cities of Viet-Nam. "Wliat is our
answer going to be this time, do we send more
men?

Secretary McNamara: The commanders have
not asked for more men, they feel they have
adequate strength to meet the situation now and
as far into the future as they project. I do not
want to foreclose the possibility of requests in
the future, but we have received none to date.

"Wliile I am on that, let me simply say we are
prepared to send more men if more are required.
We have sent three carriers into the Korean
waters, plus substantial reinforcement to our
airjjower there, all out of our active forces,
without in any way reducing the forces in
Western Europe or Southeast Asia. We can
send additional aircraft or additional ground
forces from our active forces, should that prove
necessary.

Mr. Rogers: Secretary Rusk, Roger Hils-
man, who used to work for you, says we either
have to change our goal now in Viet-Nam, which
is to prevent the spread of communism in the
South, or invade North Viet-Nam. Wliat is
your reaction to that?

Secretary Rush: It has been some 3 years now
since I have had the benefit of Mr. Roger Hils-
man's advice, and I don't expect to take it seri-
ously now.

Mr. Franhel: Mr. McNamara, the sum total
of what you and Mr. Rusk say is : Wliile they
were hitting us in the guts of our cities in South

Viet-Nam, we were in fact restraining ourselves ]
on their biggest cities in North Viet-Nam. Are
we going to retaliate ?

Secretary McNamara: I don't want to antic-
ipate future decisions of military operations.

Mr. Lisagor: Secretary Rusk, to clarify our
terms now for halting the bombing, you have
said just a little while ago, "almost anything."
Now, Mr. Clifford [Clark M. Clifford, Secre-
tary of Defense-designate] says "normal" ac-
tivity. Wliatever happened to the concept of
reciprocity and mutual deescalation that we
talked about in the past ?

Secretary Rusk: President Jolmson stated at
San Antonio that we assume that the other side
will not take military advantage of a cessation
of the bombing while discussions are going for-
ward ; and that is something which can be ex-
plored privately. Such explorations were in
process. It would not be, I think, advisable for
me to get into details, because it may be that
we will reach a point where that process can be
picked up again. But these are matters which
can only get somewhere if there is some interest
on the other side in a peaceful settlement of this
situation, and thus far we don't see much evi-
dence of that.

Mr. Lisagor: Since we are somewhat con-
fused about the terms, is the enemy perfectly
clear about them, Mr. Secretary ?

Secretary Rusk: Oh, I would think that
Hanoi is more clear than you are, Mr. Lisagor.

Mr. Abel: Mr. Secretary, do you think it at
all bad or contradictory that in the same week
in which we lose a nuclear-armed bomber in
Greenland, we appealed to the Russians, of all
people, to help spring our men from Korea?

Secretary Rush : No ; I wouldn't comiect these
two in any way. This was an unfortunate acci-
dent there, but it had no political significance.
It was an operational accident.

We called upon the Russians and other gov-
ermnents because they have effective contacts
with the North Koreans and also because they
have a very important stake in these elementary
principles of international law with respect to
open seas —

Mr. Spivah : I am sorry to interrupt, Mr. Sec-
retary, but our time is up.

Thank you. Secretary Rusk and Secretary
McNamara, for being with us today on "Meet
the Press."

272

DEPARTMENT OF STATE BULLETIN

Under Secretary Katzenbach Interviewed on "Face the Nation"

Under Secretary Nicholas dcB. KatzenhacK
was interviewed on the Columbia Broadcasting
System's television and radio program '■'■Face
the NatiorC on February 4 ^y CBS News cor-
respondents Martin Agronsky and Marvin Kalb
and Clayton Fritchey, a syndicated columnist.

Mr. Agronsl-y: Mr. Under Secretary, Ad-
miral [U.S.G.] Sharp, the U.S. naval com-
mander in the Pacific, came back here in
November and said we ai"e winning the war. In
the light of the extensive, intensive, ferocious
enemy attacks of the past few days in South
Viet-Nam, do you think we are still wimiing
the war?

Mr. Katzenhach: Yes; I do, Mr. Agronsky.
I think it is too early to assess all of the etfects;
but I see no reason to make these incidents,
serious as they are, an excuse or a reason for
changing and denying all the progress that
we have made in Viet-Nam.

Mr. Agronsky : Mr. Under Secretary, your
optimism that we're still winning the war is re-
assuring. One person who doesn't share that
optimism is Senator [Charles H.] Percy of Illi-
nois, who has said that the Jolinson administra-
tion— I quote him now — "has deliberately mis-
led the American people about the groat
strength of the Viet Cong." Mr. Percy joins
with Senator [Mike] Mansfield, the Democratic
majority leader, in calling on the President, in
light of what has been happening, to reass&ss
the whole picture of U.S. involvement in South
Viet-Nam. Do you feel that Mr. Percy is wrong
and that is unnecessary ?

Mr. Katzenhach: I don't believe that in any
sense at all the administration has misled the
American people. "We have, in the course of this,
recognized that tlie problems in Viet-Nam were
considerable, that they would take a good deal
of time to resolve, and that they had great diffi-
culties to them. We believe that we have made
slow and steady progress; and I would stand by
that, even despite the recent events, certainly
until we have time to assess those events. In my

judgment it is very premature to jump on these
events of the last 3 or 4 days and say, "Oh, my
goodness, isn't this terrible." I think a sober
judgment needs to be made when all the facts
are in.

Mr. Fritchey: Mr. Secretary, we can't hold
you responsible for what everyone has said, but
I would like to follow up Mr. Agronsky by some
remarks that General Westmoreland [Gen. Wil-
liam C. Westmoreland, Commander, U.S. Mili-
tary Assistance Command, Viet-Nam] has been
saying. He has said the situation in Viet-Nam —
I have the quotes here — are very, very encour-
aging, that the guerrilla war, guerrilla forces
are "declining at a steady rate," and that the
end of war "begins to come into view." Don't
you think the total effect of all these statements
of Admiral Sharp, General Westmoreland, and
the others we have been referring to, do tend
to overencourage the public so that events of
last week come as an extra shock to them ?

Mr. Katzenhach: Oh, I think the events of
this past week came as something of a shock,
even though nothing that General Westmore-
land has ever said, or anyone else, would have
indicated that there were not many thousand
VC, nor that this was beyond their competence
or capacity. It is veiy difficult, Mr. Fritchey, to
prevent an enemy from taking action if he
chooses to take it despite high casualties, and
particularly take it with suicide squads. Now,
again, what the impact of all this is, I think it
is too early to judge, but I am not discouraged
by it.

Mr. Kalb: Mr. Secretary, you said we are
winning, but could you tell us what we are
winning?

Mr. Katzenhach: Admiral Sharp said that we
were winning, and I said I saw no reason to
disagree. We are in Viet-Nam, as you Imow,
Mr. Kalb, with very limited objectives, to try
to prevent the North Vietnamese from taking
over South Viet-Nam. We are there fighting,
with the South Vietnamese and with our allies.
Our objectives are limited; and all we are try-

273

iiig to "win" — if you want to use that word, it
was not mine — is simply to make our point that
the South Vietnamese people are as entitled
as any people to make their decisions and to live
in a world of their choosing, not a world im-
posed or a country imposed or inile imposed by
somebody else. That's all.

Mr. Kulh: One of the problems, sir, is the
question of cost. And there is a high body comit
this week on the North Vietnamese and the Viet
Cong side. There is also an extremely high body
count on our side. And the question that comes
up is the order of priorities. You said that the
purpose is to simply make the point that the
North Vietnamese will not take over the South.

Mr. Katzenhach: Yes. That is what — •

Mr. Kalb: Is the cost getting to be high?
That is the question.

Mr. Katzenhach: I don't think so, because
the stakes in Viet-Nam are not just South Viet-
Nam. The stakes in Viet-Nam are 250 million
people in Southeast Asia. And the point that
we're making in Viet-Nam, which happens by
an accident of history to be the place where that
point is being made, affects the lives of 250
million other Asians. And I think that is a
point to emphasize and to be remembered. It is
not just peojjle in South Viet-Nam that we are
concerned about; we're concerned about all of
free Asia.

Chinese Communist Aggression

Mr. Agronshy: Is it your feeling, Mr. Under
Secretary, that what we are doing in South
Viet-Nam is containing a possible Chinese
Communist expansion in Southeast Asia?

Mr. Katzenhach: Yes; I tliink it is related to
Chinese Communist expansion. It is also related
to a North Vietnamese expansion, which is
aimed at South Viet-Nam, which is aimed at
Laos, and which I would expect to be aimed
at Cambodia.

Mr. Agronshy: We have constantly said that
we're containing Chinese Commimist aggres-
sion. How would you document that belief?

Mr. Katzenhach : I document that belief with
the kind of insurgency that they're presently
undertaking in Thailand; and I would docu-
ment it in addition by some of their subversive
activities in Burma and by their alliance with
Ho Chi Minh, whose stated objectives are not
simply to take over South Viet-Nam but to do
what he's doing in Laos today and to move on
into Cambodia.

Now, I think there is another point on that.
Our efforts are equally important to the psy-
chology of the area — what the people think
and what they are willing to do. It seems to me
that whatever the intentions or nonintentions
of China may be, that unless the people of
Southeast Asia believe that they have some pro-
tection from a possible Chinese takeover they,
for political reasons or out of fear, are going
to throw in the towel and give up. I think it is
very significant that Asian leaders support our
efforts.

Mr. Fritchey : From time to time our Govern-
ment tells us that we will have to retreat to
California if we don't carry on in Viet-Nam.
But I must say it is clear to me and to many
readers that I hear from — it is not clear to us
who is going to push us out of the Pacific nor
how they are going to do it^considering the
fact that we have all the principal bases in the
Pacific, the largest navy in the world, the great-
est strategic air force in the world, and the most
sophisticated nuclear power, and the fact that
China has none of these things makes it very
difficult, I find, among people I talk to, in lec-
tures and so on, to understand who and how
they are going to chase us out of the Pacific.
Could you comment on that, Mr. Secretary ?

Mr. Katzenhach: I would be concerned if the
250 million people that I talked about went into
Red China's orbit. I don't think it is a question
of our military bases. I think it is a question of
trying to help to build a peace in this world,
and I think a part of building a peace in this
world is to indicate that people can't take over
other countries by arms. I think this is impor-
tant. I don't Imow what the future is going to
bring. I don't have a particularly good crystal
ball. But I think it is going to be a lot safer
future for the whole world, not just for the
United States, if people in Asia are permitted to
make their own decisions and live their own
lives.

Mr. Agronsky: Mr. Under Secretary, what
are our conditions at the moment for stopping
the bombing in Viet-Nam and for conducting
peace negotiations? There is considerable con-
fusion about where we actually stand. For ex-
ample, Mr. [Clark M.] Clifford, who is going
to become the Secretary of Defense, said that
the President's formula for stoppmg the bomb-
ing didn't require North Viet-Nam to hold its
normal supply of men and materiel in South
Viet-Nam. On that same day our Secretary of
State, Mr. Rusk, said "do you really expect us

274

DEPARTMENT OP STATE BULLETIN

.:i

to stop half the vear while the other half goes
on" ^ — whicli seems to contradict. At the same
time the President of South Viet-Nam, Mr.
Thieu, said that the bombing of North Viet-
Nam could be stopped only if the North halted
all of its aggi'ession, raising another contradic-
tion. And the President himself, Mr. Johnson,
said on Thursday, in view of North Viet- Nam's
aggressive actions now he could not possibly
stop the bombing.^ Well, where are we ?

Hanoi's Reaction to Bombing Pause

Mr. Katzenhach: We're right with the Presi-
dent's statement at San Antonio,' that is where
we have been for several months. I don't see
the inconsistencies that you're referring to. Mr.
Clifford did not intend to spell out all of the
terms of the President's formula in a formal
sense. Wliat he said is certainly consistent with
what the President said. The President himself,
in his press conference Friday,^ emphasized
that there was no difference; and there had been
no difference within the administration on this.

I think the President's statement is a very
clear one. We are concerned by what tliey're
doing, what they've done in the cities. We're
concerned with what they have done at Khe
Sanh. And it would seem to me that the matter
of Khe Sanh was quite inconsistent with the
assumption made in the San Antonio formula
because it is all taking place right on the DMZ
[demilitarized zone]. Obviously, what occurs
in the DMZ is an important part of any cessa-
tion of bombing.

Mr. Kalb: Why can't you stop the bombing
of the rest of North Viet-Nam and leave open
the area south of Vinh ?

Mr. Katzenbach: That would be possible but
it doesn't seem to meet Mr. Trinh's conditions,
Mr. Kalb. Foreign Minister [Nguyen Duy]
Trinh says we have to stop the bombing and
all other acts of war. And that is what we are
trying to explore, what he means.

Mr. Kalb: Well, why can't we just try it?
Why can't we see it on a de facto basis rather
than try it in advance —

Mr. Katzenbach: We could. We have —

' In an address before the Cathedral Club at Brook-
lyn, N.Y. on Jan. 2.5.

' For an excerpt from President Johnson's remarks
at a Medal of Honor ceremony on Feb. 1, see Bulletin
of Feb. 19, 1968, p. 226.

' Hid., Oct. 23, 1967, p. 519.

' ma., Feb. 19, 1968, p. 221.

Mr. Fritchey: We could stop for a day or two
and see what happens.

Mr. Katzenbach: If you stop for a day or two,
they regard that as a threat. They talked about
stopping for good. But it seems to me that the
objective is not to find a reason to stop the
bombing, the objective is to get into serious
negotiations for peace. And I think that the
President was as forthcoming at San Antonio
as anybody could possibly be. He says if we
stop our bombing we are going to assume — and
that assumption is a very important one — that
they are not going to take advantage of that
bombing pause.

Mr. Agronshy: Mr. Under Secretary, can I
try to pin down a rather significant report that
has been going around here that I am sure you're
aware of, and that is that twice since August
the United States has been in direct contact with
Hanoi and has told them that we would stop
the bombing, that we did indeed stop the bomb-
ing, to see what result would come from it. Is
that true?

Mr. Katzenbach: We have ways of getting
into communication with Hanoi, and we have
from time to time been in communication with
Hanoi. We have not had any cessation of bomb-
ing in this period. From time to time various
other acts have been taken, but that is not
correct.

Mr. Agronshy: We have not on two occasions
told Hanoi that we would stop the bombing in
order to see what effect it would have?

Mr. Katzenbach: No, not in those terms, Mr.
Agronsky.

Mr. Kalb : Have we at any time since August
actually stopped the bombing and after the
cessation of bombing informed Hanoi that we
are in a bombing pause — what is your response?

Mr. Katzenbach: No.

U.S. Policy Toward Negotiations

Mr. Fritchey: Could we move to peace talk
again ? Last week has pretty well obliterated it,
but I take it we're still interested in negotia-
tions.

Mr. Katzenbach: There is nothing, Mr. Frit-
chey, that President Johnson is more interested
in than peace.

Mr. Fritchey : I find that I myself and many
of my colleagues are not sure that we quite im-
derstand the administration's policy vis-a-vis
peace negotiations. Would it be accurate to say
that the administration has no objection to the

FEBRTTART 26, 1968

275

National Liberation Front participating in its
own right in any possible negotiations; and,
two, that the United States has no objection to
the National Liberation Front participating in
some degree in a coalition government prepa-
ratory to new elections? Would that be a fair
interpretation of our policy? And if it isn't,
would you clarify it for me?

Mr. Katzenhach: Let me see if I can clarify
it, Mr. Fritchey. As far as the first is concerned,
we have repeatedly made it clear that if there
were negotiations, it would be possible for the
NLF to be heard and to have its views made
known in those negotiations.

Mr. Fritchey: I said "in its own right." I
don't know whether you noticed that I put that
in or whether —

Mr. Katzenbach: I noticed that. It seems to
me that how this would be done is a matter
which could be discussed with Hanoi if they
were willing to discuss peace with us. As to the
second point, I think you get catchwords in this
business, and I think "coalition" has become a
sort of a catchword.

Mr. Fritchey: Well, we have to use shorthand
between us a little bit.

Mr. Katzeribach: We've made awfully clear
that we're not going to impose a government on
the South Vietnamese people that is a govern-
ment that they don't want and that they are not
prepared to accept. And we're not interested
in being in Viet-Nam in order to have peace
negotiations which hand the whole business over
to Hanoi, and then we leave. So I think that to
concentrate on coalition is simply to concentrate
on the wrong thing. Now, that the South Viet-
namese have to find a way of living together,
whatever their political views, seems to me
absolutely clear. There are many who are op-
posed and violently opposed to the present
government there in South Viet-Nam. That
problem has to be coped with in one way or
another. But there are a variety of ways to cope
with it, and I don't think it has to be coped with
by some catch phrase like "coalition."

Mr. Agronshy : Mr. Under Secretary, one of
the tilings that creates so much pessimism here
and everywhere about the prospect of ever end-
ing this war is the great concern that the Gov-
ernment of South Viet-Nam will itself never be
able to induce the support, to win the backing
from its own people that is necessary for it to
stand alone, and that we will have to stay there
interminably— forever. Now, our Secretary of
Defense, Mr. [Robert S.] McNamara, who is

not a critic of this administration, made the
observation in his last report to the Senate
Armed Services Committee that: "No matter
how great be" — I quote his language now — "the
resources we commit to the struggle, we cannot
provide the South Vietnamese with the will to
survive as an independent nation, with a sense
of national purpose . . . with the ability and
self-discipline a people must have to govern
themselves." How long do we have to be there
before they demonstrate that ?

Mr. Eatzenhach: I don't know, Mr. Agron-
sky, but I do know that the statement that Sec-
retary McNamara made has been repeatedly
made by South Vietnamese Government officials
themselves. They accept tliis. They have to —

Mr. Agronshy : They accept it, but what do
they do about it ?

Tasks of South Vietnamese Government

Mr. Katzenhach: They don't always do eveiy-
thing that we would like to see. Thiiigs don't
always go as fast as we would like to see them
go. That happens. It even happens within the
United States from time to time. They have
trouble getting tax legislation ; we have trouble
getting tax legislation. It is not an unusual
situation.

But I would say that right now, at this mo-
ment, there is a great opportunity for the South
Vietnamese Government. Immediately follow-
ing all these attacks they have a great oppor-
tunity to move into the situation, to move into
it effectively and efficiently and to take hold.
It was significant that the people did not join
the VC in any large numbers. It is now in-
cumbent on the South Vietnamese Government
to see if they can use tliis opportimity to im-
prove their governmental services as they are
trying to do, to make various reforms that they
want to make and that they ought to make, and
to see if right now they can gain the loyalty of
considerable numbers of the people.

Mr. Ealh: You mean the people did not join
the Viet Cong in this past week, in terms of
this general uprising ?

Mr. Katzenbach: In some instances, some did.
I think a good many people probably remained
silent, even though they knew what the VC was
doing. I can understand that, Mr. Kalb, if you
look at what the VC does to tliem if they don't.

Mr. Kalb: But the point is did the South
Vietnamese people rally to the side of their
Government against all of these outrageous —

276

DEPARTMENT OF STATE BULLETIN

Mr. Katzenhach: No; they didn't rally to the
side of their Government, and they didn't rally
to the side of the VC. They just tried to take
cover, for the most part, and let the military
and the police cope with the situation, as they
are doing.

Mr. Agron-^ky: How will yon ever win a war
there if the Govermnent that we're trying to
establish is not able to win the supjDort of its
people ?

Mr. Katzenhach: I think it is essential that it
win the support of its people. They have now
gone through elections, a Constitution, and so
forth. They haven't had a long time since these
events, but it is absolutely essential that they
win the support of their people and they recog-
nize that just as we do.

Mr. Kalh: Mr. Secretary, you said a little
earlier in the program that the events of the
past week came as somewhat of a shock. In what
way did they come as somewhat of a shock?

Mr. Katzenhach: They came as somewhat of
a shock because there were well-coordinated at-
tacks in many cities. It came as a shock to the
American public — which was what I was refer-
ring to — to suddenly realize that in all these
areas, which have been relatively secure, the VC
had the capacity to do what it did, even though
the situation could be brought back under con-
trol fairly rapidly. I think many people were
surprised and shocked by that. I suspect even
in Viet-Nam people were shocked by that. They
had become adjusted to security within these
cities.

Mr. Kalh: What does that say about our in-
telligence? I thought we were well aware of
this, prepared for it, responded —

Mr. Katzenhach: I think we were aware of
their general plans. I don't think we were
aware, certainly, of the details of their large
coordinated plan. I doubt that very many Viet
Cong were aware of this. It is very hard to pene-
trate a Communist organization to get that kind
of intelligence.

Mr. Agronsky: Implication of your shock
and unawareness is that we didn't know
about it.

Mr. Katzenhach: My reference was to the
American people, and I am sure they didn't
have the intelligence.

Mr. Agronsky: My reference is to the Ameri-
can Army in Viet-Nam. Brigadier General
Philip Davidson, who is the Intelligence Chief
for General Westmoreland, said his office knew
that Communists were planning the offensive,

even had the precise details of the Communist
attack orders in some cases. Now, if we knew
all this, why weren't we ready? Actually, what
happened was that we had in Viet-Nam itself
only half of the South Vietnamese Police. We
only had 300 American Military Police. Wliere
were they if they knew this was going to
happen ?

Mr. Katzenhach: It came during the Tet
period, which is a period that traditionally the
Vietnamese have returned to their home vil-
lages. The Communists took —

Mr. Agronsky: Is that an answer, Mr. Under
Secretary ?

Mr. Ka.tzenhach: It is an explanation, Mr.
Agronsky. You say why weren't they there?
Let me put it in the form of a question : If we
weren't ready for this, why have we been able
to clean it up as fast as we have?

Mr. Agronsky: We haven't cleaned it up.

Mr. KaJh : Is it cleaned up ?

Mr. Katzenhach: It has been cleaned up in
a good many places. If we weren't ready for it
why have 15,000 of them been killed, with rela-
tively light casualties on our side?

Mr. Frltchey : Mr. Secretary —

Mr. Katzenhach : I agree that the Vietnamese
Government was mostly home for Tet. This is
true.

Mr. Frltchey : To seek clarification on another
point, Mr. Secretary: Mr. Clark Clifford, our
new Secretary of Defense, told the Armed Serv-
ices Committee the other day that, in effect, not
to take too seriously our Manila pledge ^ to
withdraw all of our foi'ces from Viet-Nam not
later than 6 months after Hanoi did. And I be-
lieve he used the exact language, saying that our
Manila i:)ledge contained "protective language."
Could you tell us what that language is? Are
there some escape clauses there that we don't
know about or haven't heard about ?

Mr. Katzenhach: No, I think it is entirely
within the Manila communique itself. But there
was a reference — I am trusting my recollection
here — which says "and the level of violence sub-
sides." And I would suspect, although I don't
know, that that was what Mr. Clifford was
referring to.

Mr. Agronsky : Mr. Under Secretary, there is
another question that is of great concern to the
American public, the case of the Na\'y ship, the

^ F'or text of a communique issued on Oct. 2."), 1966,
at the close of the Manila conference, see Ibid., Nov.
14, 1966, p. 730.

FEBRUARY 26, 1968
2S9-925— 68 3

277

Pueblo^ whicli is in the hands of the North
Koreans. Are ^\e any closer to getting that ship
or its men back ? What are we going to do about
it if we can't ?

The Pueblo Situation

Mr. Katzenhach : We have been in communi-
cation at Panmunjom with the Nortli Koreans
seeking to get back that ship and those men.
We have been trying in many channels. "Whether
we will succeed or not, I don't know. Obviouslj',
I am hopeful that we will.

Mr. Agronsky : Do you have any reason to be ?

Mr. Katzeribaeli: I think the fact that talks
are going on is encouraging in and of itself.
It doesn't guarantee the results, and I don't
want to hold out any false hopes that these
people will be returned quickly. I vei-y much
hope that they will.

Mr. Kalh: Mr. Secretary, Secretary Rusk
said, on the Thursday of the week that the ship
was captured, that he demanded the immediate
return and said the situation was "intoler-
able." "^ It is almost 2 weeks since the capture of
the ship. Is this open ended ? Can we wait for-
ever before taking action?

Mr. Katzenhach: I don't know what action
you have in mind our taking, Mr. Kalb, but
I think—

Mr. Kalh : People make reference to military.
■ Mr. Katzenhach: I think we should keei>
our eye on our objective of getting that crew
and that boat back and pursue every peaceful
channel for doing so.

Mr. Agronsky: And we do reject military
action and are going to concentrate entirely on
diplomacy ?

Mr. Katzenhach: I don't close any options.
That is something that obviously is a matter

'Ihhl., Feb. 12, 1968, p. 192.

for President Johnson. I do say that he has and
he will continue to pursue peaceful paths of
recovering that crew and that vessel.

Mr. Agronsky: Mr. Under Secretary, we
thank you very much for being here with us to
"Face the Nation." I am sorry we have ran out
of time.

U.S. ReafRrms Support
of Nigerian Government

In respoivie to recent press articles suggest-
ing the involvement of a feio private A7nerican
citizens in the fying of arms and other sup-
plies to the rehel '■'■BiafrarC regime, the Depart-
ment spokesman read the following statement
to neios correspondents on February 5.

We've been concerned with a number of in-
sinuations recently alleging United States sup-
port of the "Biafra" regime. I wish to make
very clear that the United States continues to
recognize the Federal Military Government as
the only legal government in Nigeria. We do
not recognize "Biafra" nor, so far as we know,
does any other government in the world. We
have, from the outset of the Nigerian crisis,
regarded it as an internal conflict which, in the
last analysis, only the Nigerians themselves can
resolve. At the same time, we had hoped that
the conflict would yield a peaceful solution
which would spare all Nigerians from further
tragic loss of life. The private actions of a few
American citizens over which we have no con-
trol should in no way be construed as an in-
dication of United States Goverimient sup-
port for an unrecognized regime.

The United States Government has in no way
encouraged, supjDorted, or otherwise been in-
volved in this rebellion.

278

DEPARTMENT OF STATE BULLETIN

Problems and Programs in Our International Economic Affairs

ECONOMIC REPORT OF THE PRESIDENT AND ANNUAL REPORT OF THE COUNCIL
OF ECONOMIC ADVISERS (EXCERPTS)

Folloxcmg are excerpU frovi the Economic
Report of the President {pages 3-28) , together
with the portion of the Annual Report of the
Council of Economic Advisers which deals with
the inteimational economy {chapter 5, pages
1 63-194). "■

ECONOMIC REPORT OF THE PRESIDENT

To the Congress of the United States :

Most Americans see the economy in tenns of
a particular job or farm or business. Yet the
welfare of each of us depends significantly on
the state of the economy as a whole.

It was never more necessary for all Americans
to try to see the whole economy in perspective —
to realize its achievements, to recognize its
problems, to understand what must be done to
develop its full potential for good. For, as a
people, we face some important choices.

A Time for Decisioxs

Seldom can any single choice make or break
an economy as strong and healthy as ours. But
the series of interrelated decisions we face will
affect our economy and that of the whole free
world for years to come.

We face these hard decisions with a confi-
dence born of success. Our economy has never
been stronger and more vigorous than during
the 1960's.

Our achievements demonstrate that we can

^Economic Report of the President Transmitted to
the Coiifiress Fehruary 1!)(I8, Together With the Annual
Report of the Council of Economic Advisers (U. Doc
i;38, 90th Con?.. 2(1 sess. ; transmitted on Feb. 1), for
sale by the Superintendent of Documents, U.S. Govern-
ment Printing Office, Washington, D.C. 20402 ($1.25).

manage our economic affairs wisely — that we
can make sound choices.

If we now choose responsibly, we can look
forward — at home — to more years of healthy
prosperity, and of social and economic progress.

If we choose responsibly, and our friends
abroad cooperate responsibly, we and they can
look forward in confidence to the continuing
smooth and rapid expansion of the mutually
rewarding international exchange of goods and
services.

But if we temporize — try to avoid the hard
choices before us — we will soon discover that
we have even more difficult choices to make. In
six months or a year, we could find our prices
and interest rates rising far too fast. In a few
months we and our friends abroad could face
new uncertaintj' and turbulence in international
financial affairs.

If we wait for the problems to become acute
and obvious, then everyone will be ready to act.
By then, the tasks could well be much harder.

In the coming weeks and months we must
choose

— whether Ave will conduct our fiscal affairs
sensibly ; or whether we will allow a clearly ex-
cessive budgetary deficit to go uncorrected by-
failing to raise taxes, and thereby risk a feverish
boom that could generate an unacceptable ac-
celeration of price increases, a possible financial
crisis, and perhaps ultimately a recession ;

— whether as businessmen and workers we
will behave prudently in setting prices and
wages; or whether we will risk an intensified
wage-price spiral that would threaten our trade
surplus and the stability of our economy for
years to come;

— whether we will act firmly and wisely to
control our balance-of -payments deficit; or

FEBRTTART 26, 1968

279

whether we will risk a breakdown in the finan-
cial system that has underpinned world pros-
perity, a possible reversion toward economic
isolationism, and a spiraling slowdown in world
economic expansion ;

— whether we will move constructively to deal
with the urgent problems of our cities and
compassionately to bring hope to our disad-
vantaged; or whether we are willing to risk
irreversible urban deterioration and social
explosion.

I know that Americans can face up to the
tasks before us — that we can run our economic
affairs responsibly. I am confident that we wiU
take timely action to maintain the health and
strength of our economy and our society in the
months and years ahead.

The Eecord and Problems of Prosperity

The year 1967 was one of uncertainties and
difficulties both in our external and our internal
economic affairs. Yet there were reasons for con-
fidence as well as concern, both internationally
and domestically.

ventive action. It was taken on January 1. The
substance of our measures, plans, and priorities
is discussed later in this Report.

But 1067 saw progi-ess as well as problems on
the international front. For it also brought the
culmination of two giant forward stejis in world
international economic affairs, both long in
gestation :

• In June, the Kennedy Eound of negotia-
tions produced agreement on the single most
significant multilateral reduction in world trade
barriers in history. It promises further to stimu-
late the expansion of international trade, al-
ready a major source of postwar economic
growth throughout the world.

• In September, the member nations of the
IMF [International Monetary Fund] reached
agreement on plans to create by deliberate co-
operative action a new form of world reserves,
supplementing gold and the dollar." Once this
plan comes into full operation, the vulnerability
of the present system to speculation should
gradually fade away, and so should any threat
of a possible future strangulation of the growth
of world trade and production.

1967-A Year of External Problems and Promise

The U.S. balance-of-payments deficit — a
chronic problem since 1957 — worsened in 1967
after several years of substantial improvement.
In important measure this deterioration re-
flected the fears and uncertainties surrounding
the devaluation of the British pound in
November.

The same uncertainties also fed a massive
wave of private speculation against gold late in
the year. This subsided only after the United
States and other countries in the "gold pool"
demonstrated their determination — backed by
the use of their monetary resen-es — not to allow
a change in the price of gold.

In the absence of strong new action by the
United States — and by the surplus countries of
Western Europe — there was danger that the
deterioration of the U.S. payments balance and
speculation against gold and currencies might
feed upon and reinforce one another in a way
that could touch off an international financial
crisis in 1968.

Even if the dangers were remote, the grave
consequences of such a crisis for the world
economy demanded bold and immediate pre-

Problems and Programs in Our
International Economic Affairs

The U.S. Balance-of-Payments Deficit

On January 1, 1 announced the main elements
of our new balance-of-payments program for
1968.' That program deals decisively with the
threat to the dollar that developed in 1967.

Nature of the Prdblem.

It is important to be clear about the nature
of our balance-of-payments problem. The
United States has a sizable surplus of exports
of goods and services over imports. Our past
overseas investments brmg in excellent and
growing earnings, and our new overseas invest-
ments are running at a very high level. There
is a small but growing reverse flow of foreign
investment here.

We have heavj^ military expenditures over-
seas, wliich are not fully offset by our allies; and
our aid program still accounts for a small out-
flow of dollars.

" For background, see Bulletin of Oct. 23, 1967, p.
23.
' Ibid., Jau. 22, 196S, p. 110.

280

DEPARTMENT OF STATE BULLETIN

Our export sales, our investment return, and
the inflow of investment from abroad are not
large enough to finance our imports, our new
investments abroad, and our net Government
ovei-seas expenditures.

The difference — the deficit — is financed partly
by sales of gold and pai-fly by increased foreign
holdings of short-term dollar investments by
foreign businesses, banks, individuals, and
govermnents.

The position of the United States in its inter-
national economic affairs is thus much like that
of a wealth}' and prosperous businessman whose
liquidity has come under strain.

His commercial operations remain highly suc-
cessful, with the value of his sales well in excess
of his costs.

His large long-term investments in other
enterprises are yielding an excellent return, and
he sees an abundance of further opportunities
for profitable investments that will bring large
fiiture returns.

Both his income and his net worth are grow-
ing strongly every year. And he does not hesi-
tate to spend freely on the good things of life,
vrhile also making large gifts to worthy causes.

But he has been borrowing extensively at
short term to help finance his long-term invest-
ments. Each year, he adds more to his short-
term debts than to his liquid assets. It is in this
sense — but only this — that he has an annual
deficit. It is a liquidity deficit. It is not a deficit
in his profit and loss account, nor an overspend-
ing of his income.

Some of his short-term creditoi-s — although
not really doubting the strong excess of his
assets over his liabilities — are nevertheless get-
ting a bit concerned about continuing to ex-
pand— or even to renew^ — their short-term
credits.

Should some of them refuse to renew their
loans, his situation could become awkward.
Other creditors might become nervous and
would rush to present their claims. Financial
pressures would extend to other, smaller busi-
nessmen with whom he had strong commercial
ties, and whose basic positions were less sound.

That man — like the United States — needs to
pull back for a while to strengthen his liquidity.

He will want to cut costs and increase sales
in his commercial operations.

He will have to pass up for a while many of
his attractive opportunities for profitable long-
term investments.

He will need to re\dew the terms of his spend-

ing and gifts — to ease their impact on his cash
position.

Most of all, he wants no doubt to arise about
his ability to meet his debts as they come due.
He would easily survive a financial crisis with
no major impairment of his income or net worth.
But some other businessmen who bought from
or sold to him could easily be dragged into
bankruptcy.

Reducing the Deficit

Since 1961, the United States has been making
a determined effort to reduce its liquidity deficit.
Through 1965, steady progress had been made.

In 1966 the deficit held even, in spite of the
rising overseas costs of Vietnam. But the deficit
increased in 1967 — particularly sharply in the
fourth quarter — reversing that progress. The
instability generated by devaluation of the Brit-
ish pound was responsible for a significant part
of the deterioration, but not for all of it.

• Overseas defense costs rose despite tight
controls on spending.

• The net balance of tourist expenditures
shifted further against the United States.

• Private U.S. capital outflows rose, even
though direct investment was held in check by
the voluntary progi-am ; and foreign capital in-
flows decreased.

• Our trade balance failed to improve as
much as we expected, mainly because of the
economic slowdown in Europe.

Some of the steps we might consider to reduce
our payments abroad — such as reverting to high
tariffs or quotas — would reverse long-term
policies and, by provoking retaliation, reduce
our receipts by as much as or more than our
payments. And many of the other things we
could do would seriously and irresponsibly
harm our domestic economy, friendly countries
overseas, or the flow of world trade.

Program for 1968

We have a clear duty to act. And we are
taking action — as constructively and respon-
sibly as we can.

Domestic Economic Policies

The avoidance of excessive demand in our
economy is crucial to the strength of the dollar
as well as to our domestic prosperity.

If we place too much pressure on our re-
sources, U.S. buyers will turn abroad for sup-

FEBRUARY 26, 1968

281

plies and our imports will soar. And if our
prices rise, we will weaken our export competi-
tiveness and attract even more imports — not
just immediately, but for years to come.

That is why the first order of business in de-
fense of the dollar is to pass the tax bill.

We must also exert every effort to avoid the
possible destructive effects on our trade surplus
of strikes or the threat of strikes in key indus-
tries. I urge business and labor to cooperate with
the Secretaries of Labor and Commerce in deal-
ing with this danger to our export surplus.

Direct Balance-of -Payments Measures

In addition to assuring the health of our
economy at home, we must act directly on the
key international flows that contribute to our
deficit. Our direct balance-of-payments meas-
ures are designed to move us strongly toward
equilibrium — this year. Some measures are tem-
porary and will be removed as soon as condi-
tions permit. Others are designed for longer
range needs. Several will require congressional
action.

We have already put into effect

— a new mandatoi-y program to restrain di-
rect investment abroad, which will reduce out-
flows by at least $1 billion from 1967.

— a tighter Federal Eeserve program to
restrain foreign lending by U.S. banks and
other financial institutions, to achieve an inflow
of at least $500 million.

We have begun action to save $500 million on
Government expenditures overseas. Negotia-
tions are already underway to minimize the for-
eign exchange costs of our essential security
commitments abroad. Orders have already been
issued to cut the number of civilian jsersonnel
abroad.

We are organizing major efforts to encourage
foreign investment and travel in the United
States.

I aimounced on January 1 that the Secretary
of the Treasury would explore with the Con-
gress legislative measures to help us achieve our
objective of reducing our travel deficit abroad
by $500 million this year. Those explorations are
proceeding.

In the meantime, I again ask the American
people to defer for the next two years all non-
essential travel outside the Western Hemi-
sphere.

I also announced on January 1

— that we were initiating discussions with our
friends abroad on ways to minimize the disad-
vantages to our trade from various nontariff
barriers and national tax systems abroad; and

— that we were preparing legislation in this
area whose scoj^e and nature would depend on
the outcome of these consultations.

The consultations have been in progress since
January 1. When they are completed, I will an-
nounce their outcome, and indicate what if any
legislation we shall seek.

I am asking the Congress for the funds neces-
sary to support long-term measures to stimulate
exports, by

— intensifying promotion of American goods
overseas; and

— expanding and strengthening the role of
the Export-Import Bank.

Eespo7isibilities of Surplus Countries

As we fulfill our responsibilities, other na-
tions have an equal obligation to act. The bal-
ance-of-payments surpluses of our trading part-
ners in continental Europe are essentially the
mirror image of our deficit. Their constructive
adjustments, as well as our own, can contribute
to remedying our mutual imbalance.

For them, as for us, action at home heads the
list. The nations of continental Europe should
use their fiscal and monetary policies to pursue
steady expansion of their domestic economies.
Indeed, if they were to tighten credit and budg-
ets in order to protect their surpluses, then we
could not succeed in our efforts to come into
equilibrium in a healthy world economy. Even
worse, a competitive slowdown in world eco-
nomic expansion could ensue, to the detriment
of all peoples everywhere.

Surplus countries can also contribute to a
smooth process of adjustment by reducing their
barriers to trade, by increasing their economic
assistance to developing countries, by expand-
ing their capital markets to finance their own
investment, by permitting wider access to these
capital markets by other nations, and by meet-
ing their full share of the foreign-exchange
costs of our collective defense effort.

The world tried competitive beggar-my-
neighbor policies in the 1930's and they ended
in chaos. The surplus countries liave the obliga-
tion to assure that this does not happen again.

282

DEPARTMENT OF STATE BUTXETIN

The Dollar and the international Monetary System

The interests of major nations are also linked
together in the international monetary system.
For us, there is a special responsibility, since
the dollar is a world currency

— widely used by businesses abroad,
— held along with gold as a reserve asset by
foreign central banks.

Our deficits in the past decade have sent more
dollars abroad than businesses there needed to
acquire, or than governments have wanted to
hold as reserves. Many of these dollars were
used to purchase gold from the United States.

Speculation generated by the strains on the
international monetary system has caused fur-
ther drains of gold from international re-
serves— much of it from our own.

As a result, U.S. gold resei-ves have declined
to about $12 billion. This is still ample to cope
with foreseeable demands on our gold stock. But
persistent large U.S. deficits would threaten
the entire international monetary system.

Our commitment to maintain dollar converti-
bility into gold at $35 an ounce is firm and clear.
We will not be a party to raising its price. The
dollar will continue to be kept as good as or
better than gold.

Freeing Our Gold Reserves

I am therefore asking the Congress to take
prompt action to free our gold reserves so that
they can unequivocally fulfill their true pur-
pose— to insure the international convertibility
of the dollar into gold at $35 per ounce.

• The gold reserve requirement against Fed-
eral Eeserve notes is not needed to tell us what
prudent monetary policy should be — that myth
was destroyed long ago.

• It is not needed to give value to the dollar —
that value derives from our productive
economy.

• The reserve requirement does make some
foreigners question whether all of our gold is
really available to guarantee our commitment
to sell gold at the $35 price. Removing the re-
quirement will prove to them that we mean what
we say.

I ask speedy action from the Congress —
because it will demonstrate to the world the
determination of America to meet its interna-
tional economic obligations.

Special Drawing Rights

Tlu-ough U.S. deficits the dollar has been the
major element of the recent growth of inter-
national reserves.

As we move into balance, the world can no
longer look to the dollar for major future addi-
tions to reserves.

Neither can it depend on gold. Gold produc-
tion has been leveling off in the face of rising in-
dustrial use and a steady drain into private
hoards. Wliat is needed is a resei-ve asset univer-
sally acceptable as a supplement to gold and dol-
lars, that can be created in the amount needed
to meet the desired expansion of world reserves.

The Special Drawing Rights plan agreed on
in Rio de Janeiro last September provides such
an asset. This plan will fundamentally strength-
en— and ultimately transform — the interna-
tional monetary system in the years ahead.

The agreement should be promptly ratified
and swiftly activated on an adequate scale. I
will call upon the Congress to approve U.S.
participation.

Trade

The Kennedy Round was completed on June
30, the most successful multilateral agreement
on tariff reduction ever negotiated. Four years
of hard negotiating were required — but the ulti-
mate success was worth it. A fair bargain was
struck. Our farmers and businessmen will get
major benefits as new markets are opened to
them.

We will continue to work with our trading
partners — in the GATT [General Agreement
on Tariffs and Trade] and in other bodies — to
find new approaches to the liberalization of
world trade, with urgent consideration given to
nontariff barriers.

Some would throw away the gains from three
decades of liberal trade policy, retreating into
shortsighted protectionism. Mandatoiy quotas
on American imports would meet prompt retal-
iation abroad. All Americans would pay a high
price for the benefit of a few.

Protectionism is no answer to our balance-of-
payments problem. Its solution depends on ex-
panding world trade.

The Government stands ready to help the few
that may be hurt by rising imports — but in
ways that expand trade, strengthen our econ-
omy, and improve our international relations.

FEBRTJAKT 26, 1968

283

Accordingly, I will shortly send to the Con-
gress legislation which will

—provide an extension of unused tariff-re-
ducing authority ; 4. „„;c.f
—liberalize the criteria for adjustment assist-
ance to firms and workers ; and _

—eliminate the American sellmg price system
of customs valuation.

Durincr the year ahead, opportunities may
develop to expand peaceful trade with the coun-
tries of Eastern Europe and the Soviet Union.
I again urge the Congress to provide the nec-
essary authority for us to pursue such oppor-
tunities should they develop.

The United States has been discussing with
other industrial countries a system of tempo-
rary generalized tariff preferences by all devel-
oped countries for all deA^fl^l^i^lg, «•"/;; "!f-
A^^reement was reached in the OECD [Orga-
nization for Economic Cooperation and Devel-
opment] on the general principles of such a sys-
tem It will be presented to the developing
countries at the UNCTAD [United Nations
Conference on Trade and Development] meet-
ing in New Delhi. . , ,, ,

We shall continue to consult with Members
of Congress and representatives of American
industry, agriculture, and labor as these discus-
sions proceed.

Aid to Developing Countries

If economic progress were now to slow down
in the developing countries that make up two-
thirds of the free world— in the arc of Asia
from Turkey to Korea, in Latin America, and
in Africa— our hopes for a peaceful world
would be menaced. In 1968 this means that we
should

—approve a prudent AID [Agency for In-
ternational Development] progi-am;

—quickly agree with other donor countries
on a substantially increased replenishment of
funds for the International Development As-
sociation ;

—extend the Food for Freedom Act ;
—authorize the United States to share with
other donors in establishing the Special Funds
of the Asian Development Bank.

Several less-developed countries have made
great strides in the promotion of family plan-
ning. We must be prepared to assist their efforts

if the grim race between food supplies and pop-
ulation is to be won decisively.

We can do these things— as in conscience we
must— without detriment to our international
payments. AID has already made great prog-
ress in reducing the impact of its program on
the U S. balance of payments. In 1968 that im-
pact would be reduced by another $100 million,
so that less than 8 percent of AID's dollar ex-
penditures will be for non-U.S. goods and
seivices.

Conclusion

A strong and sustained advance of production
surely does not mean we have solved all eco-
nomic problems— much less that the Nation is
making satisfactory progress toward its broader
and more fundamental goals.

Americans know how to create an expanding
abundance. But we are still learning how to
use it wisely and compassionately to further
the self-development and happiness of men,
women, and children.

Similarly, merely to achieve a balance m our
international payments would not assure that
our international economic relations amply
serve the interests of this Nation and of world
progress. We could bring our balance of pay-
ments into equilibrium by means which would
weaken our domestic economy, forfeit our for-
eign policy objectives, or impair the vitality of
world economic development.

This Administration will never forget that
the purpose of our economy and of our economic
policies is to serve the American people— not
the reverse.

Yet this recognition would not justify poli-
cies which ignore the dangers of inflation, ^o-
nomic distortions, and ultimately recession. For
these are equally enemies of our public purposes.
Nor will we forget that balance-of-payments
policies should serve the Nation's basic goals
abroad and at home— not the reverse.

Yet this recognition makes it no less necessary
to deal firmly and decisively with our balance-
of-payments problem. For a breakdown of the
international financial system would bring m-
calculable harm not only to ourselves and free
peoples around the world, but even to world
peace and progress.

I am determined that our economic^ policies
in 1968 will be pnident as well as creative; safe

284

DEPARTMENT OF STATE BULLETIN

as well as ambitious; responsible as well as
compassionate.

Tlie American people are giving their sons
and brothers to fight for freedom abi-oad. At
home we must support their sacrifice by pre-
serving a sound economy. I believe that the
American people will accei>t the cost of doing
that

— by paying an extra cent of each dollar of
income in taxes,

— by accepting the cutback of lower-priority
Federal programs, and

— by limiting the expansion of Federal spend-
ing to a few areas of the most vital priority.

Today the war in Vietnam is costing us 3
percent of our total production. That is a burden
a wealthy people can bear. It represents less
than one year's growth in our total output.

But one day peace will return. If we plan
wisely — as the committee on post- Vietnam ad-
justment I announced in my Economic Report
last year has been doing — and act boldly, we
will have that 3 jiercent of output to add —
over a year or two — to our normal 4 percent
a year of economic gi'owth.

If we preserve a healthy economy in the
meantime, we will be prepared when our sons
and brothers return to take full advantage of
that bonus.

Our obligation to them demands that we do
no less.

Lyitogn B. Johnson

February 1, 1968.

REPORT OF COUNCIL OF ECONOMIC ADVISERS

CHAPTER 5— THE INTERNATIONAL ECONOMY

The events of 1967 dramatized the importance of
economic developments around the world to the prog-
ress and health of the U.S. economy. They also demon-
strated both the need for international cooperation and
the possibilities for achieving it. After highlighting the
major developments of 1967, this chapter reviews the
principles of balance-of-payments adjustment, surveys
the U.S. balance-of-payments situation and policies in
the light of these principles, and discusses problems
and progress in the international monetary system and
in the trading relations of the United States with both
developed and developing nations.

A YEAR OF MAJOR DEVELOPMENTS

Developments during 1967 left a lasting imprint on
the international economy. The headlines in the closing
months of the year recorded the strains on the inter-

national monetary system generated by the sterling
crisis and the subsequent devaluation of the pound.
Anxieties and speculation in world financial markets
contributed to a sharp widening of the U.S. deficit in
the fourth quarter. The U.S. Government responded
decisively with a major program to move our balance
of payments strongly toward equilibrium.

Events earlier in 1967 paved the way for strengthen-
ing the future expansion of trade and the foundation
of the international monetary system. The completion
of the Kennedy Round negotiations marked the most
successful effort toward reducing tariffs ever conducted
under the aegis of the General Agreement on Tariffs
and Trade (GATT). A major step was also taken
toward the creation of a new form of international
liquidity as the Special Drawing Rights (SDR) plan
was agreed upon at the annual meeting of the Inter-
national Monetary Fund (IMF).

Participating countries in the tariff negotiations
displayed the enlightened statesmanship required to
overcome particular interests for the greater general
welfare of their own citizens and those of less-developed
countries, which were not required to reciprocate in
full. The same spirit ruled in the negotiations on
liquidity, where substantial differences were resolved
in the interest of international monetary progress.

During the difficult period preceding and following
sterling devaluation, international consultations were
conducted in the best postwar tradition ; they permitted
Britain to devalue without similar actions by major
competing countries which could have denied her the
intended and needed benefits of the move. When nerv-
ousness and speculation threatened to disrupt world
finance, the central banks of most major industrial
countries expressed their determination and pledged
their resources to defend the stability of the world
monetary system.

The United States and other countries will continue
to work cooperatively toward strengthening the foun-
dation of world finance and expanding the network of
international trade. There is a long agenda of unsolved
and urgent problems. Payments adjustment still chal-
lenges the best efforts of all countries. The United
States must Insure the effectiveness of its balance-of-
payments program and the proper management of its
domestic economy. Meanwhile, countries with balance-
of-payments surpluses have obligations and responsi-
bilities to insure that they too move toward balance.
All member countries of the IMF are called on to
render promptly a clear verdict in favor of the creation
of supplemental liquidity through the new Special
Drawing Rights plan — as an unmistakable alternative
to a shortage of reserves or to pressures on the price
of gold. The year 1968 will be a period of testing for
international financial cooperation, but it will also be
a time of opportunity.

ADJUSTMENT PROCESS

Countries draw on international reserves, mostly In
gold and U.S. dollars, to meet balance-of-payments
needs when their payments to foreigners exceed their
receipts. A country's reserve position is weakened when
it incurs such deficits. On the other hand, its reserves
will increase with balance-of-payments surpluses. Thus,
reserves change hands as countries have payments
imbalances.

FEBRUARY 26, 1968

285

Apart from the flow of gold to private holders, a
deficit on the part of any country tends to have a coun-
terpart in surpluses elsewhere in the world. Thus a
loss of reserves by the United States is usually a gain
for another nation ; and an increase in our liabilities to
official dollar-holders represents a gain in dollar re-
serves by some other nation. During the past decade,
while the U.S. accounts have been per.sistently in defi-
cit, many countries have had surpluses from time to
time. But the European Economic Community (EEC)
alone has had persistent surpluses of the same order
of magnitude as U.S. deficits.

Mutual Responsibilities

While moderate and clearly temporary deficits or
surpluses need not cause concern, large and prolonged
payments imbalances are normally undesirable for the
proper functioning of the international monetary sys-
tem. Unilateral actions by deficit countries, if forceful
enough, generally can succeed in moving such countries
toward balance. But the payments pattern that results
from unilateral action may not always be compatible
with the broad economic objectives that all nations
hold — such as high employment, sustained worldwide
economic growth, a high degree of freedom of inter-
national trade and capital movements, and an adequate
flow of capital to the less-developed countries.

Indeed, imless special precautions are taken to pre-
vent such an outcome, much of the burden of corrective
measures by any one deficit country could fall on coun-
tries that are already in weak payments positions,
causing such countries to suffer unnecessarily and mak-
ing it doubtful whether the new payments pattern could
be long sustained. And there is also a danger that
unilateral actions, such as tight monetary policy or
restrictive budget measures, could impart a general
deflationary bias to the world economy. Likewise, if
corrective action is limited to surplus countries, it
could in some cases add unduly to inflationary
pressures.

In the light of such considerations, it is now gener-
ally recognized that the interest of all countries can
best be served if payment-s adjustment is brought about
through cooperative efforts by both deficit and surplus
countries. Both types of countries bear major respon-
sibility for such adjustments; both must .seek to In-
sure that their actions are mutually compatible and
consistent with the broader aims that they share.

Principles of Adjustment

The particular policies and combinations of policy
instruments that countries should appropriately use to
achieve adjustment were outlined in the Report on
the Adjustment Process by Working Party 3 of the
Organization for Economic Cooperation and Develop-
ment (OECD). The findings were described in the
Council's 1967 Report. These policies vary, depending
on the circumstances and the particular characteristics
of the countries involved. There is no question, how-
ever, that deficit countries must seek to avoid excessive
internal demand for balanee-of-payments as well as
domestic reasons. Surplus countries, similarly, have a
special responsibility to maintain an adequate pace of
domestic economic expansion. The Adjustment Process

286

Report stresses, moreover, that fiscal policy needs to
be given a major role in the achievement of domestic
economic balance, and that there is a special need to
avoid inappropriately high levels of interest rates.

There are many situations in which the choice of
policies is especially difficult, because measures taken
to satisfy domestic goals may run counter to inter-
national objectives, or vice ver.sa. In such cases it may
be necessary to employ new types and combinations of
policy instruments. In particular, countries whose com-
petitive position and domestic demand levels are satis-
factory may have deficits due to excessive capital out-
flows. Such countries may find it necessary to use
selective measures to limit these outflows. As the Ad-
justment Process Report indicated, however, "Wher-
ever possible, it is desirable that adjustment should

Table 26.— United Statu balance of payments, 1961-67
[BlUioiis of doUarsl

1967,

first

Type of transaction

1961

1962

1963

1964

1965

1966

3

quar-
ters'

Balance on goods and

services _

6.5

5.0

6.9

8.6

6.9

5.1

6.4

Balance on mer-

chandise trade

6.4

4.4

5.1

6.7

4.8

3.7

4.3

Military expendi-

tures, net 2

-2.6

-2.4

-2.3

-2.1

-2.1

-2.8

-3.1

Balance on other

services

2.6

3.1

3.1

3.9

4.2

4.3

4.1

Eemlttances and

pensions

-.7

-.8

-.9

-.9

-1.0

-1.0

-1.4

Government grants and

capital, net

-2.8

-3.0

-3.6

-3.6

-3.4

-3.4

-4.2

U.S. private capital, net..

-4.2

-3.4

-4.6

-6.8

-3.7

-4.2

-5.1

Foreign nonliquld

capital, net

.7

1.0

.7

.7

.3

2.5

3.9

Errors and omissions

-.9

-1.1

-.3

-.9

-.4

-.3

-.9

Balance on Liquidity

Basis

-2.4

-2.2

-2.7

-2.8

-1.3

-1.4

-2.3

Plus; Foreign private

liquid capital, net '

1.0

-.2

.6

1.6

.1

2.4

*.9

Less: Increases in non-

liquid llabUlties to

foreign monetary

authorities "

.3

(«)

.3

.1

.8

« 1.4

Balance on Officlal

Reserve Transac-

tions Basis

-1.3

-2.7

-2.0

-1.6

-1.3

.2

-2.9

Gold (decrease -|-) . . .

.9

.9

.6

.1

1.7

.6

'.2

Convertible ciuren-

cles (decrease +)..-

-.1

(•)

-.1

-.2

-.3

-.5

'.2

IMF gold tranche

position (de-

crease +)

-.1

.6

(')

.3

-.1

.6

(4 6)

Foreign monetary

official claims

(Increase -f-)

.7

1.2

1.7

1.4

.1

-.8

2.6

1 Average of the first 3 quarters at seasonally adjusted annual rates,
except as noted.

' Military expenditures less transfers under military sales contracts.

' Includes changes in Treasury liabilities to certain foreign military
agencies during 1961-62 and to International nonmonetary institutions.

* Average of the first 3 quarters on an unadjusted annual rate basis.

* Included above under foreign nonliquid capital.
" Less than $50 million.

Note.— Detail will not necessarily add to totals because of rounding.

Source: Department of Commerce.

DEPARTaiENT OP STATE BULLETIN

take place through the relaxation of controls and re-
straints over international trade and capital move-
ments by surplus countries, rather than by the
imposition of new restraints by deficit countries."

The next section outlines the major actions which
the United States has taken to move its payments
position decisively toward equilibrium. A numl)er of
these actions are clearly of a temporary nature. While
they have been designed to hold the possible damage
to individual nations to a minimum, there was no choice
but to move, in part, in ways that are restrictive and
thus not fully compatible with the long-run aims of
expansion and etEeiency of the world economy. Achieve-
ment of a viable payments adjustment consistent with
these goals must in part be based on the positive ele-
ment of the U.S. program, which aims at a strengthen-
ing of the U.S. economic position through appropriate
fiscal, monetary, and incomes policies. But it must
al.so rest on more decisive actions by surplus coun-
tries— and particularly those in the EEC : to assure
adequate economic expansion ; to encourage capital
outflows and increased aid to less-developed countries ;
to reduce barriers to trade ; and to share more fully
in the cost of the common defense.

THE U.S. BALANCE OF PAYMENTS

U.S. Balance of Infemafional Payments

BIUtONS OF DOIURS

40

30

EXPOmi AHO UPORn OF COOK AKU SERVICES

EXPORTU

20>-
0^

J 2

1959

1961

1963

10

KErCAPlIAl.FL0»5

U S, PRIVATE -
I I I I I

Current policies of the United States are designed
to fulfill our responsibilities in the adjustment process
and to the stability of the international monetary
system.

The American dollar is the major reserve as.set, other
than gold, of world central banks; and it is the major
transaction currency of international business and fi-
nance. The ability of the United States to carry out
its responsibilities as the major world bank depends
on the strength of its reserve position, which has been
slowly diminished by continuing large deficits.

These balance-of-payments deficits arise when the
sum of U.S. expenditures abroad on imports, travel,
foreign securities and loans, direct investment, and
other items exceeds the inflow of such payments by
foreigners.

The U.S. balance-of-payment deficit records the
change in our reserve position, measured as the sum
of (a) losses in our reserves, and (b) increases in
selected dollar claims of foreigners. The balance is
statistically measured by two alternative concepts,
which differ in their treatment of foreign claims. The
liquidity deficit counts increases in the liquid claims
on the United States of all foreigners — private and
public — as well as losses in reserves. The official set-
tlements deficit counts increases in all claims of foreign
official monetary authoritie.s — but not in private hold-
ings of dollars — in addition to reserve loi^^ses.

Many of the transactions which contribute to the
deficit involve the acquisition of productive foreign
assets. The Nation does not lose wealth by such trans-
actions, but it does .sacrifice liquidity — much like an
individual drawing down his bank account to buy
promising growth stocks. A nation which holds its in-
ternational a.ssets primarily in liquid form loses op-
portunities for productive investment. On the other
hand, every nation— particularly the one that serves
as the world's bank — needs an adequate margin of
liquidity.

70

OFFICIAL RESERVE TRANSACTIONS BASIS

—•*"*" . — - — S

UQUIDin BASIS

195?

1961

1963

1965

1967J/

.WhRST 3 QUARTERS AT SEASONALLY ADJUSTED AHMUAL RATES,
^'EXCLUDING OFFICIAL RESERVE TRAHSAUIONS.
.JtXaUDINC LIOUID CAPITAL.
SOURCE; DEPARTMENT OF COMMERCE,

The Recent Record

The United States has had a balance-of-payments
deficit almost continually since 1950. During the early
part of that period, the entire U.S. deficit was beneficial
to the rest of the world because it helped replenish the
depleted reserves of other countries ; and it could be
tolerated by the United States because we had started
the postwar era in an extremely strong reserve position.

Beginning in 1958-59, the situation changed. The U.S.
deficit increased, while the acute shortage of dollars
abroad was ea.sing. From 1960 to 1965, the deficit was
reduced progressively (Table 26 and Chart 14). But
a deficit continued. The improvement came from auto-
matic adjustment forces, and from judicious use of
policy measures. New measures were required from
time to time as fundamental factors changed. Foreign
demands on our capital markets burgeoned with the
return of currency convertibility in Europe. Trade and
direct investment flows were influenced by the creation
of the EEC and the European Free Trade As.sociation
(EFTA).

The improvement in the U.S. balance of payments
was arrested in 1966 by the greatly increased foreign
exchange costs of the Vietnam war, and indirectly
through the strains placed on our domestic economy.

FEBRUARY 2 6, 1968

287

However, the impact on the payments position was
larJeK off^^et by he inflow of interest-sensitive funds
nfepon^eloL tightening of domestic mon^^^^^
kets. The liquidity deficit of $1-4 billion m 1966 essen
tinllv matched the $1.3 billion of 196o.

1 1 iS the unfavorable forces that had operated in
1966 persisted while monetary concUtions eased and
Sdeflci widened (Table 26). Measured on the li-
quidity basis, the deficit was at an annual rate of $2.3

Son'during the first three ^l^'^f -/ ^^^^J^^.^.^er
The U S payments position m the fourth quarter
delrlrated sharply, reflecting a decline in the mer-
chandL surplus, the British devaluation and the
foreign exchange and gold speculation which it set off^
Preliminary estimates Indicate a liquidity deficit of
rbout $36 billion for the year as a whole. As measured
by ofiicial settlements, the deterionation in the U.S
payments position was even more P^nounced ; the
balance shifted from a $200 million surplus m 1966 to
a Jeflclt of about $3 billion in 1967, reflecting the espe-
ciaUy marked effect of changing monetary conditions
While shifts in payments can be readily identified
in an accounting sense, their causes are niore mfficult
to trace A great deal of caution is required in making
analytical Judgments based on the accounts, especially
while the estimates are still provisional.

TO assess the underlying forces, cyclical and special
factors must be disentangled from trend elements.

Cyclical Forces in 1961

Even though expansion slowed down last year, the
American economy was closer to its high-employment
growth path than were our major trading partners
which on average fell substantially below their norma
Growth performance. From 1966 to 1967, mdustria
production abroad rose rapidly only in Japan ^'^^f ^""J
moderately in Italy, sluggishly in Canada hardly
changed in Britain or France, and declined in Germany.
The depth and persistence of the German recession
dampened the total performance of continental Europe
significantlv, with cumulative effects on world trade.
Cyclical factors affected a number of balance-of-
payments accounts, including merchandise exports and
Imports, income from investments abroad, and capital
outflows for direct investment. _

The U S merchandise balance improved during a»t>r,
but the increase was held down by the sluggish state
of demand abroad. Exports gained about 5 percent for
the year as a whole, but they declined after midyear,
primarily because of the weakness of demand in some
of our largest foreign markets. Reflecting the slowdown
of U S. economic activity, imports remained at the level
reached in the fourth quarter of 1966 and showed little
tendency to increase until the fourth quarter of 1907.
For the year as a whole, they rose about iVi percent.
The coniparison between 1966 and 1967 demonstrates
the sensitivity of imports to the rate of change of U.S.
economic activity and to the degree of pressure on our
productive capacities. In 1966, when rapid expansion
and shortages prevailed, imports increased by 6.8 per-
cent of the gain in GNP ; in the somewhat more relaxed
economic conditions prevailing for most of 1967, Im-
ports increased by only about 3 percent of the advance
in GNP.

Income from U.S. direct investments abroad ex-
panded somewhat in 1967 after having increased only
sUghtly in 1966. This disappointing performance re-

flected an actual decline in income from investments
in Western Europe during the last two years, despite
the further substantial buildup of assets there. The
gradual narrowing of European profit margins that
has been occurring for a number of years was aggra-
vated by the cyclical situation— a phenomenon not
confined" to American-owned firms. U.S. income from
private assets other than direct investments and from
Government assets abroad continued to increase, how-
ever, about in line with previous years.

Some of the effects of the economic weakness in
Europe and the slowdown in Canada, on the other
hand were favorable to the U.S. payments position.
Along with other influences, the cyclical forces con-
tributed to an indicated total drop in U.S. direct invest-
ment outflow during 1967 of about $.500 million (Table
''7) This was the first decline in the level of outflows
since 1961, although the $3 billion level remained sub-
stantially above that of all years prior to 1965. In
addition to the slowdown abroad, the substantial in-
crease of borrowing abroad during the last two years—
in response to the voluntary program— reduced con-
siderably the outflow from the United States.

Special Factors in 1967

While the payments structure is always influenced
by many special factors, 1967 produced a bumijer crop.
The list of those significant to the U.S. balance of
pavments includes Expo 67, the Middle East crisis,
Vietnam intensification, and sterling devaluation.

Expo. U.S. travel expenditures, which had been
increasing on the average about 10 percent a year,
jumped about 20 percent (or $500 million) in 1967.
The acceleration was accounted for by tourist spend-
ing in Canada, which rose more than 50 percent, reflect-
ing the attraction of Expo 67. Meanwhile, U.S. receipts
from travel expenditures, which has been increasmg
about 15 percent a year, rose only about 4 percent last
year There was no increase in receipts from Cana-
dians, who usually contribute one-third of U.S. travel

' Middle East. The Middle East crisis and its after-
math also, on balance, had some adver.se effects. Whi e
not of great magnitude, the contrast with tbe favorable
balance-of-payments consequences of the 19o6-57 buez
crisis is very marked. Net payments increased as the
result of lower merchandise exports to the area, higher
pavments for transportation, greater personal remit-
tances, and larger new issues of foreign securities in
the U S market. These outweighed the gains in petro-
leum trade and some increase in earnings of American-
owned international oil companies. „HiifiP«
Soiitheast Asia. The intensification of the hostilities
in Vietnam had an additional impact on the U.b. bal-
ance of pavments. U.S. overseas military expenditures
increased further by about $700 million in 1967, to a
level more than $1.4 billion above tie plateau prior to

^'s'terUng The events surrounding the devaluaHon
of sterling had many immediate consequences for the
U S balance of payments. Some are easily identified
but others harder to evaluate. Prior to the devaluation,
speculation against sterling forced the United Kingdom
to liquidate all of its remaining long-term government-
owned assets in the United States, in order to recon-
stitute official reserves. This action increased the U.S.

288

DEPARTMENT OF STATE BUU^ETlN

liquidity deficit by about $500 million in tho fourth
quarter. The deficit may have been increased further
iudirec'tly by the flurry of private gold purchases; it
was al^'0 widened to whatever extent funds moved out
of the United States for purposes of speculation or
hedging in the period of stress and uncertainty.

In combination, cyclical and special factors account
for much of the deterioration in the U.S. balance of
payments during 1967, particularly in the fourth quar-
ter. However, against the history of a persistent U.S.
deficit, the sterling devaluation and its aftermath posed
a threat to the stability of the dollar and consequently
to the stability of the international monetary system.
Thus new U.S. balance-of-payments measures became
necessary in order to strengthen the international
monetary system, insure that the 1967 deterioration
of the U.S. balance of payments is decisively reversed,
and improve the underlying strength of the U.S. pay-
ments position enough to bear the heightened military
costs In Southeast Asia.

The 1968 Program

The monetary and fiscal measures outlined in Chap-
ters 1 and 2 and the continued efforts to increase effi-
ciency and to encourage responsible price and wage
behavior discussed in Chapter 3 provide the broad base
for improvement in our international payments position
and are an integral part of our balance-of-payments
program. In addition, the President set forth on Xew
Year's Day a major new program of measures spe-
cifically directed at the balance of payments.

The new program is directed at improvement in five
separate areas: (1) capital outflows for American
direct investments abroad; (2) loans to foreigners by
American financial institutions; (3) Government net
expenditures abroad; (4) net travel expenditures; and
(.5) merchandise trade. Most of the measures included
in the program will have an immediate impact on the
balance of payments. Some are intended to be tempo-
rary ; others are long term in character. Some have
been put into effect by administrative actions, others
require legislation by Congress, and still others require
cooperative action by our allies and trading partners.

Regulations on Foreign Direct Investment

On January 1, 1968, the President issued an Execu-
tive order ' which basically transformed the Commerce
Department's previously existing Voluntary Direct In-
vestment program into a mandatory program with
much lower levels of permitted capital outfiows. The
voluntary program, which began in 1965, called on the
business community to reduce capital transfers for
direct investment in developed countries ; it also sought
additional contributions to the balance of payments
through such means as expanding exports and remit-
tances of earnings abroad. The program stressed the
desirability of financing investments abroad through
foreign borrowing.

The large.st needs for cash by American affiliates
abroad are for financing plant and equipment expendi-
tures. Foreign plant and equipment outlays by Ameri-
can firms in 1967 were an estimated $10.2 billion, up
from S6.2 billion in 1964. These expenditures are fi-

Table 27. — United States balance of payments:
Capital transactions, 1961-67

[BUllons of dollars]

1967,

Type of capital

1961

1962

1963

1964

1965

1968

firsts

transaction

quar-
ters I

U.S. private capital, ne t

-4.2

-3.4

-4.5

-6.6

-3.7

-4.2

-5.1

Direct Investment. --

-1.6

-1.7

-2.0

-2.4

-3.4

-3.5

-2.9

New foreign security

issues

-.6

-1.1

-1.2

-1.1

-1.2

-1.2

-1.6

Other transactions In

foreign securities '-..

-.2

.1

.1

.4

.4

.7

.6

U.S. bank claims

-1.3

-.6

-1.6

-2.5

.1

.3

-.7

Other claims

-.6

-.4

2

-1.0

.3

-.4

-.3

Foreign nonllquid capi-

tal, net

.7

1.0

.7

.7

.3

2.6

3.9

Direct hivestment..-

•1

.1

(')

w

.1

.1

.2

U.S. securities (ex-

cluding Treasury

Issues)

.3

.1

.3

-.1

-.4

.9

1.3

Long-term U.S.

bank liabilities

m

(')

.1

.2

.2

1.0

1.1

Other*

.3

.8

.4

.5

.4

.5

1.3

Foreign nonllquid capi-

tal, net--

.7

1.0

.7

.7

.3

2.5

3.9

Plus: Foreign private

liquid capital, net >

I.O

-.2

.6

1.6

.1

2.4

•.9

Less: Increases In non-

llquid liabilities to

foreign monetary

authorities '

.3

W

.3

.1

.8

»1.4

Equals: Foreign capital

excluding official re-

serve transactions,

net

1.7

.6

1.3

1.9

.3

4.1

3.3

' For text, see md., Jan. 22, 1968, p. 114.

' Average of the first 3 quarters at seasonally adjusted annual rates,
except as noted.
3 Includes redemptions.

• Less than $S0 million.

• Includes certain special Government transactions.

» Includes changes In Treasury liabilities to certain foreign military
agencies during 1961-62 and to International nonmonetary institutiotis.
fi Average of the first 3 quarters on an unadjusted annual rate basis.
' Included above under foreign nonUquid capital.

Note.— Detail will not necessarily add to totals because of roundhig.

Source: Department of Commerce.

nanced out of many sources. In 1966, capital outflows
for direct investment accounted for about 32 i)ercent
of the total; reinvested earnings were 20 percent;
long-term borrowings abroad amounted to 8 percent;
short-term borrowings abroad and depreciation allow-
ances on existing foreign assets represented tJie re-
mainder— about 40 percent. As had been the case
previously, the new program is directed only at new
outfiows of funds from the United States and reinvested
earnings. It does not aim to curb plant and equipment
expenditures as such, although they are bound to be
affected. Long-term funds borrowed abroad are spe-
cifically exempted.

Despite excellent business cooperation with the vol-
untary ijrogram, a mandatory program is necessary to
achieve the large improvement required in 1968 and
to insure equality of burdens among all direct investors.

The new program provides three basic limitations on
direct investors: (1) annual limits are placed on their
new direct investment — capital outflow plus reinvested

FEBRUARY 2 6, 1968

289

earnings — in foreign subsidiaries or brandies; (2) a
minimum share of total earnings from tlieir direct in-
vestments must be repatriated — generally equal to the
same percentage that they repatriated during 1964-66 ;
and (3) their short-term financial assets held abroad
must be reduced to the average level of 1965-C6 and
held at or below that level.

The annual limits on direct Investment are deter-
mined in the following way :

(1) For less-developed countries, as a group, new
capital transfers and reinvested earnings, in combina-
tion, may not exceed 110 percent of a direct investor's
average new direct investment in less-developed coun-
tries in 1965-66.

(2) For developed countries to which U.S. capital
inflow is essential — including Canada, Japan, Austra-
lia, New Zealand, the United Kingdom, and some
oil-producing countries — the maximum permitted al-
lowance is 65 percent of the annual average of capital
outflow plus reinvested earnings in 1965-66.

(3) For all other countries, principally continental
Western Europe, a moratorium is imposed on any new
capital outflows for direct investment. However, a di-
rect investor many normally plow back each year into
his existing direct investments in these countries as a
group the same percentage of his earnings as he rein-
vested in the years 1964-66.

The program exempts small direct investments not
exceeding $100,000 in the aggregate. It also establishes
administrative procedures whereby the Secretary of
Commerce may authorize in exceptional cases direct
investments in excess of those allowed under the gen-
eral rules.

The direct investment program is designed to achieve
a $1 billion improvement in the balance of payments.
The impact is to be concentrated on the surplus coun-
tries of continental Europe, with a minimum effect on
other countries. It requires an important sacrifice by
U.S. international corporations, but it is designed to
keep interference in the details of business decisions
to a minimum. Normal international trade among affil-
iate companies will not be restricted, nor wUl other
usual business transactions be disturbed. The program
is intended to be temporary, subject to relaxation as
soon as world payments conditions permit.

Foreign Credits by Financial Institutions

The Board of Governors of the Federal Reserve Sys-
tem issued new suggested guidelines on foreign credits
of financial institutions. The Pre.sident gave the Board
authority to make the guidelines mandatory if that
should prove necessary. The new guidelines, covering
both banks and other financial institutions, represent
a major tightening of the program begun in 1965. They
aim at a substantial inflow of $500 million in credits
subject to the program in 1968. There was an outflow
of such credits of about $400 million in 1967.

Three types of restrictions were placed on the ex-
tension of foreign credits by banks. (1) Ceilings on
credits for most large banks were reduced to 103 per-
cent of foreign credits outstanding on December 31,
1964. Priority within the ceiling is to be given to credits
for financing American exports and for supplying capi-
tal to less-developed countries. (2) In addition, banks

are called on not to renew at maturity outstanding
term loans to developed countries of continental Europe
and not to relend the repayments of such loans to resi-
dents of those countries. (3) Banks are also to reduce
the amount of short-term loans outstanding to de-
veloped countries of continental Europe by 40 percent
of such credits outstanding on December 31, 1967,
bringing them down at a minimum rate of 10 percent
a quarter.

Parallel restrictions were also placed upon activities
of nonbank financial institutions such as insurance
companies, finance companies, trust companies, and
employee retirement and pension funds. It is expected
that all financial institutions will continue to cooperate
fully in the program.

Oovemment Expenditures Abroad

The impact of the Government's own expenditures
abroad will be reduced as part of the new program
while still maintaining essential functions. The Presi-
dent has directed

— the Secretary of State to negotiate with our NATO
allies to minimize the foreign exchange costs of keep-
ing our troops in Europe ;

— the Secretary of Defense to take steps to reduce
further the foreign exchange impact of personal spend-
ing by U.S. forces and their dependents in Europe ;

—the Director of the Bureau of the Budget and the
Secretary of State to reduce by at least 10 percent the
number of Government civilian personnel working over-
seas and to curtail overseas travel abroad to the
minimum consistent with the orderly conduct of Gov-
ernment; and

— the Administrator of the Agency for International
Development to reduce expenditures abroad by $100
million and take measures to insure that goods exported
from the U.S. under AID loans are additional to U.S.
commercial exports.

These measures are aimed at saving $500 million in
the balance of payments.

Travel Account

In order to reduce the net travel deficit by $500
million, the President has asked Americans to defer
aU nonessential travel outside the Western Hemisphere
for two years ; he also directed the Secretary of the
Treasury to explore with the appropriate congressional
committees legislation to help achieve that objective.
Long-term efforts to attract more foreign visitors to
the United States are being intensified.

Trade Expansion

The new program also includes several long-range
measures of improved export financing and export
promotion. Congress wiU be asked to earmark $500
million of the Export-Import Bank's lending authority
for a new export expansion program designed to guar-
antee, insure, and make direct loans for exports which
do not fall under the Bank's existing criteria. The
Bank will also expand and liberalize its rediscount
program to encourage private banks to increase their
financing of exports. Congress will also be asked to
support a five-year, $200 million program in the De-
partment of Commerce to promote the sale of U.S.

290

DEPARTMENT OF STATE BULLETIN

goods abroad. The Department plans to initiate a pro-
gram of joint export associations to provide direct
financial support to American firms joining together to
sell abroad.

Prospects for 1968

The new i)rogram will have a major impact in re-
ducing the U.S. deficit this year. It should cut private
capital outflows by more than $1% billion from 19C7
levels. It aims to reduce net travel outflows by $500
million. The impact of Government expenditures abroad
will be reduced and American exports stimulated.
Moreover, the prompt and decisive action taken by the
United States should help to halt the speculation and
anxiety that led to some short-term capital outflows in
the closing months of last year. Long-term capital
outflows in the form of security purchases will con-
tinue to be restrained by the Intere.st Equalization Tax,
which was extended in 1967 with new authority for
the President to vary the rate of tax within specified
margins.

The condition of the U.S. domestic economy will have
very great importance for the balance of payments.
Prompt enactment of the tax surcharge by the Congress
and responsible wage and price decisions by American
labor and management are essential to insure that the
growth of imports will be moderate and that American
business firms will have incentives to marliet exports
actively and competitively.

General business conditions abroad will al.so have
a significant influence on the balance of payments in
1968. As appraised by OECD and leading private
experts, European economic growth is expected to im-
prove from the disappointing sluggi.shne.ss of 1967.

To be sure, the new U.S. program will tend to reduce
investment demand and to tighten monetary conditions
in Europe. However, most countries on the continent
are in a position to counter this tendency effectively
with more expansionary monetary and fiscal policies.
Both balance-of-payments conditions and the state of
domestic demand call for more stimulative policies on
their part. As indicated in the discussion of the adjust-
ment process, surplus countries have a world responsi-
bility to manage their economies in such a way as to
insure growth and to encourage expansion.

The possibility of a major improvement in U.S. trade
this year, however, is limited by several factors, includ-
ing the improvement in the competitive position of
Britain provided by devaluation, the indicated forth-
coming bulge in steel imports in anticipation of a
possible .strike, and the recent good agricultural harvest
in many countries which will limit the growth of ex-
ports of farm products. Furthermore, a number of
European countries, including Germany, the Nether-
lands, and Austria, are instituting major changes in
their border tax arrangements this year in ways likely
to encourage exports and inhibit imports — contrary to
the needs of world payments adjustment. Diplomatic
consultations have been initiated to mitigate the dis-
advantages to our trade which arise from differences
in national tax systems. The Administration is pre-
paring legislative measures in this area ; their scope
will depend on the outcome of these consultations.

Finally, the Common Market at midyear is scheduled

Table 28. — Unit labor costs in manufacturing for
selected industrialized countries since 1961 '

[1961 = 100]

Country

United States

Canada

France

Germany

Italy

Japan

United Kingdom

1962

1963

1964

99

98

98

99

98

97

107

112

117

107

110

110

107

118

123

109

114

111

103

102

103

1965

97

99
119
117
120
118
108

19661

99

103
116
123
118
125
113

' Ratio of wages, salaries, and supplements to production; national
currency basis.
2 Preliminary.

Note.— Data relate to wage earners In Italy and to all employees in
other countries.

Sources; Department of Labor and Council of Economic Advisers.

to remove all remaining Internal tariffs and to com-
plete the adoption of a common external tariff. The
consequences of this action on U.S. trade wiU be moder-
ated, however, by the simultaneous implementation of
the first tariff cuts by the EEC under the Kennedy
Round.

Long-Term Prospects

A key element in the balance-of-payments outlook
for the long run is our ability to maintain and improve
the competitive position of the United States. It is
difficult to trace the connection between competitive
changes and trade movements, but there is little doubt
that an increase in relative costs — which, in turn, raises
relative prices — can impair a country's trade perform-
ance, while reductions in relative costs can enhance its
trade surplus.

Empirical evidence on costs is limited to manufac-
tured goods, and even there it is far from satisfactory.
The data do make clear that, during much of the decade
of the 1950's, U.S. costs and prices rose faster than
those of our major competitors. We lost ground in
international markets during that period. Within recent
years, however, the situation with respect to costs was
reversed. In manufacturing, U.S. unit labor costs (the
largest element in total costs) declined between 1961
and 1965, while costs in other countries except Canada
increased substantially (Table 28). As a result, our
share of foreign markets in manufactured products
stabilized, when intra-EEC and intra-EFTA trade are
excluded. In 1966, our costs increased about as rapidly
as the average of other countries. Comprehensive data
are not yet available for 1967, but our costs continued
to rise, probably at a rate exceeding that of most
European countries.

Many of our trading partners are facing fundamental
structural changes in their economies. The labor sup-
ply situation that permitted the period of extremely
rapid growth in Europe has altered fundamentally.
The growth of the European labor force in the next
decade will be much smaller than in the recent past,

FEBRT7ART 26, 1968

291

and less scope remains for shifting European labor out
of less efficient pursuits, such as agriculture, or out of
unemployment into industrial activity. This will mean
greater European demands for labor-saving machinery,
in which U.S. producers hold a marked competitive
edge ; it may also Increase pressures in the European
labor market and strengthen the bargaining power of
European workers. Finally, with the elimination of all
tariff barriers this year, internal EEC trade will no
longer receive the further benefit of periodic duty re-
ductions. Therefore, with proper economic management
at home, the United States has an excellent opportunity
to strengthen its trade surplus over time.

The development of European capital markets has
proceeded at a substantial pace in the past few years,
spurred partly by the U.S. voluntary programs and the
Interest Equalization Tax. The new program will pro-
vide added incentives for the mobilization of long-term
funds in European capital markets. This should, in the
years ahead, tend to moderate the basic demand for
capital from the United States. The recent vast expan-
sion in U.S. business holdings overseas should also help
by increasing the inflow of earnings, dividends, royal-
ties, and fees in the years ahead.

THE INTERNATIONAL MONETARY SYSTEM

Because dollars are used as reserve assets, the U.S.
balance of payments is closely linked to the stability
of the entire international monetary system.

The Gold-Exchange Standard

In major part, existing international monetary ar-
rangements are based on the rules and institutions
developed at the Bretton Woods Conference in 1944,
which established the IMF. The basic principles under-
lying the Bretton Woods system call for tie converti-
bility of one currency into another at essentially fixed
exchange rates, with fluctuation around declared pari-
ties limited to a narrow range. Changes in parities are
to be made only in cases of fundamental payments dis-
equilibrium and upon prior consultation with the Fund.

Becau.se demands for a nation's currency vary from
time to time, and thus receipts and payments do not
balance exactly, a nation needs monetary reserves to
support the value of its currency in a fixed exchange
rate system. Under the so-called gold-exchange stand-
ard, these "owned" reserves are held both in gold and in
certain foreign currencies. In fact, the dollar is the prin-
cipal reserve currency for most nations of the world,
although the pound sterling and the French franc also
serve this purpose on a smaller scale. Currencies are
useful as reserve assets because they are convertible
amongst themselves, are claims on the real resources
of issuing countries, and can be held in interest-yield-
ing, but still highly liquid, form. All countries other
than the United States meet their IMF obligations by
buying and selling currencies, mostly dollars. The
United States meets its basic commitment under the
Fund rules by freely buying and selling gold to foreign
monetary authorities at a fixed price of $35 an ounce.
Gold maintains its reserve asset status by being linked
to the dollar and the IMF, and by tradition.

Reserves are the main line of defense for any nation
which is seeking to correct a payments deficit through
an orderly adjustment. Multilateral credit facilities
serve as a further line of defense. The Fund provides
medium-term credits to assist members in overcoming
temporary payments deficits without resort to unduly
restrictive international or domestic measures. This
system has been strengthened by the recent creation of
a network of short-term credit facilities among central
banks and by the development of the General Arrange-
ments to Borrow, which enlists additional resources
from major industrial nations to help the Fund meet
large credit needs.

These various credit facilities supplement but are not
a substitute for owned reserves. As has been clearly
demonstrated in the past, in a world of growing trade
and payments, nations desire to hold a growing
quantity of monetary reserve assets. In order to in-
crease their reserves, nations aim for payments sur-
pluses. If successful, the efforts of some countries to
attain surpluses must be reflected in deficits for other
countries. Under present arrangements, such a com-
petitive effort to build reserves can lead to undesirably
restrictive actions on domestic economies and on trade
and capital flows.

In fact, world trade and output have grown rapidly
in recent years. But monetary reserves have increased
slowly. If that sluggish pace continues, it could inhibit
the growth of economic activity. Total world reserves
have grown at an annual rate of 2.7 percent since 1960
(Chart 15), far below the 7.4 percent annual rate of
expansion of world trade.

Of the major types of reserves, the dollar has con-
tributed most of the increase in the total stock of mone-
tary reserves. Gold has made very little contribution in
the 1960's, and none at all in the past two years. Cer-
tain dravring rights in the IMF, which are created as a
byproduct of the credit operations of the Fund, are
automatically available to member nations and are thus
properly classified as reserve assets. These "super gold
tranche" reserve assets have achieved some quantita-
tive importance in recent years, but they are also ex-
tinguished through specific credit operations.

A survey of future prospects makes it clear that nei-
ther gold nor the dollar can be counted on to add sub-
stantially to total world reserves in tie years ahead.

Gold Reserves

Gold constituted 56 percent of total world monetary
reserves in 1967 (excluding the Soviet Union and other
Communist countries), a decline from 72 percent in
1948. The supply of newly mined gold has been small in
relation to existing monetary stocks, and a large por-
tion of new supplies has been absorbed into private uses
and holdings.

Historical Background

In many respects, the recent decline in the impor-
tance of gold is an extension of a trend that began after
World War I. That trend, in turn, reversed the develop-
ments of the preceding half century when gold first
achieved a preeminent role.

Following the diseoviery of important new deposits in
the middle of the 19th century, gold replaced silver as

292

DEPARTMENT OF STATE BULLETIN

the standard of international finanoe and became the
predominant basis of the monetary system of most
major trading countries. Even in this i)eriod, the slow
increase in monetary gold threatened to act as a bralie
on economic development. However, new discoveries,
chiefly in South Africa, provided enough additional gold
to keep the system going.

After World War I, the gold standard was trans-
formed into a less rigid system. Gold holdings were in-
creasingly concentrated in the hands of central banlis,
while the jiublic relied increasingly on paper currency
and checking accounts for domestic transactions. Many
central banks kept all or part of their international re-
serves in the form of claims on "key currencies" — pri-
marily the pound sterling and the dollar — themselves
convertible into gold. This system is the gold-exchange
standard, which, after an interruption during the
1930's, has survived to the present day.

Private Demands

By developing the use of financial claims as reserves,
the world has learned to avoid the constraints imposed
by the slow growth of gold stocks. In the last few years,
the importance of this development has become espe-
cially great because gold production has leveled off,
while the nonmonetary consumption of gold has in-
creased rapidly. The physical properties of gold, such
as electrical conductivity and resistance to corrosion,
have proved to be increasingly attractive in industrial
applications. The use of gold in jewelry and dentistry
has more than kept pace with the rise in world income.
Commercial gold consumption in the United States
amounted to $220 million in 1966, and is rising at an
annual rate of more than 10 percent. While there are
no accurate worldwide data, gold consumption in indus-
try and the arts appears to be absorbing about $%
billion a year. Production of newly mined gold (outside
of Communist countries) now amounts to about $1%
billion a year, intermittently augmented by Russian
gold sales.

Hoarding and speculation also contribute to the pri-
vate demand for gold. Even if it were not illegal, most
Americans would find gold an unattractive asset be-
cause it earns no interest and is exjjensive to store
safely or to insure. But many foreigners have reasons
for thinking otherwise. Gold can be more easily carried
in emergencies or hidden (especially from the tax col-
lector) than bulkier assets. Also, in some parts of Asia,
gold is the only asset that a wife may own beyond the
control of her husband. Furthermore, there has also
been some net acquisition of gold by private speculators
who were betting on an increase in the price of gold.

Quite apart from speculation, it is clear that gold can
supply, at most, a small fraction of the needed growth
in world monetary reserves. The monetiry gold stock
could grow no more than 2 percent a year on the basis
of present rates of mining less consumption in industry
and the arts. Given the prospect of growing commercial
use, even that rate of growth may not be achievable
over time. Indeed, the world cannot count on any sus-
tained increase in monetary gold reserves in the long
run. In fact, it is possible that, over time, gold may
gradually lose even its present importance as a mone-
tary reserve asset

Chorl ^S

World Monetary Reserves

eilUONS OP DOllttS M of ptrloJ)

80

1966 1967J

I'INCLUOES IMF COLO HOLDINGS.

I'DATA ARE FOR END OF THIRD QUARTEff 1967,

SOURCE: INTERHATIONAL MONET ART FUHO.

Dollars As Reserves

At the present time, liquid dollar holdings of foreign
monetary authorities amount to about $16 billion and
are larger than the U.S. gold stock. The United States
could provide substantial further increa.ses iu foreign
reserves only by running continued large deficits. The
persistence of such deficits would impair confidence and
thus endanger the link between gold and the dollar,
which is the essence of the gold exchange standard. The
U.S. commitment to move toward payments equilibrium
is designed to assure the strength of the link, preserv-
ing the high quality of the dollar as a reserve asset by
limiting the increase in the quantity of dollars held
abroad.

As another step to insure the .strength of the dollar
and thus of the gold exchange .standard, the President
has propo.sed legi.slation to remove the current "gold
cover" requirement on domestic currency.

Removal of the Gold Cover

Under existing legi.slation, the Federal Reserve Sys-
tem is required to hold a 25-percent reserve in gold
against Federal Reserve note liabilities. Increasing
amounts of gold are brought under the gold cover as
the volume of Federal Reserve notes expands to meet
the needs of a growing economy. As a domestic require-
ment, the gold cover is an anachronism. Appropriate
monetary policy is related to the over-all needs of the
economy ; aind the Federal Reserve Board exerci.ses its
authority in relation to those needs, not in relation to
our gold holdings.

FEBRUARY 2C, 1968

293

The only real purpose for the United States to hold
a gold stock is to insure the international convertibility
of the dollar. The growing amount of gold needed to
satisfy the gold cover requirement is approaching the
level of U.S. gold holdings. While there are provi.sions
permitting the gold stock to dip below the gold cover
requirement, the retention of this statutory limit serves
no useful purpose. And its removal will make unmis-
takably clear that our entire gold stock is available to
defend the international convertibility of the dollar at
its present parity.

Meeting Reserve Needs

In view of the limited possibilities for gold and the
dollar to provide additional international monetary re-
serves, it is clear that positive action must be taken
to assure the growth in reserves essential to support ex-
panding world trade.

That need must be met in a more constructive way
than by an increase in the price of gold. As the Presi-
dent has repeatedly stated, the United States is unal-
terably opposed to a rise in the price of gold. Such an
action would be both ineflScient and inequitable. Its
primary impact on reserves would be achieved by a
large "one-shot" write-up of the nominal value of gold
reserves, rather than by an assurance of continued
steady growth. It would stimulate a limited increase in
gold production, but only by diverting scarce resources
into the production of a commodity for which there is
no shortage in nonmonetary use. It would give un-
earned windfall gains to major gold producing nations,
such as South Africa and the Soviet Union, while penal-
izing those countries, such as Japan and Sweden, which
have supported the gold exchange standard by holding
reserves in dollars. It would not only reward specula-
tors but — more important — would encourage them in
the belief that further price rises were inevitable.

In rejecting an increase in the gold price as a means
of expanding reserves, the United States can point
toward a far more constructive alternative. Just as the
gold exchange standard added key currencies as re-
serve assets supplementing gold, now the key currencies
must be supplemented by appropriate new reserve as-
sets. The decision to create such new reserve assets is
needed promptly. The threat that total reserves may not
grow adequately in the future is a source of strain and
uncertainty in the international monetary system and
an encouragement to speculation in gold and foreign
exchange markets.

To encourage the orderly progress of world trade
and economic growth, and to maintain confidence in in-
ternational monetary arrangements, the nations of the
world must show decisively and promptly their deter-
mination to meet the need for growing reserves by
creating an adequate supplement to gold and the dollar.
The development of a supplemental reserve asset,
backed by the full faith and credit of participating na-
tions, is the ideal way to solve the problem. Such an
asset can be universally accepted as a supplement to
gold and dollars and can be issued in quantities suf-
ficient to insure adequate growth of total monetary
reserves. The outline plan for international monetary
reform, unanimously endorsed at the 1967 annual meet-
ing of the IMF in Rio de Janeiro, is a major forward
step toward a solution.

The Rio Agreement

The plan agreed upon in Rio represents the outcome
of four years of intensive study and negotiation, in-
volving the major industrial countries in the so-called
"Group of Ten" as well as the wider forum of the Fund.
It provides for the establishment, within the IMF, of a
new reserve facility for the creation of Special Drawing
Rights (SDR's), designed to "meet the need, as and
when it arises, for a supplement to existing reserve as-
sets." SDR's will be created by deliberate deci-sion of
IMF members and will be distributed to all participants
in proportion to their Fund quotas. Countries receiving
these rights will be able to count them as part of their
reserves. Subject to certain rules described below, they
can use them to settle balance-of-payments deficits or
satisfy reserve needs by drawing on (i.e., exchanging
them for) convertible currencies of other countries. An
amendment to the Fund's Articles of Agreement that
will express the new scheme in precise legal terms is to
be prepared by the Executive Directors of the IMF not
later than the end of March of this year, and wiU be
submitted to member countries for ratification.

As President John.son has indicated, the Rio agree-
ment constitutes the greatest forward step in the im-
provement of the international monetary system since
the creation of the Fund itself. For the first time in his-
tory, the great majority of the world's nations, com-
prising all the members of the IMF, has agreed to co-
operate in the conscious and deliberate creation of a
new and permanent reserve asset, in amounts and at
a pace systematically geared to assure adequate growth
of total international reserves.

'Nature of the New Reserve Asset

Essentially, SDR's are claims giving their holders the
unconditional right to obtain convertible currencies
from other members of the Fund to meet balance-of-
payments needs or unfavorable developments in a
country's total reserves. These claims are backed by the
obligation of member countries to accept them in ex-
change for convertible currencies up to certain limits.

In the design of the new asset, every effort has been
made to assure that it will be a true supplement to
existing reserve assets and will, in fact, add to the total
of world reserves. In line with these considerations,
SDR's will carry a gold value guarantee and will be
"as good as gold" for the settlement of international
payments. Indeed, since they can be used only for such
settlements, any newly created SDR's constitute a per-
manent addition to the world's official monetary re-
serves. Unlike gold, they cannot be drained into private
hoards, and unlike super gold tranche drawing rights,
they cannot be extinguished as the by-product of other
Fund operations.

The new reserve asset will also have an advantage
over gold in bearing interest ; at the .same time the rate
will be much lower than is available on dollars and
other reserve currencies. And they will, of course, not
share the dollar's unique role of serving simultaneously
as a reserve as.set and as the world's principal transac-
tions currency.

While SDR's will have all the essential character-
istics of reserve assets, the f ramers of the plan realized
that it may take some time until participating countries
become fully accustomed to this new asset. The plan
therefore places certain limitations on the ability of

294

DEPARTMENT OF STATE BUIXETIN

J

individual participating countries to use SDK's and on
their obligation to accept tliem. As the new asset be-
comes more familiar to the world through experience,
it should become increasingly possible to reduce or
even eliminate such limitations.

The initial rules are designed to assure that the new
reserve asset will be smoothly integrated into the mone-
tary system with existing assets. Under them, the Fund
will frequently act as a traffic policeman guiding
transfers.

The rules require, first, that SDK's should be used
only for balance-of-payments needs or to meet reserve
losses and not merely for the purpose of shifting from
one reserve asset into another.

Second, when SDK's are used for the acquisition of
convertible currencies, the countries drawn upon should
normall.v be in a solid balance-of-payments position —
as a result of either surpluses or strong reserves. And
the drawings are to be guided toward such countries
in a way that will, over time, provide a more or less
proportionate relationship of the new asset to total
reserves. Thus it is assured that the holdings of the
new asset will be widely dispersed among participating
nations.

Third, each participating country is obligated to ac-
cept SDK's in exchange for convertible currency only
up to the ijoint where its total holdings are three times
the amount of such reserve assets that have been cumu-
latively allocated to it. This limits the obligation of any
individual nation while insuring ample scope for the
effective use of the new asset.

Fourth, countries which have used SDK's in large
amounts over an extended period will have a limited
obligation to reconstitute their holdings over time. The
rule provides that, during the first five years of the
operation of the plan, a country's average holdings
should be at least 30 percent of its average allocation
over this period. In a very rough way, this requirement
can be compared to a minimum average balance that a
bank may require on checking accounts.

Decisionmaking and Distribution

Following ratification of the Rio plan, the activation
of the new facility will require a separate set of deci-
sions. Activation can only occur when the Managing
Director of the Fund, after careful study and upon con-
sultations with Fund members to assure him of the need
for additional reserves, makes a specific proposal as to
the timing and the amount of SDK's to be created. Final
approval of the proposal requires an 85-percent ma-
jority of the voting power of the participating coun-
tries, somewhat more than the 80-percent vote required
for quota increases in the Fund. In effect, it gives a veto
power not only to the United States but also to the coun-
tries of the Common Market, should they choose to vote
as a group.

Since SDK's are designed to assure an adequate
over-all growth of international reserves over time,
decisions regarding the amount of SDK's to be created
will normally be made for a basic period ahead (such
as five years), with equal amounts to be issued during
each of these years. The task of satisfying short-term
variations in liquidity needs will thus continue to be
left to such existing mechanisms as the credit facilities
of the Fund and the network of central bank swap
arrangements.

The new facility will be universally available to Fund
members, without discrimination — an important prin-
ciple on which the United States placed great stress
during the course of the negotiations. Under this ar-
rangement, the United States would receive about $250
million out of each $1 billion of SDK's created. The
share of the Common Market countries as a group
would be about $180 million ; of the United Kingdom,
.$116 million ; of Canada and Japan, about $35 million
each ; of other developed countries, $107 million ; and
of the less-developed countries, $280 million.

In effect, the new drawing rights are to be created
by the stroke of a pen, but that stroke will commit the
full faith and credit of participating countries behind
the asset that they have jointly established. As is true
in the case of domestic money, the general and uncon-
ditional acceptability of such monetary assets reflects
confidence in the issuing agent. No one could ask for a
.stronger Issuing agent than the nations of the IMF
banded together.

Paper monetary reserves are by no means new — •
sterling and dollars have served as reserves for gen-
erations. What will be new is the reliance on a reserve
asset backed by a group of nations rather than a single
one and capable of being created by international
decision.

The ratification of the Rio plan is still to come. And
the implementation and actual creation of SDK's are
a further step away. Even when they are created, it
will take time for them to become established as a
customary usable reserve asset. But the world is now
taking the decisive step of choosing to travel this
route. It is adopting, as a means of meeting the need
for growing reserves, a clear alternative to a rise in the
monetary gold price.

The potentialities for this reserve asset are obvious
and enormous. It need not and will not di.splace gold
and the dollar as reserve assets. But it will free the
world from concern about the supply and demand for
gold.

While the creation of SDK's will not, in itself, solve
the balance-of-payments problems of the United States
or any other country, it will enable countries to in-
crease their reserves without pursuing mutually in-
compatible payments goals. Thus, it should facilitate
an orderly adaptation of other countries' payments
positions as the United States reduces its deficit, and
contribute to the general health and strength of the
international monetary system.

The Tasks Ahead

The developments of late 1967 have given .special
urgency to the early ratification of the SDK facility. In-
deed, activation of the facility in the relatively near
future may prove highly desirable to insure that the in-
ternational monetary system will function with fuU
effectiveness.

Several aspects of the current situation point toward
the need for early action. The world's monetary gold
stock actually declined in 19C7. There are indications
that inadequate reserve expansion may already be in-
hibiting economic growth and the freedom of interna-
tional transactions. Moreover, successful implementa-
tion of the British devaluation will require a sharp
shift in Britain's payment position from a large deficit
to a sizable surplus ; this will in turn call for reductions
in surplu.ses and the incurring of deficits by other major

FEBRTTART 26, 1968

295

countries. Additional adjustments in the payments
positions and structures of major surplus countries will
also be needed as a counterpart to Improvements in the
U.S. balance of pa.vments. These diflScult adjustments
will be greatly facilitated if an adequate growth of
total world reserves is assured.

TRADE POLICIES

World trade has grown spectacularly in recent years.
Between 1953 and 1966 it expanded by almost two and
a half times, while world output of primary and manu-
factured products doubled. The growth of trade relative
to output has been an important factor in making this
period the most prosperous one in recorded history. It
was fostered by the progressive liberalization of the
commercial policies of the major trading nations. The
United States can talie pride in its leading role in this
liberalization.

Kennedy Round

The Kennedy Round was the sixth venture at multi-
lateral trade negotiations undertaken by the GATT
since its creation in 19-17. The growth of regional trad-
ing blocs in Europe and elsewhere introduced a special
urgency and significance to the latest negotiations. The
major nations of Europe had divided themselves into
two trading group.s, the EEC and the EFT A. Each group
provided for eventual free trade among its members,
accompanied by a continuation of tariffs and other re-
strictions against nonmembers. While these organiza-
tions have many de.sirable features, they can pose a
threat to the development of more liberal trading rela-
tions among nations that belong to different groups and
between group members and nonmembers like the
United States.

The United States' response to this challenge was the
passage of the Trade Expansion Act of 1962 which be-
came the stimulus for the Kennedy Round. This act per-
mitted the President greater flexibility in bargaining
for lower tariffs and provided for adjustment assist-
ance to American workers and business firms that
might be injured as a result of tariff concessions. The
negotiations were formally begun in May 1961 and were
concluded after many difficulties on June 30, 1967.
Although some problems could not be adequately over-
come within the Kennedy Round, a remarkable degree
of tariff reduction was achieved. The result.s have been
widely and accurately acclaimed as a major accom-
plishment.

Features of the Agreement

The agreement includes tariff concessions covering
about $10 billion of world trade ; the United States gave
concessions on about $8.5 billion of its imports while
concessions by others cover the same amount of U.S.
exports. Tariff reductions of 50 percent were applied to
numerous manufactured products and significant but
smaller reductions were applied to many others. For
the four largest participants — the United States, the
EEC, the United Kingdom, and Japan — the weighted
average reduction of tariffs on manufactured products
was about 35 percent. The U.S. tariff reductions will
generally take effect in five equal annual installments.

the first of which became effective on January 1, 1968.
Some of our trading partners took a similar step at the
same time, but others will wait until midyear and then
make 40 percent of their reductions.

Certain manufactured products required special
negotiations ; these included chemicals, cotton textiles,
and iron and steel. Chemical products posed a particu-
larly dilBcult problem, which was resolved by making
two separate agreements. The first is incorporated in
the multilateral tariff-reducing agreement providing
for a stipulated unconditional reduction of chemical
tariffs by the United States and other countries.

The second is conditional upon legislative action by
the United States to remove the special valuation
method now applied by U.S. tariff regulations on ben-
zenoid chemicals. Under legislation adopted in 1922,
when the American chemical industry was still in an
"infant" stage, the U.S. tariff rate for competitive ben-
zenoid chemicals is applied to the price of similar
products made by domestic producers rather than to
the actual iirice of imports. If the United States adopts
the normal valuation practice on these items, certain
of its major trading partners will further reduce chem-
ical tariffs and vrill also lower some nontariff barriers.

Agricultural products were also considered in the
Kennedy Round and proved to be especially trouble-
some. However, significant tariff concessions were fi-
nally agreed upon. Those by other nations cover about
$870 million of U.S. exports. Our concessions covered
about the same amount of U.S. imports. The other
major accomplishment in agriculture was the negotia-
tion of a grains agreement. It provides for a higher
minimum price for wheat than existed under the old
International Wheat Agreement, and involves an in-
crease of about 15 percent in U.S. export prices. It also
provides for a multilateral food aid program equivalent
to 4.5 million tons of cereals a year, of which the
United States would contribute 42 percent.

While these steps are encouraging, the degree of
restriction remaining on international trade in agricul-
tural products — particularly through nontariff bar-
riers— still greatly exceeds that on manufactured goods.
Nevertheless, the Kennedy Round went further than
previous negotiations in the agricultural area. Further-
more, the principle embodied in the food aid agreement
may have great significance over the long run, because
it recognizes that responsibility in the international
war on hunger extends to all countries, not just to the
United States and the other major food exporting
nations. If the world's need for food should outrun
supplies in the years ahead, this agreement could be-
come the pattern for an international corrective
program.

The United States made particular efforts to reduce
tariffs on products of special interest to less-developed
countries. It granted concessions on more than $900
million of such products without attempting to obtain
full reciprocity.

Another element in the Kennedy Round package was
the successful negotiation of an international anti-
dumping code. This accord is consistent with existing
American laws which .safeguard our industry, and it
commits our trading partners to insure fair procedures
to American exporters. Also as part of the negotiation,
a three-year extension of the long-term cotton textile
arrangement was concluded.

296

DEPARTMENT OF STATE BULLETIN

Consequences of the Tariff Reductions

The aiuoimt of existing trade covered by tariff outs
in tlie Kennedy Round does not reflect the iK)tentiaI
exiwnsion of trade which is one of the key benetits of
the tariff reductions. New U.S. export opportunities
will be created. Moreover, American producers will ex-
I)erience lower costs as a result of reduced tariffs on
many inputs. The welfare of American consumers will
be enhanced by lower prices of goods of both domestic
and foreign origin.

Exports. American exports will be stimulated from
two sources. First, as tariffs abroad are reduced, our
exporters will have an opportunity to compete on a
more equ.<il footing In the domestic markets of foreign
producers. Second, the t;xriff advantage in favor of
member nations over non-members within the EEC and
i:FTA will be reduced, thereby enabling American ex-
porters to comiiete more effectively in the.se large
markets. For example, because the EEC tariff on
pumps and compressors will be reduced from 12 to 6
percent when the Kennedy Round reductions are com-
pleted, German pumps will have only a 6-percent pref-
erential edge over American pumps in the Dutch market
as compared to the 12 percent they now enjoy.

Inputs. A second major gain from the Kenned.y Round
will come from the reduction of American tariffs on
materials and components used by American manu-
facturers. Both the imported items and the competing
domestic materials will be cheaper, and production
costs will thereby be reduced. As a consequence, the
competitive position of American manufacturers using
these inputs will be improved in both exix)rt and do-
mestic markets.

To cite only one example, tariffs on a wide range of
steel alloying materials will be progressively reduced.
This should reduce the costs of producing alloy steels,
and of machine tools, machinery and equipment manu-
factured from such steels, thus strengthening the com-
petitive position of our machinery industries in export
markets.

Consumer Goods. The Kennedy Round also provides
benefit to American consumers from U.S. tariff reduc-
tions. Con.sumers will enjoy reduced prices on imported
goods and also on American products that compete with
imports. If the full reduction is passed on, for instance,
the 50-percent drop in tariffs on wooden furniture is
the equivalent of price reductions of 5 to 10 percent.
Further, in the climate of more liberal trade, foreign
producers will be encouraged to market new products
to American consumers.

Adju.itment Strains. A full evaluation of the impact
of the Kennedy Round must recognize that there may
be some adverse effects as well. The increases in im-
ports resulting from reduced U.S. tariffs can cau.se
di.scomfort for certain American industries. Imports,
however, still amount to only 3 percent of our GNP,
and can hardly pose insuperable adjustment problems,
even in the short run. The overwhelming majority of
American industries that face brisk competition from
imports can adjust in stride. American business knows
how to respond to shifting domestic and international
competitive pressures, and its responses are generally
beneficial to the entire economy. But a few American
industries may need help to meet the competitive chal-
lenge ; and that aid should be given through temporary

Government support to improve efliciency. Adjustment
as.sistance is essential to meet the limited costs the
Kennedy Round may impose in a few areas while
maintaining its large benefits for the entire Nation.

Legislative Tasks

The 1962 act provided for adjustment assistance in
cases of injury arising from tariff reductions, but the
legislated criteria for eligibility have proven to be
excessively restrictive. These criteria can and should be
liberalized without opening the door to possible abuse,
and the President is asking for the necessary con-
gres.sional action to this effect.

Assistance for workers includes the payment of re-
adjustment allowances directly to those who are obliged
to seek alternative employment as a result of tariff re-
ductions. The allowances can also be paid while
workers are taking part in on-the-job training. The
Government can also provide for testing, counseling,
training, and placement services to promote a swift and
smooth transfer. Adjustment assistance can be pro-
vided to injured firms to ijermit them to adapt their
product lines or lower their costs in order to meet new
competitive conditions. Such a solution within the
affected firms is particularly desirable because it avoids
dislocation in the employment of workers and in the
use of capital. The offices of the Department of Com-
merce can make technical assistance available. Fi-
nancial aid can be provided through loans or loan
guarantees. Tax relief is offered through extension of
the provisions of the Internal Revenue Code for the
carryback and carryforward of business losses.

A second urgent legislative requirement is the elimi-
nation of the American selling price system. This action
is needed to assure the full benefit of lower chemical
tariffs abroad and to win important concessions on cer-
tain foreign nontariff barriers, as well as to provide the
United States with a uniformly rational valuation
system.

It is essential that Congress not enact legislation
that would reverse or jeopardize our long-term efforts
and policies to promote liberal trade. Bills were intro-
duced into the Congress in 1967 to impose new legis-
lated quotas on textiles, apparel, steel, meat and meat
products, mink furs, lead and zinc, groundfish fillets,
baseball gloves and mitts, consumer electronic prod-
ucts, scissors and shears, hardwood plywood, ferro-
alloys, pota.sh, flat glass, ball and roller bearings, and
stainless steel flatware. Other bills sought to tighten re-
strictions on petroleum and petroleum products and
dairy products. The value of the imports covered by
specific bills amounts to over $6 billion. If general quota
provisions were adopted along lines proposed in some
bills, $12 billion or more of imports would be affected.

If enacted, quota bills could severely harm our econ-
omy in several ways. Quotas would deprive American
producers and consumers of flexible import supplies
that help to moderate shortages. Quotas also would
exert upward pressures on prices at a time when price
stability is a critical national objective. Furthermore,
protected American industries would be insulated from
competitive forces abroad. Many of these industries
need the Invigorating influence of foreign competition,
and should not be permitted to relax behind high pro-
tective barrlera

FEBRUARY 26, 1968

297

Table 29. — Growth of exports of less-developed countries
in two selected periods

Percentage change per year In
export value

Export group

1953-54 average
to 1969-60 average

1959-60 average
to 1966-66 average

All commodities

Primary products

Manufactured prod-
ucts

3.5
3.4

4.7

5.9
5.3

12. 6

Source: General Agreement on Tarlfls and Trade.

Finally, and perhaps most seriously, our exports
would certainly suffer from quota restrictions on im-
ports. Some exports would be lost simply because
importing countries would have less foreign exchange.
But more importantly, foreign governments would
surely take advantage of their rights under the GATT
to retaliate against whichever American products they
may choose. In the end, we would have sacrificed the
interests of more efficient industries and businesses for
the sake of protecting less competitive elements in the
economy ; we would have jeopardized the creation of
higher paying jobs in order to preserve low-wage jobs;
and we would have traded international cooperation
for international economic warfare. A move toward
protectionism would also hurt our balance of payments.
The rising trade surplus counted upon to help achieve
payments equilibrium would be Impossible In a world
of widespread trade restrictions. For all of the.se rea-
sons, a liberal commercial policy is the only rational
policy for the United States.

Trade With Less-Developed Countries

It is of vital interest to the United States and other
developed countries that less-developed countries
achieve an adequate rate of economic growth. Probably
the most important way that the developed countries
can support this goal is to maintain healthy rates of
growth of tieir own economies. The higher rate of
growth of the industrialized nations in the 1960's as
compared with the 1950's was a major factor in the
more rapid growth of less-developed countries' exports
(Table 29). But the developed countries can also pro-
mote development of poor nations through their trade
and aid policies.

UNCTAD

The United States wiU soon participate with about
130 other nations in the second session of the United
Nations Conference on Trade and Development
(UNCTAD) in New Delhi. This conference takes as its
starting point the recognition that access to the markets
of the industrialized countries is essential to the eco-
nomic growth of less-developed countries.

The indu.?trialization of a poor country enlarges its
need for foreign exchange. It generates increased de-
mands for goods which can be produced domestically
only at great cost. This is especially true of countries
with small markets, which cannot support the efficient

production of many manufactures, such as basic metals
machinery, and transport equipment. Only seven less
developed countries have gross national products in
excess of $10 billion — less than the output of the State
of Connecticut. But even the larger less-developod
countries must look abroad for their supplies of most
technically complex manufactured goods.

The export performance of less-developed countries
depends in part on the policies followed by these coun-
tries themselves. In the area of manufactured exports,
a few developing nations have been quite successful,
particularly in those goods requiring relatively large
amounts of unskilled labor. Other countries could
probably follow suit if they pursue well-designed
policies to provide education and training for labor,
and to encourage investment in export-oriented
industries.

Realization of the potential also depends on com-
mercial policies of the developed countrie.s. According
to calculations made by the research staff of the
UNCTAD secretariat, the average tariffs on manu-
factured products of particular interest to the less-
developed countries are somewhat higher and were re-
duced somewhat less in the Kennedy Round than the
average rates of duty on other products. Furthermore,
some of the manufactured exports of Interest to less-
developed countries are restrained by quantitative
restrictions and other nontariff barriers.

In order to improve the access of the less-developed
countries to the markets of the industrial nations, the
OECD countries have approved the outline of a scheme
of generalized nonreciprocal tariff preferences to be
granted by all developed member nations to all less-
developed countries. This outline will be presented to
the less-developed countries at the meeting in New
Delhi. It is hoped that the task of working out the
elements of such a preferential scheme can then be
undertaken. The adoption of a system of generalized
preferences would help to check the proliferation of dis-
criminatory preferences and to keep the world trading
community from fragmenting into preferential trading
blocs.

The proposed trade preferences should be viewed as
a supplement to other efforts by advanced nations to
assist the development of poor countries. For many
countries, economic growth and export capabilities re-
quire foreign aid in the form of developmental capital
as well as improved trading opportunities. Foreign aid
from the United States and the encouragement of
increased aid by others — particularly countries in
balance-of-payments surplus — is and will continue to be
an important aspect of U.S. foreign policy. The re-
plenishment of the capital funds of the International
Development Association is currently being negotiated,
and the United States hopes that its resources will be
increased substantially.

Stabilizing Export Earnings

The development programs of less-developed coun-
tries have often been hampered by the uncertainties
arising from wide variations in earnings from primary
products. The uncertainties can be reduced by com-
modity agreements and by special financing arrange-
ments to meet temporary reductions in export earnings.

Commodity Agreements. Most underdeveloped coun-
tries have relied on primary products for the bulk of
their export earnings. A number of these countries have

298

DEPARTMENT OF STATE BULLETIN

had uiifortuiijito oxporiences with their primary prod-
uct exports, either because of export instability, or
because of slow long-tenu growth, or even long-term
deoliue. of export receipts from particular products.

New exports are frcMjuently not introduced even when
the value of traditional exports Is declining. In part,
this is becan.se the natural resources (agricultural
land, mineral depositJ^) on which certain primary ex-
ports are based have few alternative uses. The low skill
level of workers and the technological backwardness of
industry make it difficult for these countries to break
into the market for manufactured goods and some
primary products. Exchange rates and monetary
jjolicies may al.so discourage development of new ex-
ports. It is encouraging to note, however, that in the
1960's some less-developed countries whose main export
products have been stagnant have achieved high rates
of growth of other exports.

Countries experiencing highly fluctuating or de-
clining prices for their exports have attempted to set
up commodity agreements. A typical agreement creates
a buffer stock, which purchases the commodity when
the price falls below a predetermined floor, and sells
from the stock when the price rises above a predeter-
mined ceiling. Such agreements can help primary
producers achieve more stable prices, although they
cannot insure stable export proceeds for individual
countries when supplies var.v. The United States favors
commodity agreements designed to stabilize prices and
stands ready to support efforts by less-developed
countries to move resources out of the production of
commodities In chronic surplus.

Primary producers sometimes attempt through com-
modity agreements to raise prices above the long-term
equilibrium level. They rarely succeed. Maintenance of
a price above long-run cost requires restrictions on
supply ; the necessary export quotas are extremely hard
to negotiate and to enforce.

Financing. Multilateral financing facilities can help
le.ss-developed countries formulate and carry out de-
velopment plans in the face of export uncertainties. A
step in this direction was taken in 19G3 when the IMF
created its comi)en.satory finance facility. Under this
program, as liberalized in 1966. a less-developed country
may borrow for a term of three to five years, up to 50
percent of its IMF quota when its exports fall below a
medium-term trend for reasons beyond its control.
Under new proposals for "supplementary finance",
which will be discussed at UNCTAD, countries ex-
periencing deep or protracted shortfalls disruptive of
development could receive longer term loans on con-
cessional terms.

CONCLUSION

The course of international economic relations in the
iwstwar period jastifies a basic optimism about the
future, but it also suggests that careful action is nee<ied
if this favorable experience is to continue. The gold
exchange standard, reinforced by the Bretton Woods
agreements, has proved to be flexible enough to support
a prodigious expansion of world trade, which was also
Btimulated by a gradual reduction in tariffs and other
restrictions.

Under present circumstances, there is a clear need
for a new demon.stration of the flexibility of the system.

The creation of ade(inate reserves has come to depend
on a deficit in the U.S. balance of payments which has
long been a matter of concern but which now has to be
dealt with decisively. This will require a resolute and
continuing attack on inflationary pressures in our do-
mestic economy and various measures in the field of
international transactions. The present situation calls
for the cooperation of all countries, especially those
with jiersistent surpluses, in bringing about better
equilibrium in international payments. It is also
essential to provide for new reserve assets to supple-
ment gold and the dollar.

There are still many obstacles to overcome before the
international monetary system is fully adapted to the
needs of the present and the foreseeable future, but
fortunately there is increasing awareness that these
obstacles can and must be surmounted through multi-
lateral cooperation. The hopes of the free world depend
on our success in meeting this challenge.

TREATY INFORMATION

Current Actions

MULTILATERAL

Disputes

Convention on the settlement of investment disputes
between states and nationals of other .states. Done at
Washington March 18, 1965. Entered into force Oc-
tober 14, 1966. TIAS 6090.
Signature: Singapore. February 2, 1968.

Maritime Matters

Inter-American convention on facilitation of interna-
tional waterborne transportation, with annex. Signed
at Mar del Plata June 7, 1963.'
Ratification deposited: Paraguay, January 23, 1968.

Oil Pollution

International convention for the prevention of pollu-
tion of the sea by oil, with annexes, as amended
(TIAS 6109). Done at London May 12, 1954. Entere<l
into force for the United States December 8 1961.
TIAS 4900.
Acceptance deposited: Nigeria, January 22, 1968.

Organization of American States

Protocol of amendment to the Charter of the Organiza-
tion of American States. Signed at Buenos Aires
February 27, 1967.'

Ratifications deposited: Guatemala, January 26,
1968 ; Paraguay, January 23, 1968.

Safety at Sea

Amendments to chapter II of the international conven-

' Not in force.

FEBRUARY 26, 1968

299

tion for the safety of life at sea, 1960 (TIAS 5780).
Adopted at London November 30, 19G6.'
Acceptance deposited: Lebanon, January 25, 1968.

Space

Treaty on principles governing the activities of states
iB the exploration and use of outer space, including
the moon and other celestial bodies. Opened for sig-
nature at Washington, London, and Moscow Janu-
ary 2T, 1967. Entered into force October 10, 1967.
Ratification deposited: Iceland, February 5, 1968.

Trade, Transit

Convention on transit trade of land-locked states. Done
at New York July 8, 1965. Entered into force June
9, 1967.2
Ratification deposited: Laos, December 29, 1967.

Wheat

1967 Protocol for the further extension of the Inter-
national Wheat Agreement, 1962 (TIAS 5115). Open
for signature at Washington May 15 through June
1, 1967, inclusive. Entered into force July 16, 1967.
TIAS 6315.

Ratifications deposited: El Salvador, January 15,
1968; Guatemala, January 29, 1968.

BILATERAL

Philippines

Agreement relating to the expansion of banking fa-
cilities at Clark Air Base and Sangley Point Navy
Base. Effected by exchange of notes at Manila Janu-
ary 17 and 23, 1968. Entered into force January 23,
1968.

PUBLICATIONS

Third Volume in Foreign Relations
Series for 1945 Released

The Department of State on February 1 released
Foreign Relations 0/ the United States: Diplomatic
Papers, 19^5, Volume V, Europe (vii, 1,349 pp.).

This volume, the third volume to be published on
United States policy and diplomacy in 1945, includes
documentation" on American relations beginning with
the Netherlands and proceeding alphabetically through
Yugoslavia. A subsequent volume will complete the
documentary account of United States bilateral rela-
tions with the other European states in 1945.

Of particular interest in this volume are corresiwnd-
ence on American efforts to achieve fulfillment by the
Polish Provisional Government of the Yalta and Pots-
dam agreements regarding the future of Poland, ef-
forts of the United States to establish and maintain
democratic governments in Romania and Yugoslavia,
and our attitude toward the Franco regime following
the end of the war. There is also extensive and varied
documentation on U.S. relations with the Soviet Union.

Copies of this volume (Department of State pub-
lication 8343) may be obtained from the Superin-
tendent of Documents, U.S. Government Printing Of-
fice, Washington, D.C. 20402, for $4.50 each.

DEPARTMENT AND FOREIGN SERVICE

Confirmations

The Senate on February 2 confirmed the nomination
of Edward D. Re to be an Assistant Secretary of
State. (For biographic details, see White House press
release dated January 12.)

Designations

Frederic R. Mann, U.S. Ambassador to Barbados,
to be also U.S. Special Representative to each of the
five "states in association with the United Kingdom,"
Antigua, Dominica, Grenada, St. Christopher-Nevis-
Anguilla, and St. Lucia. (For biographic details, see
White House press release dated February 5.)

' Not in force.

2 Not in force for the United States.

Recent Releases

For sale hy the Superintendent of Documents, U.S.
Government Printing Office, Washington, D.C. 20^02.
Address requests direct to the Superintendent of Docu-
ments. A 25-percent discount is made on orders for 100
or more copies of any one puilication mailed to the
same address. Remittances, payahle to the Superintend-
ent of Documents, must accompany orders.

Trade in Cotton Textiles. Agreement with the Philip-
pines. Exchange of notes — Signed at Washington Sep-
tember 21, 1967. Date of entry into force January 1,
1968. TIAS 6344. 12 pp. 10«;.

Whaling. Amendments to the Schedule to the Interna-
tional Whaling Convention signed at Washington De-
cember 2, 1946. Adopted at the Nineteenth Meeting of
the International Whaling Commission, London, June
26-30, 1967. Entered into force October 6, 1967. TIAS
6345. 2 pp. 5(f.

Agricultural Commodities. Agreement with Indonesia —
Signed at Djakarta September 15, 1967. Entered into
force September 15, 1967. TIAS 6346. 17 pp. 15^.

Treaty on Principles Governing the Activities of States
in the Exploration and Use of Outer Space, Including
the Moon and Other Celestial Bodies. Between the
United States and Other Governments— Done at Wash-
ington, London, and Moscow January 27, 1967. Entered
Into force October 10, 1967. TIAS 6347. 89 pp. 30^.

300

DEPARTMENT OF STATE BULLETrN

INDEX February 26, 1968 Vol. LVIII, No. lJfi6

Antigua. Designations (Mann) 300

Congress. I'roblems and Programs in Our Inter-
national Economic Affairs (excerpts from the
President's Economic Report and the Annual
Report of the Council of Economic Advisers) .

Department and Foreign Service

Confirmations (Re)

Designations (Mann) ....

Dominica. Designations (Mann)

£!conomic A£Fairs. Problems and Programs in
Our International Economic Affairs (excerpts
from the President's Economic Report and the
Annual Report of the Council of Economic Ad-
visers)

Educational and Cultural Affairs. Re confirmed

as Assistant Secretary

Grenada. Designations (Mann)

Korea

Secretary Rusk and Secretary of Defense McNa-
mara Discuss Viet-Nam and Korea on "Meet
the Press" (transcript)

Under Secretary Katzenbach Interviewed
"Face the Nation" (transcript) ...

on

Nigeria. U.S. ReaflSrms Support of Nigerian Gov-
ernment (Department statement)

Presidential Documents. Problems and Programs
in Our International Economic Affairs . . .

Publications

Becent Releases

Third Volume in Foreign Relations Series for
1945 Released

St. Christopher-Nevis-Anguilla. Designations
(Mann)

St. Lucia. Designations (Mann)

Treaty Information. Current Actions ....

United Kingdom. Designations (Mann) . . .

279

300
300

300

279

300
300

261
273
278
279

300
300

300
300
299
300

Viet-Nam

Secretary Rusk and Secretary of Defense Mc-
Namara Discuss Viet-Nam and Korea on "Meet
the Press" (transcript) 261

Under Secretary Katzenbach Interviewed on
"Face the Nation" (transcript) 273

Iflame Index

Katzenbach, Nicholas deB 273

Johnson, President 279

Mann, Fredric F 300

McNamara, Robert S 261

Re, Edward D 300

Rusk, Secretary 261

Check List of Department of State
Press Releases: February 5-11

Press releases may be obtained from the Office
of News, Department of State, Washington, D.C.
20520.

No. Date Subject

124 2/6 Rostow : "From Aid to Cooperation :
Development Strategy for the Next
Decade" (UNCT AD statement).

*25 2/5 Program for visit of Jean Rey, Presi-
dent of the Commission of the
European Communities.

t26 2/6 Rusk: student press interview, Feb-
ruary 2.

*27 2/6 Program for visit of British Prime
Minister Harold Wilson.

t28 2/9 U.S.-Czechoslovak civil aviation
talks concluded.

t29 2/10 Rusk: National Association of Sec-
ondary School Principals, Atlantic
City, N.J. (excerpts).

*Not printed.

fHeld for a later issue of the Bulletin.

U.S. GOVERNMENT PRINTING OFFICE 1969

Superintendent of Documents

U.S. GOVERNMENT PRINTING OFFICE
WASHINGTON, D.C. 20402

OFFICIAL BUSINESS

POSTAGE AND FEES PAID
U.S. GOVERNMENT PRINTING OFFICE

THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIC

THE

DEPARTMENT

OF

STATE

BULLETIN

Vol LVIII, No. H97

March 4, 1968

OUR CONCERN FOR PEACE IN EAST ASIA
Address hy Secretary Busk 301

THE UNITED NATIONS AND UNITED STATES FOREIGN POLICY
hy Ambassador Arthur J. Goldberg 306

OUR LATIN AMERICAN POLICY IN THE DECADE OF URGENCY
hy Ambassador Sol M. Linowitz 310

THIRD ANNUAL REPORT ON THE INTERNATIONAL COFFEE AGREEMENT

TRANSMITTED TO CONGRESS
President JohnsorCs Letter of Transmittal and Text of Report 330

TO BUILD THE PEACE— THE FOREIGN AID PROGRAM FOR FISCAL 1969
President Johnson^s Message to Congress 322

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETI

Vol. LVIII, No. 1497
March 4, 1968

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Note: Contents of this publication are not
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The BULLETIN includes selected
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national relations are listed currently.

Our Concern for Peace in East Asia

Address by Secretary Rusk '■

I am glad to have a chance to visit with j^ou
who are preijaring our j^oung people for the
future which will belong to them. That future
is the primary concern of our foreign policy,
and the central object of our foi'eign policy is to
build an enduring peace. Almost literally,
everj-thing we do must be weighed in terms of
whether it reinforces or diminishes the prospect
for a lasting peace.

During these present weeks, our concern for
peace draws our attention to East Asia — to
Korea and to Viet-Nam.

Nearly 18 years ago. South Korea was almost
completely overrun by the invading armies of
North Korea. Six months later Communist
China committed to battle himdreds of thou-
sands of its own troops.

Many thousands of Koreans, Americans, and
other United Nations troops gave their lives
in 3 years of hard fighting before the aggression
from the North was halted by an armistice.
Much of the Kepublic of Korea was devastated.
But the spirit of its people was unbroken. With
resolution and energy — and our help — they set
about the task of national reconstruction. It was
a long and hard, and at times discouraging,
task. But it has been accomplished. ^\j:d, during
the last several years, the Republic of Korea's
gross national product has increased by from 8
to 10 percent annually, one of the highest rates
in the world. I have visited the Republic of
Korea four times as Secretary of State. On each
occasion I have seen visible signs of further
progress and rising confidence in the future.

The Republic of Korea has not only moved
ahead economically and politically but has come
to be a leader in regional cooperation. It took
the initiative in forming the Asian and Pacific

' Made before the National Association of Secondary
School Principals at Atlantic City, N.J., on Feb. 10
(press release 29). The Secretary also made extem-
poraneous remarlis.

Council of 10 nations, which held its first min-
isterial meeting in Seoul in 1966 and its second
in Bangkok in 1967.

The Republic of Korea is a large contributor
to the security of East Asia and the Western
Pacific. Its armed forces stand shoulder to
shoulder with ours on the northern rampart of
freedom in Asia. Its leaders and people realize
that the security of other free nations in Asia
is vital to their own, and they have not for-
gotten that when they were the target of ag-
gression, others came to their aid. They have
sent 50,000 soldiers and marines to South Viet-
Nam — splendid troops, whose valor and skill
have earned the deep respect of all their com-
rades in arms, and of the Vietnamese
Communists.

Last year the North Koreans stepped up
sharply their infiltrations into South Korea —
from about 50 incidents in 1966 to about 570 in
1967. Recently they sent in a group of about 30
highly trained officers for the purpose of
assassinating President Park of the Republic
of Korea and the American Ambassador.

North Korean Seizure of the Pueblo

Then, on January 23, North Korea seized the
Puehlo in international waters. This may or
may not have been part of the North Korean
program for trying to intimidate the South
Koreans, disrupt their progress, and divert
South Korean and American armed forces from
South Viet-Nam.

The Puehlo is an intelligence-gathering ship,
one of a number of such vessels which we and
the Soviet Union and others have long had on
the high seas. The Soviet Union has had such
ships operating along both our east and our west
coasts, off Guam, and near our naval task forces
in the Mediterranean, the Western Pacific, and
elsewhere.

301

In a genuinely peaceful and open world these
operations would not be needed. In the world of
today they are essential. They are especially
important to us because our adversaries have
closed societies. They don't publish the sort of
facts that the Communists know about our mili-
tary disposition simply from reading news-
papers and department and committee reports.

There is not a scrap of evidence to indicate
that the Pueblo was at any time inside the 12-
mile limit which North Korea claims as terri-
torial waters. It was under strict orders to stay
outside the 12-mile limit. It was outside that
limit when it was intercepted and seized. We
know that not only from our own data but from
intercepted North Korean messages.

The most essential fact is that, under accepted
international law, North Korea had no right to
seize the Puehlo either on the high seas or in
territorial waters. The convention on the law of
the sea, adopted in 1958, makes it entirely clear
that, if any wai-ship comes inside territorial
waters, the coastal state can require it to leave
but does not have the right to seize it.^ At least
three times in recent years Soviet war vessels
have come inside our territorial limit of only
three miles. We didn't seize them; we simply
required them to depart.

So this North Korean action was a very grave
violation of the law and practice of nations.

The President's first concern has been to re-
cover the crew and the ship. And he has hoped
to avoid a renewal of major warfare in Korea.
So, while taking various precautionary meas-
ures, he has been seeking to obtain the return of
the crew and ship by peaceful means.'

We asked the International Bed Cross to in-
tercede on behalf of the crew, and it agreed to
do so.

We have asked many other nations to cooper-
ate with our efforts to recover the crew and ship
by peaceful means.

At our suggestion, an emergency session of
the United Nations Security Coimcil was
convened.'*

Then the North Koreans said the matter was
not within the jurisdiction of the United Na-
tions but should be discussed through the Mili-

'For text of the Convention on the Territorial Sea
and the Contiguous Zone, see Buxletin of June 30,
1958, p. 1111.

"For President Johnson's address to the Nation on
Jan. 26 and other U.S. Government statements, see
WA., Feb. 12, 1968, p. 189.

• For background, see iUd., p. 193.

tary Armistice Commission at Panmunjom. We
have been meeting with them there, so far with
very little result. They have given us the names
of the one member of the crew who was killed
and of three who were injured — that is all.

There are 50,000 American troops in the Re-
public of Korea. The President has taken steps
to strengthen our forces in the area, without di-
minishing our forces in South Viet-Nam.

North Korea will make a grave error if it in-
terprets our restraint as a lack of determination
or deludes itself into thinking that the Ameri-
can commitment to defend the Republic of
Koi'ea has weakened in the slightest.

The Communist Offensive in Viet-Nam

Now, I turn to Viet-Nam.

About 12 days ago, the Communists launched
a major offensive.

For months we had been receiving informa-
tion about this winter-spring offensive. We had
indications that it would combine two main
elements :

— terrorist attacks in the cities ; and
— a massive assault by North Vietnamese
regular divisions across the north and north-
west frontiers of South Viet-Nam.

The objective of this dual offensive was to try
to convince the South Vietnamese and their
allies — and governments and peoples in other
parts of the non-Communist world — that the
South Vietnamese cause is hopeless, thus pre-
paring the way for a peace-at-any-price settle-
ment— a settlement providing for a coalition
government dominated by Communist leaders.
There is strong evidence that they really ex-
pected the offensive not only to paralyze gov-
ernment in South Viet-Nam but to bring down
the administration elected last year.

Ho Chi Minh and the Central Committee of
the Communist Party in Hanoi directed the
Communist headquarters in South Viet-Nam
"to carry out the General Offensive and the gen-
eral uprising, in order to gain a decisive victory
for the revolution during the 1968 Winter-
Spring phase." This quotation is from a cap-
tured document.

We knew the offensive was coming, but we
didn't know precisely where and when each part
of the attack would come.

The attacks, as you know, have been wide-
spread and coordinated. They have caused sub-
stantial casualties among civilians as well as

302

DEPARTMENT OF STATE BULLETIN

among: fighting men. And they have led to sub-
stantial damage to property in some cities and
left many thousands homeless.

Costs and Losses on Communist Side

I do not minimize the costs to the Allies, but
some of the accounts I have heard and seen have
paid little attention to the costs and losses on
tlie Commiuiist side-
Let me cite a few pertinent facts :
— Many of the Communist units had been as-
sured tliat the people in the cities they were to
enter would rise up and support them. The Com-
munists proclaimed that they were setting up
Eevolutlonary Coimcils to govern various cities.
We have reports that in some instances they had
military government cadre with them or near at
hand. The Communists attacked 39 provincial
capitals and more than 70 district capitals.
There was no popular uprising anywhere. The
Communists were not able to hold any of those
capitals. Not even one Revolutionary Council
was actually set up.

— The Commmiists paid a terrible price in
casualties, many times the casualties on our side.
They lost more men in one week than we ha\e
lost since our involvement in Viet-Nam.

— With very few exceptions. South Viet-Nam
troops fought with courage and persistence.
Their record in the last 12 days should lay to
rest once and for all the myth that the South
Vietnamese troops won't fight.

— Some people have expressed disbelief that
so many Communists could enter the cities with-
out being noticed by South Vietnamese police
and civilians. They have asserted that, if loyal,
the Soutli Vietnamese civilians would have in-
formed their military forces. Such observations
fail to take account of the fact that most of the
Communist infiltrators wore civilian clothes or
South Vietnamese army uniforms and mingled
with the thousands of South Vietnamese who
were flocking into the cities to celebrate Tet,
the lunar New Year. Some of them carried bun-
dles containing arms. Others picked up arms
which had been hidden — in some cases two or
more years ago.

— In launching their onslaught on the cities
during Tet the Communists violated the most
important religious holiday in Viet-Nam, and
most particularly the injunction against settling
grudges during the first 3 days of the New Year
observance. In the main, both sides had observed
Tet for years. Nevertheless, all U.S. forces and

many South Vietnamese units were on alert be-
fore the attacks started. But the deliberate
wholesale violation of a sacred holiday has
incensed the South Vietnamese.

— The North Vietnamese radio has broadcast
false reports about the defection of various
units of the South Vietnamese armed forces.
None has, in fact, defected. And one unit wliich
the Hanoi radio specifically said had defected
was at that very time fighting with marked
valor.

— The families of provincial chiefs and of
other officers in the South Vietnamese forces
were special targets of the Viet Cong. Many
v/ere slaughtered in cold blood or kidnaped.
The objective was intimidation — or perhaps in
some cases to induce officers whose families were
kidnaped to defect. But the principal harvest
is deep anger.

— Not only was there no uprising, not only
was the Government of South Viet-Nam not
toppled, but not a single well-known South
Vietnamese rallied to the Communist side. Both
Houses of the Assembly elected last year
promptly passed resolutions denouncing the
Viet Cong and calling on the people of South
Viet-Nam to support their Government. So did
labor leaders — of both national unions and the
Saigon Council — and many other important
groups and individual citizens. Among them
was Dr. Phan Khac Suu, former Chief of State
and a candidate for President last year against
General Thieu. There were indications that the
Communists had hoped to induce him to head a
revolutionary regime. But he publicly de-
nounced the Viet Cong and urged support of
the national government.

— Two weeks ago about 65 members of the
faculty of Saigon University called for an end
to the warfare. Thursday of this week a state-
ment on behalf of the entire faculty denounced
the sacrilege and brutality of the Communist
offensive.

— The South Vietnamese Government has set
up a task force under Vice President Ky to deal
with refugees and other urgent problems. The
lower House has designated a Member to serve
on it, and other groups will be represented.
More than 70 refugee centers are already oper-
ating in Saigon, and food is being distributed
throughout the city.

— Yesterday, President Thieu forcefully ad-
dressed his people. He reaffirmed his govern-
ment's intention to continue to "build democ-
racy, seek a solution to (the) war, and construct

M.\RCH 4, 1968

303

(the) nation." To help accomplish this, he an-
nounced plans for an increased and more rapid
mobilization, to include the recalling of veterans
with less than 5 years' service, as well as to
provide military training to students 17 years
of age and up. He emphasized that he is taking
these measures within the constitutional frame-
work and expects to cooperate fully with the
Legislature.

There are indications that the Communists
will launch a second attack on some cities in the
near future. The offensive in the north is still in
its early stages. General Westmoreland [Gen.
William C. Westmoreland, Commander, U.S.
Military Assistance Command, Viet-Nam] and
our Joint Chiefs of Staff are confident that it
will not succeed.

It is pertinent to note that in the offensive
against the cities. North Vietnamese Regulars
were deployed to fill out undermanned Viet
Cong units as far south as Saigon. It is time —
and past time — for those who have long as-
serted that this is just a "civil war" to recognize
that that notion is a myth. There are genuine
South Vietnamese who are bearing arms against
their Government. But that is not why we are
there. We have combat forces there because of
the invasion from the North.

Over a period of several years, there has been
mounting evidence that the Viet Cong have
very little following outside their own ranks.
The principal groups in South Viet-Nam have
indicated repeatedly in many ways that, al-
though they disagree among themselves about
many things, they don't want the sort of regime
the Communists are trying to impose on them
by force. I am sure that the people of South
Viet-Nam want peace, but we have seen no indi-
cations that they want peace at the price of
Communist rule.

U.S. Efforts To Move Toward Peace

The winter-spring Communist offensive
should be viewed against President Johnson's
persistent efforts to bring Hanoi to the con-
ference table. Recently, we deescalated our
bombing of North Viet-Nam, especially in the
immediate vicinity of Hanoi and Haiphong.
Our purpose was to make it easier for Hanoi to
consider the formula which President Jolmson
set forth in his address at San Antonio.^

The San Antonio formula said that we would
stop the bombing when that would lead

• For test, see ihid., Oct. 23, 1967, p. 519.

I^romptly to productive discussions and that we
assumed that Hanoi would not take advantage
of this cessation of bombing while such discus-
sions were going on. It is hard to imagine a
more reasonable proposal from a nation in-
volved in anned conflict.

There were those, both in tliis country and
abroad, who urgetl us to go further — to cease
altogether bombing of the North. Many of
them said that the United States is strong
enough to "take risks" for peace. Now, what
does that mean when translated into practical
terms on the ground ? It means additional cas-
ualties for our troops and our allies. We are
strong, all right, but the life of every one of our
fighting men is precious to us.

After months of hostile public replies, the
Foreign Minister of North Viet-Nam said that
a cessation of the bombing will lead to talks.
But that left a good many key questions unan-
swered : Would the talks begin promptly, what
would be discussed, and so forth ? So we set out
to find out what really was in the minds of the
North Vietnamese. They also knew that, as in
previous years, we would be interested in trying
to convert a Tet cease-fire into a productive
move toward peace.

Our diplomatic explorations continued right
up to the moment the Communists launched
their offensive 12 days ago. Meanwhile, they had
been preparing this major onslaught.

Despite that, we are not withdrawing any of
the proposals to which Hanoi has said "no" : our
14 points," the 28 proposals of our own or of
others which we have accepted,^ the San An-
tonio formula. All these remain on the table,
awaiting the day when Hanoi realizes that it
will not be permitted to take over South Viet-
Nam by force and decides to make peace.

Meanwhile, this is a time of trial for the
South Vietnamese and their allies — it may well
be the climactic period of the struggle in South-
east Asia. This is the kind of test which sepa-
rates the timid from the intrepid, the weak
from the strong. Beyond doubt, our magnificent
fighting men and their comrades in arms will
pass this test with flying colors. And I believe
that, despite the voices of doubt and despair
here and there, Americans on the home front
will rise to the occasion, as they have done so
often in the past. If the home front stands up
to the test half as well as the men on the front
line, there will be no question about the outcome.

' Ibid., Feb. 20, 1967, p. 284.

' For background, see md., May 22, 1967, p. 770.

304

DEPARTMENT OF STATE BULLETIN

Secretary Rusk Reports on Hanoi's
Rejections of U.S. Peace Proposals

Statement hy Secretary Rusk *

Questions have been asked about the con-
nection between the possibility of negotiations
for a i^eaceful settlement in Yiet-Nam and the
military operations now in progress. It should
be obvious that there is a connection, since both
are involved in moving from hostilities to peace.

Hanoi has repeatedly refused to take steps
to reduce the scale of violence in Southeast Asia.
They have refused to respect the territorial in-
tegrity and neutrality of Cambodia, despite
intensive international effort to respond to
Cambodia's own wishes in the matter.

Hanoi has repeatedly rejected any efforts to
bring about a full compliance by all parties
with the Geneva accords of 1962 on Laos. Today
their forces are increasing their operations in
Laos itself and are stepping up their illegal in-
filtration through Laos into South Viet-Nam.

Hanoi has treated with contempt the demili-
tarized character of the demilitarized zone be-
tween North and South Viet-Nam and has
rejected all efforts to restore the demilitarization
of that area.

Repeated periods of bombing cessation or re-
duction in North Viet-Nam have elicited no
corresponding action by North Vietnamese
forces in South Viet-Nam. Quite the contrary,
such periods have been used to build up their
military forces in South Viet-Nam. Cease-fire
periods have been marked by hundreds of
conical violations by North Vietnamese and
Viet Cong forces — and on a massive scale dur-
ing the recent Tet holidays.

At no time has Hanoi indicated publicly or
privately that it will refrain from taking mili-
tary advantage of any cessation of the bombing
of Noi'th Viet-Nam. Nor has it shown any in-
terest in preliminary discussions to arrange a
general cease-fire.

In recent weeks Hanoi knew that discussions
of a peaceful settlement were being seriously
explored; thev also knew that there was a re-
duction of bombing attacks on North Viet-Nam,

specifically in the Hanoi and Haiphong areas
during these explorations. Their reply was a
major offensive through South Viet-Nam to
bring the war to the civilian population in most
of the cities of that country. Their preparations
for a major offensive in the northern Provinces
of South Viet-Nam continue unabated.

In assessing, therefore, whether Hanoi's al-
leged interest in political talks has anything
to do with making peace, one must take into
full account the negative meaning of their
recent escalation. The President declared in his
state of the Union message ^ that he would con-
tinue to explore the possibilities of negotiation
and would repoi-t the results. I must report that
all explorations to date have resulted in a re-
jection of his San Antonio formula.^

All of the projwsals made by the United
States for peace in Southeast Asia continue to
be valid ; specifically, the San Antonio formula
put forward by President Jolmson in Septem-
ber remains the basis of our position.

We are not interested in propaganda gestures
whose purpose is to mislead and confuse; we
will be Interested in a serious move toward
peace when Hanoi comes to the conclusion that
it is ready to move in that direction. Hanoi
knows how to get in touch with us.

U.S. To Resume Shipments
of Arms to Jordan

Department Statement *

We have decided to resume arms shipments
to Jordan, as we have done in the case of other
Near Eastern countries.^ Details are now being
negotiated with the Jordanian Government. We
continue to believe that restraint on all arms
shipments to the area is essential to stability in
the area.

^ Read to news correspondents by the Department
spokesman on Feb. 14 (press release 32).

- Bulletin of Feb. 5, 1968, p. 161.

' For an address made by President Jolm.son at San
Antonio, Tex., on Sept. 29, 1967, see ihid., Oct. 23, 1967,
p. 519.

' Read to news correspondents by the Department
spokesman on Feb. 14.

' For a Department announcement of Oct. 24, 1967,
see Bulletin of Nov. 13, 1967, p. 6.52.

MARCH 4, 19G8

305

The United Nations and United States Foreign Policy

hy Arthur J. Goldberg

United States Representatwe to the United Nations ^

It is as true today as it was when George
Washington wrote his Farewell Address that,
in his words, "The unity of government which
constitutes you one people ... is a main pillar
in the edifice of your real independence, the
support of your tranquillity at home, your
peace abroad, of your safety, of your pros-
perity, of that very liberty which you so highly
prize."

To me, of course, working as I have in the
international field for the past 2i/2 years. Presi-
dent Washington's advice carries particular
application to America's relations abroad and
to our search for security in this turbulent and
unruly world. I would therefore like to con-
sider with you what lessons our American for-
eign policy can still draw from that famous
Farewell Address written at the end of the 18th
century.

For quite some years the fashion has been to
consider Washington's Farewell Address as a
counsel of isolationism. I do not share that
view. Obviously, some important points m the
address which were true in 1797 are no longer
true in 1968. It can no longer be said, for ex-
ample, that "Europe has a set of primary in-
terests which to us have none or a very remote
relation." And in this age of thermonuclear
rockets, no nation in the world, even behind
the widest oceans, can ever again describe itself
as enjoying a "detached and distant situation."

Nevertheless, that celebrated address still
provides for the foreign policy maker of our
day wise counsels which have withstood the

' Address made before a joint session of the General
Assembly of Virginia at Richmond, Va., on Feb. 8
(U.S./U.N. press release 16).

passage of time and revolutionary change. Par-
ticularly is this true of Washington's warning
that "pennanent, inveterate antipatliies against
particular nations and passionate attachments
for others should be excluded." We do well to
remember this truth as we contemplate the
changes in the antagonisms and alliances to
which we have gi-own accustomed in the past
20 years. Rather than indulge in passionate
attachments or antipathies, we would be wisest
to stick to Washington's rule: "Observe good
faith and justice toward all nations."

It is a tribute to Washington's wisdom that
the same universal rule of foreign policy which
he expounded also lies at the heart of that great
document of our own time, the Charter of the
United Nations. The primaiy purpose pro-
claimed in that document is to maintain inter-
national peace and to settle the disputes of na-
tions justly, in conformity with international
law. That is the purpose for which member states
are pledged to harmonise their actions.

It may seem Utopian to refer to these lofty
aims at this moment when the relations among
nations, far from being "harmonized," are
marred by much discord and violence. At the
U.N. in the past 12 montlis alone, we have sought
to deal with no less than four major crises : the
war in Viet-Nam, the renewed fighting in the
Middle East, a near-war in Cyprus, and, now,
seizure of the Pueblo on the high seas and other
aggressive acts by North Korea in violation of
the Korean Armistice Agreement.

Our experience with these four points of
world tension and trouble illustrates clearly both
what the United Nations can do and what it can-
not do. Even more, they demonstrate that the '
United Nations must become stronger and more

306

DEPARTMENT OF STATE BULLETIN

effective if it is to realize its great aim of peace
and justice.

Let me comment briefly on the U.N.'s record
in each of these situations.

The Search for Peace in Viet-Nam

In tlie case of Viet-Nam, our own Govern-
ment, and I personally as the United States Rep-
rasentative, have sought repeatedly and vigor-
ously for over 2 years to enlist the United
Nations Security Council in the search for a just
and honorable peace. Our efforts have been frus-
trated largely by the negative attitudes of cer-
tain members — particularly the Soviet Union,
which possesses the veto power and has strongly
opposed any U.N. involvement in this matter —
as has North Viet-Nam itself.

This situation, if I may add a pereonal note,
has been the greatest source of frustration and
„ disappointment in my 2I/2 years at the United
" Nations. Of course, we have not abandoned our
efforts, but in candor I must report that we have
: no present basis for expecting positive results
II through the Security Council in the near future.
But let no one suppose that our failure to en-
list the Security Council in the quest for peace
in Viet-Nam means that we have not vigorously
continued to explore other diplomatic avenues to
that goal. Our purpose is and always has been
peace. As far as the United States is concerned,
the door to a peace settlement remains open. But
passage through it cannot be forced; it can be
passed only through reasonable negotiations.
Last September, with the full authority of the
United States Government, I said in the United
Nations General Assembly : ^

A military solution Is not the answer. For our part,
we do not seek to impose a military solution on North
Viet-Nam or on its adherents. By the same token. In
fidelity to our commitment to a political solution, we
will not permit North Viet-Nam and its adherents to
impose a military solution upon South Viet-Nam.

That continues to be the policy of the United
States Government.

Now I turn to the Middle East, an area in
which, unlike Viet-Nam, the United Nations has
been continuously and officially involved for 20
years.

For 11 years, from the Suez crisis until last
spring, U.N. peace forces had maintained an

uneasy and fragile annistice in tliat area. The
U.N. was unable to prevent the outbreak of war
last June; but it did make an important con-
tribution to bringing about a cease-fire after 6
days of full-scale fighting, and without a con-
frontation between the major powers.

That cease-fire is still in effect, policed by
U.N. observers — although its several violations
have given us serious concern. It is the objective
of American policy that the nations of the Mid-
dle East should progress beyond that fragile
cease-fire and find the terms of living together
in stable peace and dignity. The Security Coun-
cil last November imanimously decided on the
dispatch to the area of a special representative
with a mandate to help the parties to move in
this direction.^ This representative. Ambassador
[Gunnar] Jarring of Sweden, is in the area
now. His task is bound to be difficult and ardu-
ous ; but it is in the interest of all the parties, and
indeed of the world commimity, that he should
succeed.

Cyprus is still another area in which the
United Nations has been inlaying a key role for
some years, including the maintenance on the
island of an international peace force of some
5,000 men. In addition, the U.N. has been of con-
siderable diplomatic importance. The fact that
the tensions and incidents between the Greek and
Turkish commmiitics did not explode into open
war in recent months is due both to the out-
standing w^ork of the President's envoy, Mr.
Cyrus Vance, and to the constant diplomatic
activity of Secretary-General U Thant and the
efforts of members of the Security Council.

Seizure of the Pueblo

Finally, I come to the most recent crisis : the
illegal seizure of the Pueblo and its crew and the
aggressive acts of North Korea against South
Korea in violation of the Korean Armistice
Agreement, including the flagrant attempt to as-
sassinate President Park of the Republic of
Korea.

In this situation the U.N. has served two use-
ful i^urposes. It provided, as it often does in
such cases, a breathing spell and a starting point
for diplomatic efforts elsewhere, which are
now underway. And it also provided an open
forum — the Security Council — in which we

' Bulletin of Oct. 16, 1967, p. 483.

' For background, see ifttd., Dec. 18, 1967, p. 834.

MAKCII 4, 196S

307

could state our case before the bar of world
opinion.

In my presentation to the Security Council,^
I addressed myself to the basic pretext ad-
vanced by North Korea for seizing the Pueblo :
namely, that the ship was in North Korean ter-
ritorial waters when approached and seized. I
demonstrated by incontrovertible evidence — in-
cluding the radio messages transmitted by the
North Korean vessels that seized the Pueblo^
which we monitored — that the Pueblo when
first approached, and when seized, was in inter-
national waters well beyond the 12-mile limit;
that it had not fled from territorial waters im-
der hot pursuit; and that the North Koreans
themselves knew all this to be true. This was an
accurate statement when I made it ; it is an ac-
curate statement today; it is the conclusion of
all in authority in our Government; and
nothing credible has come to light to controvert
it.

In my statement to the Council I went on to
make clear three important points of United
States policy in regard to this incident :

First, the seizure of the Pueblo on the high
seas and the forcible detention of the ship and
her crew are not acceptable to the United
States. They constitute a knowing and willful
aggressive act m contravention of international
law.

Second, in our efforts to obtain redress, the
United States wishes to give all possible scope
to the processes of peaceful action, processes
which are greatly to be preferred to other reme-
dies which are reserved to all nations under in-
ternational law and under the Charter of the
United Nations.

Third, our objective from the outset has been,
and continues to be, to obtain the prompt re-
lease of the ship and her crew. Our Govern-
ment will not rest until they are safely home.

The U.N.'s Capabilities and Limitations

The four international conflict situations I
have discussed illustrate certain truths about
the United Nations, about its capabilities and
its limitations in the search for a more peaceful
and stable world. In the Middle East and Cy-
prus it has achieved partial but important suc-
cesses in preventing or limiting violence. It has
been useful also in the Pueblo situation in the
ways I have indicated. In other situations,

• lUa.., Feb. 12, 1968, p. 193.

above all, Viet-Nam, even tliis limited role has
been denied it, chiefly because of the negative
attitude of a major power.

But in addition to these limitations, a more
basic shortcoming must also be faced. The
United Nations, even when it is able to contain
and suppress violence, has yet to show the ca-
pacity to deal with the underlying grievances
and pressures from which violence erupts. No
enduring peace settlements are possible that
do not relieve these pressures. This is one of the
major future challenges to the United Na-
tions— and hence to its members, who hold the
U.N.'s fate in their hands.

We cannot be content simply to keep what
peace we have and restore it when it is broken.
We must devote our highest statesmanship to
building the peace which we do not yet have.
The United Nations this past year has again
demonstrated a limited capacity for peacekeep-
ing. It has still to show adequate capacity for
peacemaking. Until the necessary effort is made
to develop this capacity, the world community
and all its members, strong and weak alike, will
remain dangerously insecure.

But whatever the U.N.'s defects may be, one
thing should be clear : Our country, in its own
interests, cannot afford to slacken its support
of this world organization which is so much
our own creation. On the contrary, there is no
realistic alternative to the United Nations. If
it did not exist, something like it would have
to be created. And having been created, it must
be made to work.

Tliere is no mystery about what is needed.
The United Nations works very well whenever
it is supported by the common will of its mem-
bers. Without that common will, it cannot
realize its full promise.

In forging such a common will, a particu-
larly heavy responsibility lies on the great
powers — including, above all, the United States
and the Soviet Union. This truth was clearly
recognized over 20 years ago by that great Vir-
ginian, soldier, and statesman, George C. Mar-
shall, who as Secretary of State said to the U.N.
Assembly in 1947 : °

. . . the Great Powers must recognize th.it restraint
is an essential companion of power and privilege. The
United Nations will never endure if there is insistence
on privilege to the point of frustration of the collective
will. . . .

The Government of the United States believes that

' Ihld., Sept. 28, 1947, p. 618.

308

DEPARTMENT OF STATE BULLETIN

the surest foundation for iicrnianent peace lies in the
extension of the benefits and the restraints of the rule
of law to all peoples and to all governments. Tliat is
the heart of the Charter and of the structure of the
United Nations. It is the best hope of mankind.

Tliat advice of General Marshall's is as sound
today as it was when he delivered it. We Ameri-
cans especially, as a great world power, should
be constantly mindful of his plea for "the bene-
fits and the restraints of the rule of law"; and
we should patiently persist in our efforts to
bring the same truth home to the other great
world power, the Soviet Union — and, indeed,
to all powers. For until all powers, great and
small, recognize that their security depends on
the extension of the rule of law, its restraints
as well as its benefits, the world will remain
insecure.

And as long as this insecurity persists, we
will have little choice but, as President Wash-
ington expressed it, "to keep ourselves by suit-
able establislmients on a respectable defensive
posture." But let nobody deceive himself as to
the degree of true national security which mili-
tary defensive power confers. One of our wisest
career ambassadors, my former colleague at the
United States ]Mission, Charles W. Yost, has
warned in a recent book "The Insecurity of
Xations," that nations will never know real
security until they acknowledge some impartial
and effective international agency, designed to
keep the peace, restrain aggression, control na-
tional armaments, negotiate peaceful settle-
ments, and facilitate peaceful change and the
redress of just grievances. Single states, how-
ever strong, cannot attempt these tasks by them-
selves without raising up rival forces and
genei'ating the very insecurity they seek to end.

The United States is not exempt from this
rule. It should not be the American aim to im-
pose a pax Americana on the world — any more
than we would allow an alien rule to be imposed
on us.

The central challenge to our foreign policy in
this nuclear age is to organize a system of inter-
national security which will render any uni-
lateral solution unnecessary. This system will
not be created quickly, but it must be our steady
aim to bring it into being.

Adlai Stevenson once said : "Survival is still

an open question." And he enjoined his fellow
countrymen to act in the light of this simple
thought : "that the human race is a family, that
men are brothers, and all killing is fratricidal,"
This is not visionary talk. It is the highest
realism, and we Americans in all walks of life
must act upon it in the dangerous years ahead
with all the perseverence and imagination and
skill we possess.

President Meets With U.S. Section
of U.S.-Mexico Border Commission

The '\Yliite House announced on February 3
that President Jolmson had met the day before
with the U.S. Section of the United States-
Mexico Commission for Border Development
and Friendship to review the group's progress
and its plans for 1968.^

The Commission was formed in 1967 as a re-
sult of a decision reached during President
Johnson's \'isit with President Gustavo Diaz
Ordaz of Mexico in April 1966 to establish a
mechanism to help the people in the border
areas of the two nations improve their living
conditions.^ The Commission is engaged pri-
marily in projects aimed at creating job oppor-
tunities, urban planning and development,
technical and skills training, cultural and com-
munity services, health and sanitation, and rec-
reation and sports.

The U.S. Section is chaired by Ambassador
Raymond Telles of El Paso, Tex., and is com-
posed of representatives at the Assistant Sec-
retary level, or above, of 10 Federal departments
and agencies. The Mexican Section is similarly
constituted, and Sr. Jose Vivanco is chairman.

The full Connnission, which met first in Oc-
tober of 1967 in Mexico City, will have its next
meeting in Washington, May 1, 2, and 3.

' For highlights of the report submitted to President
Johnson by the U.S. Section, see White House press
release dated Feb. 3.

^ For test of a joint statement released at the close of
President .Johnson's visit, see Bulletin of May 0, 10G6,
p. 731.

MARCH 4, 10 68

Our Latin American Policy in the Decade of Urgency

6y Sol M. Linowitz

U.S. Representative to the Organization of American States ^

There was a jjeriod not too long ago when
Latm American policy was a malieshift affair,
when our chief foreign policy interests focused
on virtually every area of the world except the
one closest to us geographically, historically,
and traditionally. Today our policy is no longer
a stopgap action, a hurried response to an ex-
plosive situation, but a policy that has taken its
place among this nation's most vital commit-
ments. For we know that by helping Latin
America to modernize and become economically
stable and viable we help ourselves and the en-
tire course of freedom and democracy. In a day
of widespread and unprecedented demand on
our resources and will, it is second to none any-
where.

Wlien I was last here 10 months ago,^ I had
just returned from Punta del Este, where I had
accompanied the President to the Summit Meet-
ing of American Presidents. I said at the time
that I thought the decisions taken there to inte-
grate the economy of the continent and to re-
invigorate the Alliance for Progess marked a
milestone in the development of the inter- Amer-
ican community. In retrospect, I believe I un-
derstated it.

It was at Punta del Este that the President, in
speaking of the proposed Common Market, re-
emphasized that if the Latin American states
would move with boldness and determination
toward that goal, the United States would be at
their side.^ Thus our participation in hemi-

' Excerpts from an address made before the National
Press Club at Washington, D.C., on Feb. 14 (press re-
lease 31).

" Bulletin of May 8, 1967, p. 729.

'For statements by President John.son and text of
the Declaration of Presidents of America signed at
Punta del Este, Urugua.v, on April 14, 1967, see iUd., p.
706.

sphere affairs is now projected more fully than
ever before as a shared, multilateral, coopera-
tive endeavor in which we are at the side of the
people of Latin America as they take the lead-
ership in their struggle against economic and
social injustice and in their effort to build demo-
cratic societies responsive to the will of the peo-
ple.

It is a policy which views the Alliance as part
of a long and deeply rooted tradition embodying
the basic principles of a new society, as set forth
in the Charter of Punta del Este.*

It is a policy which i-ecognizes that the prob-
lems faced by the people of New York, Chicago,
and Los Angeles differ only in degree from
those confronting the people of the large cities
of Latin America and that the Alliance must,
therefore, be part of a continentwide effort in
which the people of all the countries— North and
South alike — learn from each other even as they
help each other.

It is a policy in which we are cooperating
with a multinational group — the OAS Inter-
American Committee on the Alliance for Prog-
ress, or CLAP (as it is known from its initials
in Spanish) — in laying down criteria for the
allocation of Alliance funds, including our own.

It is a policy which recognizes that so long as
there remain in the Americas people without
jobs, families without roofs, children without
schools, there is much for us all to do.

It is a policy which seeks to make education
the deep concern of all, recognizing, in the words
of Edmund Burke, "that a nation which seeks to
be both ignorant and free, seeks what never was
and never can be."

It is a policy which extends to the political
aspect of our relationship as well. United States

* For text, see iUg., Sept. 11, 1961. p. 463.

310

DEPARTMENT OF STATE BULLETIN

policy toward Cuba, for example, adheres to the
hemisphere policy shaped by the OAS at several
meetings of foreign ministers since 1961.

It is a policy which, over and above the Al-
liance, seeks to broaden the base of friendsliip,
as in the fulfillment of the Chamizal agreement
with Mexico,^ the effort to fmd an amicable basis
for resolving our problem with Panama, the as-
sistance mobilized to help ease floods in Costa
Eica.

It is a policy which seeks to resolve disputes
by peaceful means and to find a way that will
avoid unnecessary military expenditures wliich
divert resources from urgent social and econo-
mic purposes.

It is a policy which, in the words of President
Jolmson, "will not be deterred by those who
tenaciously cling to special privileges from the
past . . . (or) who say that to risk change is to
risk communism." '

The Progress of the Alliance

In the light of this, let us take a look at the
reports we hear from tune to time that the Alli-
ance is not fulfillLng its goals; that low stand-
ards of living, soaring birth rates, mushrooming
slums and urban blight, stragglmg agricultural
development, and erratic mdustrial advances
are still more the rule than the exception; that
the people of Latin America therefore are be-
coming discouraged with its slow rate of
progress.

It is certainly true, as my colleagues and I
pointed out at a recent CIAP meeting, that
Latin America overall is not yet reaching the
Punta del Este goal of an increased 2.5 percent
in per capita gross product each year and that
last year available data indicate the figure was
1.6 percent.

The real point, however, is that gross national
product statistics in themselves are a poor meas-
ure of development. Figures in this area are
mere abstractions which do not reflect whether
the mass of people is better or worse off than
before. In the United States, for example, our
per capita increase in GNP last year was 1.3
percent.

"What is the measure of such improvement in
Latin America? To me it is the extent to which

' For background, see ibid., Nov. 20, 1067, p. 684.

* For an address b.v President Johnson made at
Mexico City on Apr. 15, 1966, see ibid., May 9, 1966,
p. 726.

Latin American nations are helping themselves
in creating a viable climate for development.
Take government revenues. Since the start of
the Alliance, nearly every government of Latin
America has reformed and strengthened its
tax structure. With only three exceptions, gov-
ernment income is substantially above pre-
Punta del Este levels. In some cases, the in-
creases are above the increases in gross product.
What do the governments do with this in-
creased revenue? Our CIAP studies show that
Alliance member governments are spending
much more today on such items as education,
housing, and social services. Such investments
in the human sector do not, of course, produce
the spectacular results infrastructure invest-
ments do. Nor are they reflected in present gross
national product growth figures. But they are
the surest guarantee of continued development
in the years to come. And they do reinforce the
deei^ly significant fact that the development of
Latin America is greater than its growth. This
to me is the true test.

The Importance of the OAS

I know full well the skepticism being voiced
about the OAS today, the questions being raised
about its usefulness and whether we should
place such emphasis on our membership in an
organization which seems to move in languid
fashion.

Let me but say that if our emphasis is on
peace, if our emphasis is on a hemisphere
secure politically and strong economically, if
our emphasis is on progress, law, and respect
for the rights of others — and I believe our
emphasis is on all these things — then our mem-
bership in the OAS serves both our national
and international interests and will continue
to serve them in an unmatched manner.

Yesterday the OAS elected a new Secretary
General.'' The fact that it took six ballots elicited
some sad commentaries from the Cassandras
and prophets of gloom who seemed convinced
that this exercise in parliamentary democracy
was a regrettable phenomenon.

Were they right ? Was it wrong for the OAS
to take the time and the ballots required to elect
a man who is to fill what is surely one of the
most important offices in all international
organizations?

If there is one thing we should have learned

' Galo Plaza Lasso, of Ecuador.

MARCH 4, 1968

311

by now it is that making international coopera-
tion and organization work is tedious, difficult,
and unglamorous labor. It does not succeed
merely because of good intentions or wishes. It
will succeed only if we believe in it and are
willing to work at it, recognizing that in inter-
national organizations sovereign nations have
equal responsibilities. In the OAS these respon-
sibilities must be discharged with full respect
to a nation's individuality of choice, an individ-
uality that is the hallmark of its independence.

We have now arrived at a consensus; and a
strong, independent Secretary General will
lead a strong regional organization in coping
with the challenges that confront the hemi-
sphere. We pledge him our cooperation and
support.

Today the diversity of opinion that marked
the election no longer is an issiie, and it will
not be permitted to intrude in all the areas of
cooperation and trust that bind together the
members of the OAS in a common endeavor —
an endeavor that is and will remain our prime
concern.

All in all, I believe that the election experi-
ence has been good for the OAS and the inter-
American community. For it demonstrated the
importance with which the organization and
its leadership is regarded by the countries of
Latin America. And it points up a growing
conviction and confidence that the Organization
of American States is needed today far more
than at any previous time in its history to keep
inter-American affairs on an even keel and
to move toward a hemisphere of peace and
democracy.

Democracy in Latin America

I think it is perfectly valid to ask about the
state of democracy in Latin America; the an-
swer, after all, is a key to whether we are fol-
lowmg a wise policy in and out of the OAS.
Democracy is, of course, not all we would like
it to be everywhere in Latin America. But it
is not in the United States either. And I would
also_ say that democracy has moved forward in
Latin America m a mamaer not seen on any
other continent since the end of the last war.

True enough, we have witnessed the rise of
extremism in Cuba; and its lesson is that a
despotism that ignores the just needs of the
many for the selfish desires of the few offers
a perfect breeding ground for communism and
extremism. But it is also true that the nmnber
of those searching for a violent revolution in

Latin America has lessened and the number of
those who believe that a peaceful revolution of
the Alliance may yet be the answer to the ills
of Latin America has increased.

Whether it be Latin America or the United
States, or anywhere for that matter, the growth
of democracy is related to basic social and eco-
nomic factors. Indeed, we can see a jiarallel to
some of the problems confronting our Latin
American neighbors by looking at the problems
in our own cities where, in some cases, desperate
citizens have bypassed the democratic process
as they seek other avenues toward a better life.

The great lesson is that time — here and in
Latin America — is not on our side and that
desperate acts, while demanding firm response
in upholding the law, demand equally firm
measures to correct the causative ills. For if
we want to see democracy fulfill its destiny,
then we have a responsibility to help create
conditions that will allow it to flower — condi-
tions under which economic freedom and social
justice are the firm foundation upon which
political democracy must rest.

It is true we will not like what we see at
times in Latin America, particularly when
military governments, no matter how benevo-
lent, interrupt the normal democratic process.
We have a serious choice to make on such
occasions; for these coups d'etat can never
be the appropriate means of a people's
self-determination.

We have both the responsibility to the inter-
American system and the commitment to our
own principles to advance and encourage the
growth of representative government and to act
so that we make clear our hopes for the secure
future of political democracy and self determi-
nation in Latin America.

For in the words of the President, ". . . we
shall have — and deserve — the respect of the
people of other countries only as they know
what side we are on." *

That too many still do not know — that some
feeling against the United States still remains — ■
is evident from time to time. But I am con-
vinced that this sentiment is not a reflection of
majority opinion. I am also convinced it will
yet disappear, as more and more of the people
learn we stand with the men of vision of their
hemisphere, with those who believe that hun-
ger and disease and illiteracy can be ended,

' For an address by President Johnson made at
Denver, Colo., on Aug. 26, 1966, see ibid., Sept. 19,
1966, p. 406.

312

DEPAKTMENT OF STATE BULLETIK

■with those who are convinced that the entrench-
ment of the oligarchies and the privileged can
be modified peacefnlly, with those who know
there is a future in a unified continent in whicli
the various govermnents are dedicated to de-
mocracy, reform, and progress.

Knowing this, they will know our policy is
not a sterile and negative anti-Castro, anti-
Communist commitment; that we know a man
is not a Communist just because he longs for
change; that we know his support of social
progress does not mean he also supports Castro
extremism; and that perliaps, above all, we
understand that the possibility of success for
insurgency exists in every village, every com-
munity, every phase of life where the heritage
of neglect is greater than the effort to bring
about a better life for the people.

Military Expenditures

From time to tune in recent months, efforts
have been made among the countries of Latin
America to agree to the elimination of unneces-
sary military expenditures. Prior to the Sum-
mit Conference, discussions were undertaken
among various countries in order to determine
whether a nonreceipt agreement affecting cer-
tain types of heavy military equipment might
be feasible. Included in the arrangement would
have been an undertaking not to acquire super-
sonic jet aircraft prior to the end of tlie decade.
Although regrettably such a specific agreement
could not be achieved, the desire to accomplish
some such limitation remains alive and current.
In recent weeks President Frei of Chile has
spoken out suggesting its urgency, and several
other Latin American Presidents have indicated
their concurrence.

In the Summit Declaration the Latin Ameri-
can Presidents expressed their resolve to elim-
inate unnecessary military expenditures in
recognition of the fact that "the demands of
economic development and social progress make
it necessary to apply the maximum resources
available in Latin America to these ends." Pre-
liminary discussions about one procedure to
help fulfill this intent involved a review of mil-
itarj' expenditures within the context of CIAP's
annual country reviews; but this did not meet
with requisite support on the part of other
CIAP members. Accordingly, other ways or
anotlier mechanism must be found, under the
OAS or elsewhere within the inter-American
system, to focus upon the problem and seek

agreement on its solution. We are encouraging
the exploration of such possibilities.

Taken as a whole, how does our Latin Ameri-
can policy shape up ? Bearing in mind all that
still remains undone, all the patience and the
determination that are still demanded, all the
dangers still to be met, with the basic question
still unanswered — will the inevitable revolution
in Latin America be one of international co-
operation and peaceful change or will it be a
violent one in whicli the only ones to gain will
be the forces of tyranny? — Latin America
stands today as a vivid and exciting example of
what can and should be done to strengthen
freedom and de-fuse extremism.

In and of itself, of course, the Alliance will
not insure the security of the hemisphere, nor
will it solve the problems that beset it. Nor will
the OAS. Used wisely and appropriately by the
peoples of the hemisphere, however, these are
the roadmaps to the future that we believe the
Americas can and will attain. Then time can be
our ally in this Decade of Urgency. To this end
our policy is dedicated.

U.S. To Sign Protocol
to Treaty of Tiateloico

Statem-ent by President Johnson

White House press release dated February 14

One year ago today, on February 14, 1967,
the nations of Latin America gathered in Tiate-
loico, ilexico, to sign a treaty for the prohibition
of nuclear weapons in Latin America. Twenty-
one nations of the region have now joined in
this historic undertaking.

The United States considers this treaty to
be a realistic and effective arms control measure
of unique significance — not only to the peoples
of Latin America but to all the peoples of the
world.

Today I am pleased to announce that the
United States will sign protocol II to this treaty,
which calls upon the powers possessing nuclear
weapons to respect the status of denucleariza-
tion in Latin America and not to use or threaten
to use nuclear weapons against the Latin Amer-
ican states party to the treaty. I have appointed
Adrian S. Fisher, Deputy Director of the
Arms Control and Disarmament Agency, as my

MARCH 4, 1968

313

emissary to sign the protocol in Mexico with an
appropriate statement.

Upon ratification by the Senate, the United
States -will assimae the obligations to those coun-
tries vrithin the region which undertake and
meet the treaty's requirements. I am pleased to
note that the drafters of this treaty have indi-
cated that transit by the United States within
the treaty zone will continue to be governed by
the principles and rules of international law.

The Treaty of Tlatelolco has been closely re-
lated to the long effort to reach worldwide agree-
ment to prevent the further spread of nuclear
weapons. It will create a nuclear-free zone in an
area of 71/^ million square miles inhabited by
nearly 200 million people. Like the nonprolif-
eration treaty, this treaty in addition to pro-
hibiting the acquisition of nuclear weapons also
prohibits the acquisition of nuclear explosive
devices for peaceful purposes. However, it has

been drafted in such a way as to make it pos-
sible for Latin American parties to the treaty to
obtain peaceful nuclear explosion services.

It is indeed fitting that this giant step for-
ward should have had its genesis in Latin Amer-
ica, an area which has come to be identified with
regional cooperation. I particularly wish to
congratulate our distinguished friend. Presi-
dent Diaz Ordaz of Mexico, for the initiative
and leadership which his government has con-
tributed to this treaty and thereby to the peace
of this region and the world.

In signing this protocol, the United States
once again afBrms its special and historic rela-
tionship with the peoples of Latin America and
its stake in their future. The United States
gives this afBrmation gladly, in the conviction
that the denuclearization of tliis region enhances
the development of its peaceful nuclear
potential.

British Prime Minister Harold Wilson Visits the United States

British Prime Minister Harold Wilson vis-
ited the United States February 7-9. He met
with President Johnson and other Government
officials at W ashington Fehruanj 8-9. Follow-
ing is an exchange of toasts between President
Johnson and Prime Minister Wilson at a dinner
at the White House on February 8.

White House press release dated February 8

PRESIDENT JOHNSON

Let me thank you first of all for coming out
on a winter's night to warm this house with
friendship.

It could be said that we are gathered here to
welcome a Prime Minister who has come in out
of the cold.

I refer, of course, to the famous English win-
ter— ending in July and reappearing in August.

But whatever the season, sir, there is always
strength and comfort in standing beside you to
field the challenges of the day. It is always a
good day for any man or any nation when they

can claim the British as comrades in adversity
or brothers in adventure or as partners in ad-
vancement.

But I do not want tonight to wave either the
Union Jack or the Stars and Stripes. We buried
the need for that with Colonel Blimp, Yankee
Doodle, and other caricatures of yesteryear.
When Americans talk today of what Great
Britain means to us — and means to the world
in which we live — we are moved by a more
meaningful English voice from the past. It was
Robert Browning who spoke the truth for our
time : "My sun sets to rise again."

Yes, these are difficult times for Great
Britain — and they are very difficult times for
the United States. Yes, we have our family dif-
ferences still. And yes, Britain means as much
to us as she ever meant.

— Our two nations are as close as ever.

— Our two peoples are as determined as ever
to master the trials of the moment and to move
on to the triumphs of the future.

That is what the Prime Minister and I have

314

DEPARTMENT OF STATE BULLETIN

spent the day talkino: about. "We have ranged
around the world, reviewing our large respon-
sibilities, drawing on our experiences, exchang-
ing insights, giving and getting much of value.
But we always came back to one basic and un-
breakable agreement.

— We want the same things for our people.

— They will not come easily or tliey will not
come overnight, but our people sliall have them
if patience and perseverance can win them.

They are the simplest things to describe —
but they arc the hardest to achieve :

— A peace rooted in the good, firm earth of
freedom.

— A world respectful of law, given to justice,
hostile only to force.

— A life without the torment of liunger, ig-
norance, and disease.

— A higher standard of living and more op-
portunity for all.

It will come for us. If any man doubts it, let
him look at how far the Americans and the
British have come already in common pui'pose.
Let him reflect on all that we have overcome
already by sharing struggle and sacrifice.

And then let him look deeply into the well of
our strength — the traditions and the character
that shape us.

He will come quickly to the truth that sus-
tains us : The American and British peoples are
not short- distance crusaders. If we must tighten
our belts for a time, it does not leave us breath-
less for the next battle. "We are veteran cam-
paigners, not amateurs. "We have learned to pace
ourselves — to accept temporary detours and
steer around them.

I have enormous confidence, Mr. Prime Min-
ister, in the character of my own people, in their
ability to understand and master trial. I am
very proud to place equal faith in your people,
in their characteristic courage and fortitude.
I saj' with them, and I say to them, using the
slogan of the moment: The American people
are backing Britain.

The greatness of nations, the size of their
global role and influence : these laurels are not
earned or held by the trappings of power alone.

"Ultimately, nations can only lead and leave
their mark if they have the power to attract
and to instruct by example. The rank and worth
of nations are decided, finally, by what pushes

upward and outward from their roots: the
character of citizens, the value of ideals, the
quality of life, the purpose of a people.

"What a magnificent oi:)portunity for the peo-
ple of Great Britain !

Character, ideals, culture, purpose : the world
already knows them as unmistakably British
qualities, as the benclunarks of civilized life, as
standards of decency and development that sur-
pass and survive the imjDortance of any single
epoch.

The new and struggling states of the world
can gain much from these gifts of British exam-
ple. The older nations can also learn from them
and can count on them for security and for
progi-ess. Britain itself will continue to build
on them :

— In British education, for example, where
a revolution of learning and opportunity is al-
ready underway.

— And in British technology, where the na-
tive skills of an inventive and industrious peo-
ple are establishing a new "workshop of the
world."

There is so much, Mr. Prime Minister, wait-
ing for our peoples on the road ahead.

The confidence and purpose that we show to
the world will always be a reflection of our own
relationship. I want it always to have the im-
portance and to have the meaning that that
great President of ours, Franklin D. Roosevelt,
gave it more than a quarter-century ago, when
he welcomed King George VI to tliis house:

I am persuaded (he said) that the greatest single
contribution our two countries have been enabled
to malie to civilization, and to the welfare of peoples
throughout the world, is the example we have jointly
set by our manner of conducting relations between our
two nations.

It is a grand toast still. I renew its promise
now, Mr. Prime Minister, by offering it as a
tribute to you and to your people.

The thing our people want most tonight, Mr.
Prime Minister, of course, is peace in the world.
As you and I pursue it, I think we are entitled
for a moment to have a little peace of mind —
even a little music while we work.

The songs you will hear tonight have been
challenged in some sections of the press today.
"When I heard that on my morning radio, I
thought, ""Well, there they go again, always
wanting me to dance to their tune."

315

But I am a man who really, after all, loves
harmony. I was ready to believe that Mr. [Rob-
ert] Merrill and Miss [Veronica] Tyler were
actually trying to maintain the balance of jDay-
ments in their choice of songs tonight by paying
you a compliment on "The Road to Mandalay"
and paying me a compliment — "Oh, Bury Me
Not on the Lone Prairie."

I was ready to believe it until I had some
Senator say to me this morning: "Well, what
have they really got to sing about anyway?"
I think that should settle the matter If it
doesn't, Mr. Prime Minister, I am prepared
tonight to keep peace at any price.

Let us now toast to lasting harmony between
the best of friends — the British and the
American people.

Ladies and gentlemen, Her Majesty the
Queen.

PRIME MINISTER WILSON

It is my privilege, Mr. President, to rise and
toast your health. On behalf of my colleagues,
may I thank you for your kind hospitality to us
this evening and for enabling us to meet this
distinguished gathering of American citizens.

In particular, I should like to thank you for
what you have said and the way in which you
have said it.

It was one of the most moving speeches I
think any of us has ever listened to.

You referred to the difEcult times tlirough
which the United States, Britain, and the world
are moving. You set out in words which all of
us would endorse your conception of the hopes
and aspirations for our people— yours and,
indeed, ours.

We welcomed everything you have said to us
tonight. You referred to the days of Anglo-
American relationships, the days of your gi'eat
master and tutor, Franklin Delano Roosevelt.
But I make bold acclaim that relations between
our two countries today, in 1968, in the years
when you and I have been meeting, are no less
close and no less intimate than they were in
those perilous wartime days of the Anglo-
American alliance.

I was particularly moved to hear you endors-
ing the slogan of backing Britain. Mr. Presi-
dent, the acoustics in this room are always a
little dubious. Last year I dispensed with this
machine and relied on my own voice. From this

distance, I thought what you were saying was
not "backing Britain," but "buying Bi'itish." I
hope the acoustics will not blame me for it.

Mr. President, our talks this morning and this
afternoon, as always, have been informal,
friendly, and, above all, to the point. This meet-
ing was arranged some time ago. We couldn't
know the exact developments that we should bo
discussing in each part of the world where our
talks today have led us.

What I particularly appreciate is that at this
time we have been able to have such a thorough
and wide discussion of the whole world scene.
Inevitably, at this time — and I think this has
been true of almost every discussion we have had
together in the last 3 or 4 years — and true also
of the contacts that we are able to maintain in
between meetings — a great part of our dis-
cussion has related today to the situation of
Viet-Nam.

I make no apology for the fact that on what
should be a happy occasion I want to devote
most of my time this evening to referring to that
situation, because the events of the last 10 days
have brought home to millions of people far
from the conflict, within our own countries, the
indescribable horror and agony this war is
bringing to a people for whom peace has been a
stranger for a generation.

But the scenes of outrage that we have seen
on our television screen can beget dangerous
coimsel. It can beget impatient and exasperated
demands to hit back, to escalate in ways which
would widen and not end that war.

The responsibility of power, Mr. President, as
you know, means not only loneliness. In a de-
mocracy, it means facing demands for punitive
action whenever national interests are outraged.
The hardest part of statesmanship is to show
restraint in the face of that exasperation.

All those imderstandable demands for actions
which are immediately satisfying could have in-
calculable effects, effects, indeed, on the whole
world. That is why, Mr. President, your admin-
istration's attitude following the Pueblo inci-
dent is one which will earn tributes from reason-
ing men everywhere and, indeed, from history.

You referred just now, Mr. President, to the
musical entertainment. When I read your press
this morning— and I always believe everything
I read in the American press — I said, "I hope
they won't change the progi'am for me. These
are my favorite tunes."

"Mandalay" — I don't know why anyone

316

DEPARTMENT OF STATE BTTLLETIN

thouc'lit that was embarrassing. "We got out of
Mandalaj- 20 years ago.

But if we are going to go back to Kudyard
Kipling — and some of us are trying now to
escape from him — I think one of the gi'eatest
l^lirases he used — which must have rung many
times m your ears, Mr. President, when you
talked about the hard and difficult times, and
the misunderstandings of the things that states-
men have to do from time to time — was when
Kipling in his famous poem said — and when
things are really tough, one should either reread
that poem or read what Lincoln said when he
was up against it — "If you can meet with
triumph and disaster and treat those two im-
posters both the same" — once we can recognize
that, it makes us a little more detached about
some of the things we have to do.

Mr. President, the problem of Viet-Nam, as
you have always recognized, can never be settled
on a durable and just basis by an imposed mili-
tary solution. Indeed, the events of these past
days have underlined yet again that there can be
no purely military solution to this problem, that
there can be no solution before men meet around
the conference table, determined to get peace.

I have said a hundred times that this problem
will never be solved by a military solution,
which I see is one of the lessons of the last few
days — a determined resistance to see that a mili-
tary solution is not imposed on the people of
Viet-Nam.

I am frequently urged, as what is supposed to
be the means to peace, to disassociate the British
Government from American action and, in par-
ticular, to call for the imconditional ending of
all the bombing.

]\Ir. President, I have said this a himdred
times, too, in my own country, in "Western Eu-
rope, in the Kremlin : that if I felt that by doing
this I could insure that this war ended one day
earlier or that it would insure that peace, when
achieved, was one degree more durable, one
degree more just, I would do what I am urged
and disassociate.

I have not done so, and I am going to say why.
Over the past 3 years, Mr. President, as you
know, as the Secretary knows, I have been in
the position to know a good deal about the his-
tory of negotiations and consultations and con-
tacts and discussions aimed at getting away
from the battleground and getting around the
conference table.

I recall our talks here in "Washington at the

time of your Baltimore speech, now nearly 3
years ago.'

I recall the Commonwealth Prime Ministers
Conference over 2V2 years ago when 20 Com-
monwealth heads of government from Asia and
Africa, from the Mediterranean, the Caribbean,
Australia, Europe, and America, of widely
diti'erent views and widely differing loyalties
over "Viet-Nam, all of them, called for a cessa-
tion of the bombing and, in return, a cessation
of infiltration by the North "V^ietnamese Army
in South Viet-Nam.

I recall a hundred proposals to our fellow
Geneva cochairman to activate the Geneva con-
ference or any other forum to get the parties
around the table.

I recall meetings and discussions in "Washing-
ton, in London, in New York, in Moscow, and
innimierable less formal consultations, with
anyone and eveiyone who could heli) find the
road to peace.

And all of these have failed — failed so far
to find a solution.

But it doesn't mean we were wrong, all of us
here, to try and to go on tryuig.

I believe — and this is true even today against
the differing background of all that is now hap-
pening on the battlefield — that the road to peace
was fairly charted, not for the first time, but
with greater and more meaningful clarity, at
San xVntonio last September.^

A fortnight ago I was in the Kremlin, and
in many hours of discussion with the Soviet
leaders I sought to spell out what San Antonio
and what subsequent elucidations of San An-
tonio meant.

I believe the Soviet leaders now know, if they
did not understand before, that what that for-
mula means is that the United States would be
prepared to stop the bombing, given an assur-
ance that prompt and productive discussions
will start and that this action will not be ex-
ploited to create a new situation of militai-y ad-
vantage which would delay a political
settlement.

It was, Mr. President, as you know, our pur-
pose in Moscow to show that once the surround-
ing misunderstandings have been removed, this

' For an address by President Johnson made at Balti-
more, Md., on Apr. 7, 1965, see Bulletin of Apr. 26,
1965. p. 606.

° For an address by President .Tohnson made at San
Antonio, Tex., on Sept. 29, 1967, see iWd., Oct. 23,
1967, p. 519.

MARCH 4, 1968
200-847 — 68-

317

approach could be reconciled with the condi-
tions laid down by the DRV Foreign Minister,
Mr. [Nguyen Duy] Trinh, on December 29th.

What I am saying now, interpreting — and I
think you will agree I am interpreting cor-
rectly— the San Antonio formula, really
answers his latest speech this week which has
been printed today.

There have been some, not only in Moscow, as
I learned, who would believe that San Antonio
meant that the United States were insisting in
advance, as a precondition, on a given outcome
to the talks as a condition to stopping the
bombing.

We believe that this reconciliation is possible
once it is clear that all that is needed to start
negotiations is assurance that the talks will
begin promptly and that they will be mean-
ingful and directed in good faith to a peaceful
settlement.

Given, therefore, good faith, we — all of us —
America, the Soviet Union — we ourselves are to
ask now whether the events of these past 10
days mean that there is not, that there cannot
be, that good faith. Whatever the discourage-
ment of these past 10 days, all of us, Mr. Presi-
dent, feel for you in this conflict. I do not take
that view because, as I have said, this problem
cannot be settled by a purely military solution.
Negotiations for a political settlement will have
to come. Every day that the start of those ne-
gotiations is delayed means more suffering.

This is not the time to attempt to set out what
the provisions of such a settlement should be.
But statesmen from many countries, differing
deeply in their attitudes to the Vietnamese prob-
lem, have each in their own words stressed that
the basic principle involved in that settlement is
the right of the peoples of that area to determine
their own future through democratic and con-
stitutional processes — words, Mr. President, I
am quoting from yourself.

Once willingness is shown to enter into
prompt and productive discussions, we in
Britain in our capacities as Geneva cochairmen,
or in any other appropriate way, will play our
full part in helping the parties to reach agree-
ment. And with the political settlement will
come the enormous task of repairing the dam-
age, of embarking on the great era, the great
challenge, of economic and social reconstruc-
tion in that area.

Mr. President, the noises of battle, the noises

of controversy, too, in all our countries, have
perhaps caused many to forget your own pro-
posal on the theme of economic reconstruction
in Viet-Nam which I read in your speech at
Baltimore, now nearly 3 years ago. It may have
been forgotten, but once again it will become,
I hope soon, a reality.

I feel it right to add that within the resources
we could make available we shall be ready to
play our part.

It may be, Mr. President, that tonight in my
speech of thanks and appreciation to you I have
been striking — as indeed you yourself said —
something of a somber note because of the cir-
cumstances in which we meet, somber but at
the same time hopeful, hopeful because at the
same time determined.

As you have said, when we have pursued a
common aim, however dark the background
against which we have been operating, that com-
mon aim, that hope, and that determination
have set an example to the world.

The problems with which so many of us here
tonight are concerned, the problems we have
dealt with in our wide-ranging talks earlier to-
day, have not been confined even to the com-
pelling and urgent problem brought about by
the tragedy of Viet-Nam. We have discussed
problems of Europe, of the Middle East, the
problems of the developing world, problems
of nuclear disarmament, the challenge of mak-
ing a reality of the authority of the United
Nations.

And all of these have proved again today, and
in all of our continuing discussions and changes
over these past years, to have their own urgen-
cies and their own priorities.

But in a wider sense we are trying, together,
to face challenges on a world scale, the challenge
of a world increasingly dominated by the ex-
plosion of race and color.

Mr. President, whatever they say, neither
you nor we have any need to apologize about our
reaction to the challenge of race and difficulty,
the challenge on a world scale of the population
explosion, the challenge of the problems acute
for advanced countries and for developing coun-
tries alike, the problem of freer movement of
trade and freedom from the throes of outmoded
international financial practices and interna-
tional financial doctoring — may I add : and the
worship of the Golden Calf.

It is, therefore, Mr. President, in the confi-

318

DEPARTMENT OP STATE BULLETIN

'/kM

dence that together we, the United States and
Britain, are friends and partners — in the Com-
monwealth, in Europe, in the United Nations.

The years ahead will bring for us a new and
fresh spirit to the attack on these problems.

It is in that spirit and in that confidence that
I have the pleasure now of toasting the health
of the President of the United States of
America.

President Meets With Mr. Rey
of the European Communities

Jean Rey, President of the Commission of the
European Communities, visited Washington
Fehruary 6-9. Following is a joint statement
issued at the conclusion of his meeting with
President Johnson on Fehruary 7.

White House press release dated February 7

The President and Mr. Jean Rey, President
of the Commission of the European Communi-
ties, met at the White House on February 7.
During his visit to Washington, Mr. Rey, ac-
companied by Vice President [Fritz] Hellwig
and Commissioner [Jean-Francois] Deniau, is
also meeting with the Vice President, the Sec-
retary of State, and other Cabinet and sub-
Cabinet officials.

The President and Mr. Rey confirmed their
belief in the need for continued progress toward
the unity of Europe. The President reaffirmed
the support of the United States for the progress
of the European Communities. A strong and
democratic Western Europe working as an equal
partner with the United States would help to
build a peaceful, prosperous and just world
order. Both the United States and the Euro-
pean Communities recognize their responsibili-
ties to the developing countries in expanding
export earnings and development.

The President reviewed his balance of pay-
ments program with Mr. Rey and emphasized
the firm intention of the United States to take
the necessary action to restore equilibrium. The
President and Mr. Rey recognized the need for
both surplus and deficit countries to continue
and intensify their individual and common ef-
forts to achieve a better equilibrium in the in-
ternational balance of payments.

The closest cooperation between the United
States and the European Communities is neces-
sary to ensure that international adjustment
takes place under conditions of continued eco-
nomic growth with financial stability. In par-
ticular, they agreed that the achievements of the
Kennedy Round must be preserved, that pro-
tectionist measures should be avoided and that
further progress should be made in the elimina-
tion of barriers to trade.

Mr, Rey told the President of his satisfac-
tion with a meeting held on February 7 between
his party and senior officials of the United States
Government on matters of common concern per-
taining to the economic interrelationship of
Europe and the United States. The President
and Mr. Rey agreed similar high level consulta-
tions would be useful in the future.

Ryukyuan People To Elect
Chief Executive Directly

STATEMENT BY PRESIDENT JOHNSON,
FEBRUARY 1

White House press release dated February 1

I have signed an amendment to the basic
Executive order ^ that provides for the admin-
istration of Okinawa and other Ryukyu Islands.

The amendment I have signed provides that
the Ryukyuan chief executive, who is now
elected by the legislative body of the govern-
ment of the Ryukyu Islands, shall in the future
be popularly elected by the Ryukyuan people.

This is another forward step in the continu-
ing policy of the United States to afford the
Ryukyuan people a voice in managing their own
affairs, as great a voice as is compatible with
the Ryukyus' role in maintaining the security
of Japan and the Far East. The amendment will
also further the identification of Ryukyuan in-
stitutions with those of Japan proper, where
prefectural chief executives are directly elected.
This is consistent with the agreement reached

' For text of Executive Order 10713, see Buixetin
of July 8, 1957, p. 55.

MARCH 4, 1968

319

in my recent talks with Prime Minister
[Eisakii] Sato of Japan.^

General [Ferdinand T.] Unger, our High
Commissioner in the Ryukyus, announced this
change today in a speech to the Ryukyuan
Legislature.

It will insure that the Ryukyuan chief execu-
tive for the next term can be elected directly by
the Ryukyuan people.

EXECUTIVE ORDER 11395^

FuKTHER Amending Executive Order No. 10713, Pso-
viDiNQ FOB Administration of the Ryuktu Islands

By virtue of the authority vested in me by the Con-
stitution, and as President of the United States and
Commander in Chief of the armed forces of the United
States, subsection (b) of section 8 of Executive Order
No. 10713 of June 5, 1957, as amended by Executive
Order No. 11010 of March 19, 1962, and Executive
Order No. 11263 of December 20, 1965,^ is further
amended to read as follows :

"(b) (1) The Chief Executive shall be elected by
the people of the Ryukyu Islands. The person having
the greatest number of votes shall be the Chief Execu-
tive, provided that he shall have received at least
one-fourth of the total number of votes cast. The Chief
Executive .shall be elected on the same day as are the
members of the legislative body and shall serve a term
concurrent with the term of the members of the legis-
lative body and thereafter until his successor takes
office. The first such election of the Chief Executive
shall be on the same day as the legislative elections
in November 1968. The legislative body shall by law
establiish procedures for the election of the Chief Execu-
tive, determine the qualifications for the office of Chief
Executive, and provide for special elections when neces-
sary to fill a vacancy.

"(2) In the event that a Chief Executive is not,
within a reasonable period of time, as determined
by the High Commissioner, elected to succeed an in-
cumbent or to fill a vacancy, the High Commissioner
may appoint a Chief Executive who shall serve until
a successor is duly elected."

Yf—

The White House,
January 31, 1968.

' For text of a joint communique issued at Washing-
ton on Nov. 15, 1967, see ibid., Dec. 4, 1967, p. 744.
'33 Fed. Reg. 2.561.
' For text, see Bulletin of Jan. 10, 1966, p. 66.

United States Delegations
to International Conferences

2d United Nations Conference on Trade and
Development

The Department of State announced on Jan-
uary 29 (press release 21) that Eugene V. Ros-
tow, Under Secretary for Political Affairs,
would be the U.S. Ministerial Representative to
the meeting of the Second United Nations Con-
ference on Trade and Development, to be held in
New Delhi from February 1 to March 25. Mr.
Rostow will be present for the first week of the
conference.

Joseph A. Greenwald, Deputy Assistant Sec-
retary for International Trade Policy, will be
the chairman of the United States delegation to
the Conference.

Chester Bowles, American Ambassador to
India, and Mr. Greenwald will be the U.S.
Representatives to the Conference.^

About 130 delegations numbering perhaps
2,000 persons will participate in the meeting,
popularly referred to as UNCTAD II.

The First United Nations Conference on
Trade and Development was held in Geneva
from March 23 to Jime 16, 1964. UNCTAD I
recommended that the Conference be estab-
lished as an organ of the General Assembly, to
meet at least every 3 years, and that a 55-
member Trade and Development Board be
created. Following UNCTAD I, the General
Assembly approved the institutional recom-
mendations of UNCTAD I, and the Trade and
Development Board and a Secretariat were
in fact created. Dr. Raul Prebisch has served in
the post of Secretary General of both the Con-
ference and the Board.

The provisional agenda for UNCTAD II was
approved by the Trade and Development Board
on September 7, 1967. The final agenda will be
approved by the Conference in February.
Major items on the agenda include:

1. Trends and problems in world trade and
development ;

2. Commodity problems and policies ;

3. Expansion and diversification of exports

' For names of advisers on the U.S. delegation, see
Department of State press release 21 dated Jan. 29.

320

DEPARTMENT OF STATE BULLETIN

of manufactures and semimanufactures of de-
veloping countries;

4. Growth, development finance, and aid;

5. Problems of developing countries in re-
gard to invisibles, including shipping;

6. Trade expansion and economic integration
among developing coimtries ;

7. Special measures to be taken in favor of
the least developed ; and

8. General review of the work of the
UNCTxVD.

On the initiative of the United States, an item
on the world food problem appears on the agen-
da. The rise in food import requirements of
many developing countries caused by the slow
growth of their agricultural output is a serious
hindrance to their development. The United
States hopes UNCTAD II will emphasize the
relation between increased agricultural output
and general economic development with partic-
ular emphasis on the measures needed to in-
crease food production in the developing
countries.

The question of temporary tariff advantages
to be granted by all industrialized countries to
all developing countries will probably be one of
the principal topics of discussion. As President

Johnson announced at Punta del Este in April
19G7,= the United States is prepared to seek the
cooperation of other nations in seeing whether
a broad consensus can be reached on this im-
portant matter.

U.S. and Czechoslovakia Conclude
Civil Aviation Talks

Press release 28 dated February 9

Delegations representing the Government of
the United States of America and the Govern-
ment of the Czechoslovak Socialist Kepublic
met in Washington on January 22 to resiune
discussions, begun in Prague in April 1967, on
an updating of the air transport agreement be-
tween the two governments which was negoti-
ated in 1946.^ The current talks were concluded
on February 9, when the delegations agreed to
submit their recommendations to their respec-
tive Governments for appropriate action.

^ For background, see Bulletin of May 8, 1967, p. 706.
' Treaties and Other International Acts Series 1560.

MAECH 4, 1968

321

THE CONGRESS

To Build the Peace — The Foreign Aid Program for Fiscal 1969

Message From President Johnson to the Congress ^

To the Congress of the United States :
Peace will never be secure so long as :

— Seven out of ten people on earth cannot
read or write ;

— Tens of millions of people each day — most
of them children — are maimed and stunted by
malnutrition.

— Diseases long conquered by science still
ravage cities and villages around the world.

If most men can look forward to nothing
more than a lifetime of backbreaking toil which
only preserves their misery, violence will always
beckon, freedom will ever be under seige.

It is only when peace offers hope for a better
life that it attracts the hundreds of millions
around the world who live in the shadow of
despair.

Twenty years ago America resolved to lead
the woi'ld against tlie destructive power of man's
oldest enemies. We declared war on the hunger,
the ignorance, the disease, and the hopelessness
which breed violence in human affairs.

"We knew then that the job would take many
years. We knew then that many trials and many
disappointments would test our will.

But we also knew that, in the long run, a
single ray of hope — a school, a road, a hybrid
seed, a vaccination — can do more to build the
peace and guard America from harm than guns
and bombs.

This is the great truth upon which all our
foreign aid programs are founded. It was valid
in 1948 when we helped Greece and Turkey
maintain their independence. It was valid in
the early fifties when the Marshall Plan helped
rebuild a ruined Western Europe into a show-

' Transmitted on Feb. 8 (White House press release;
also printed as H. Doc. 251, 90th Cong., 2d sess.).

case of freedom. It was valid in the sixties when
we helped Taiwan and Iran and Israel take
their places in the ranks of free nations able
to defend their own independence and moving
toward prosperity on their own.

The programs I propose today are as im-
portant and as essential to the security of this
nation as our military defenses. Victory on the
battlefield must be matched by victory in the
peaceful struggles which shape men's minds.

In these fateful years, we must not falter. In
these decisive times, we dare not fail.

No Retreat, No Waste

The foreign aid program for fiscal 1969 is
designed to foster our fundamental American
purpose : to help root out the causes of conflict
and thus ensure our own security in a peaceful
community of nations.

For fiscal 1969 I propose:

— An economic aid appropriation of $2.5 bil-
lion.

— A military grant aid appropriation of
$420 million.

—New and separate legislation for foreign
military sales.

— A five-year program to develop and manu-
facture loiv-cost protein additives from fish, to
help avoid the tragic brain damage now inflicted
on millions of children because of malnutrition
in their early years.

— That the United States join with other na-
tions to expand the International Development
Association, the development-lending affiliate
of the World Bank. For every two dollars the
United States contributes, other nations will
contribute three dollars.

— That the Congress authorize a contribution

322

DEPARTMENT OF STATE BTTLLETIN

to new Special Funds of the Asian Development
Bank.

— Prompt appropriation of the annual con-
trihuiion to the Fund for Special Operations of
the Intel'- American Development Bank.

— A further authoi^ization and appropriation
of callable funds for the Inter-American De-
velopment Bank to stand behind the Bank^s bor-
rowing in private money markets.

Common Effort for Common Good

I pledge to the Congress and to the people of
America that these programs will be carried out
with strict attention to the six basic principles
of foreign aid administration we announced last
year.^

1. Self-Help

Self-help is the fundamental condition for
all American aid. We will continue to insist on
several dollars of local investment for every dol-
lar of American investment. We will help
those — and only those — who help themselves.
We will not tolerate waste and mismanagement.

2. Multilateralism

This year, 90 percent of our AID loans will be
made as part of international arrangements in
which donors and recipients alike carry their
fair shares of the common burden.

America now ranks fifth among donor coun-
tries in terms of the share of its national prod-
uct devoted to official foreign aid. Japan in-
creased her aid by nearly 50 percent last year.
Germany has increased her aid budget despite
fiscal restraints which have curtailed domestic
welfare programs. Great Britain is maintaining
aid levels despite severe financial problems.
With the signing of the International Grains
Agreement, other wealthy nations will for the
first time be obligated to contribute food and
money to the world-wide war on hunger.

This year we must take another important
step to sustain those international institutions
which build the peace.

The International Development Association,
the World Bank's concessional lending affiliate
is almost without funds. Discussions to provide
the needed capital and balance of payments
safeguards are now underway. Wc hope that
these talks will soon result in agreements among

the wealthy nations of the world to continue the
critical work of the Association in the develop-
ing countries. The Administration will trans-
mit specific legislation promptly upon comple-
tion of these discussions. I urge the Congress
to give it full support.

3. Regionalism

Last year I joined with the Latin American
Presidents to renew, reaffirm and redirect the
Alliance for Progress.

The nations of free Asia began a general sur-
vey of their joint transportation and education
needs, while work proceeded on projects to bring
power, water and the other tools of progress to
all.

The African Development Bank, financed en-
tirely by Africans, opened its doors and made
its first loan.

The coming year will present three major op-
portunities for the United States to add new
momentum to these regional efforts:

A. The Inter- American Development Bank.

This Bank stands at the center of the Alliance
for Progress. Last year, the Congress authorized
three annual contributions of $300 million each
to the Bank's Fund for Special Operations. The
second of these contributions should be appro-
priated this year.

The Ordinary Capital of the Bank, which
comes mainly from sales of its bonds in the
private market, must now be expanded. Since
1960, we have appropriated $612 million which
is kept in the U.S. Treasury to guarantee these
bonds. Not one dollar of this money has ever
been spent, but this guarantee has enabled the
bank to raise $612 million from private sources
for worthy projects. We must extend this proud
record. / urge the Congress to authorize $Ii.l2
million in callable funds, of which $206 million
will be needed this year.

B. The Asian Development Bank.

This Bank has asked the United States, Ja-
pan, and other donors to help establish Special
Funds for projects of regional significance — in
agriculture, education, transportation and other
fields. Last October I requested that the Con-
gress authorize a United States contribution of
up to $200 million.'' This would be paid over a
four-year period — only if it were a minority
share of the total fund, and if it did not ad-

' Bulletin of Mar. G, 1967, p. 378.

' Ihid., Oct. 10, 1967, p. 508.

MARCH 4, 19 68

823

versely affect our balance of payments. / urge
that the Congress take -prompt and favorable
action on this request.

C. The African Development Bank.

This Bank has also asked for our help to es-
tablish a small Special Fund for projects which
cannot or should not be financed through the
Bank's Ordinary Capital. We must stand ready
to provide our fair share, toith full safeguards
for our balance of payments.

4. Priority for Agriculture and Population
Planning

Victory in the war on hunger is as important
to every human being as any achievement in the
history of mankind.

The report of 100 experts assembled last year
by the President's Science Advisory Committee
on the World Food Supply* rings with grim
clarity. Their message is clear : The world has
entered a food-population crisis. Unless the rich
and the poor nations join in a long-range, in-
novative effoi't unprecedented in human affairs,
this crisis will reach disastrous proportions by
the mid-1980's.

That Keport also reminded us that more food
production is not enough. People must have the
money to buy food. They must have jobs and
homes and schools and rising incomes. Agricul-
tural development must go hand-in-hand with
general economic growth.

AID programs are designed both to stimulate
general economic growth and to give first pri-
ority to agriculture. In India, for instance,
about half of all AID-financed imports this year
will consist of fertilizer and other agricultural
supplies.

We have made a good start :

— India is harvesting the largest grain crop in
her history. Fertilizer use has doubled in the
past two years. Last year five million acres were
planted with new high yield wheat seeds. By
1970 this will increase to 32 million acres.

— Brazil, with AID help, has developed a new
grass which has already added 400,000 acres of
new pastureland and increased her aimual out-
put of beef by 20,000 metric tons.

— The Philippines is expecting a record rice
crop this year which will eliminate the need to
import rice.

* For background, see ibid., July 17, 1907, p. 76, and
Dec. 25, 1967, p. 874.

In the year ahead, AID will increase its in-
vestment in agriculture to about $800 million —
50 percent of its total development aid. In addi-
tion, I will shortly propose an extension of the
Food for Freedom program to provide emer-
gency food assistance to stave off disaster while
hungry countries build their own food
production.

We must also tap the vast storehouse of food
in the oceans which cover three-fourths of the
earth's surface. I have directed the Adminis-
trator of the Agency for International Develop-
ment and the Secretary of the Interior to launch
a five-year program to :

— Perfect low-cost commercial processes for
the production of Fish Protein Concentrate.

— Develop new protein-rich products that
will fit in a variety of local diets.

— Encourage private investment in Fish Pro-
tein Concentrate production and marketing, as
well as better fishing methods.

— Use this new jjroduct in our Food for Free-
dom program to fortify the diets of children
and nursing mothers.

But food is only one side of the equation. If
populations continue to grow at the present rate,
we are only postponing disaster not preventing
it.

In 1961 only two developing countries had
programs to reduce birth rates. In 1967 there
were 26.

As late as 1963, this government was spending
less than $2 million to help family planning ef-
forts abroad. In 1968, we will commit $35 mil-
lion and additional amounts of local currency
will be committed. In 1969 we expect to do even
more.

Family planning is a family matter. The
United States will not undertake to tell any
government or any parent how and to what ex-
tent population must be limited.

But neither we nor our friends in the devel-
oping woi'ld can ignore the stark fact that the
success of development efforts depends upon the
balance between population and food and other
resources. No government can escape this truth.
The United States stands ready to help those
governments that recognize it and move to deal
with it.

5. Balance of Payments Protection

Our ability to pursue our responsibilities at
home and abroad rests on the strength of the

324

DEPARTMENT OF STATE BULLETIN

dollar. Economic aid now helps — not hurts —
our baliince of payments position.

In 19G3, the dollar outflow from foreign aid
expenditures was over $G00 million. Last year,
it was down to $270 million. I have already di-
rected that even this figure be reduced in 1968 to
less than $170 million.^ More than nine dollars
of every ten dollars AID spends will buy Ameri-
can goods and services. And the repayments of
prior loans will more than offset the small out-
flow from new loans.

Moreover, our AID programs have a favor-
able long range impact on our balance of pay-
ments by building new markets for our exports.

G. Eflicient Administration

Over the past few years AID has reduced by
twenty percent the number of U.S. employees
serving overseas in posts other than Vietnam.
Last month I directed a ten percent reduction
in the number of employees overseas in all
civilian agencies." In addition, AID is further
improving and streamlining its over-all opera-
I tions.

A Creative Partnership With Free Enterprise

Foreign aid must be much more than gov-
ernment aid. Private enterprise has a critical
role. Last year :

— All 50 states exported American products
financed by AID.

— The International Executive Service Corps
operated 300 projects in which experienced
American businessmen comiseled local execu-
tives.

— Xearly 3,000 American scientists and en-
gineers shared their know-how with develop-
ing countries under the auspices of VITA
Corporation, a private, U.S. non-profit organi-
zation.

— More than 120 American colleges and uni-
versities contributed to AID technical assist-
ance programs.

— Thirty-thi-ee American states supported
development work in 14 Latin American coun-
tries under AID's Partners of the Alliance
program.

All of these efforts will be sustained and ex-

' For text of a memorandum from President Johnson
to AID Administrator William S. Gaud dated Jan. 11,
see i6iV?.. Feb. 12, 19G8, p. 216.

•/i;(7..p.215.

panded in the coming year. We are committed
to maximum encouragement of private invest-
ment in and assistance to the developing coun-
tries. AVe shall remain so.

A Year of Opportunity, A Year of Risk

LATIN AMERICA

/ propose appropriations of $625 million for
the Alliance for Progress.

The American Presidents met at Punta del
Este last spring' to reaffirm a partnership
which has already produced six years of
accomplisliment :

— The nations of Latin America have in-
vested more than $115 billion, compared with
$7.7 billion in American aid.

— Their tax revenues have increased by 30
percent.

— Their gross national product has risen by
30 percent.

A new course was charted for that partner-
ship in the years ahead. At Punta del Este, the
American nations agreed to move toward eco-
nomic integration. They set new targets for im-
provements in agriculture, in health, and in
education. They moved to bring the blessings
of modern teclinology to all the citizens of our
Hemisphere.

Now we must do our part. Some nations, such
as Venezuela, have progressed to the point
where they no longer require AID loans. More
than two-thirds of our aid will be concentrated
in Brazil, Chile, Colombia, and Central Amer-
ica. Each has done much to deserve our help :

— Brazil increased food production by 10%
in 1967 and achieved an overall real economic
growth of 5%. Inflation was cut from 40% in
1966 to 25% in 1967.

— Chile, under President Frei's Eevolution
in Freedom, has launched a strong program of
agricultural and land reforms, while maintain-
ing an overall growth rate of about 5% .

— Colomhia has also averaged 5% growth
while undertaking difficult financial and social
reforms.

— Central America leads the way toward the
economic integration so important to the future
of Latin America. Trade among these countries
has grown by 450% in the six years of the Alli-

' For background, see ihid.. May 8, 1967, p. 706.

MARCH 4, 1968

325

ance— from $30 million in 1961 to $172 million
in 1967.

This peaceful Alliance holds the hopes of a
Hemisphere. We have a clear responsibility to
do our share. Our partners have an equally clear
responsibility to do theirs. We must press for-
ward together toward mutual security and eco-
nomic development for all our people.

KEAR EAST AND SOUTH ASIA

/ recommend $706 million for the Near East
and South Asia.

Half the people we seek to help live in India,
Pakistan and Turkey. The fate of freedom in the
world rests heavily on the f ortmies of these three
countries.

Each is engaged in a powerful effort to fight
poverty, to grow more and better food, and to
control population. If they succeed, and in so
doing prove the effectiveness of free institutions,
the lesson will be heard and heeded around the
world.

This is a year of special importance for all
thi'ee countries,

India

India has survived two successive years of
the worst drought of this century. Even as she
fought to save her people from starvation, she
prepared for the day when the monsoon rains
would return to normal. That day has come.
India is now harvesting the greatest gi-ain crop
in her histoi-y. With this crop, India can begin a
dramatic recovery which could lay the ground-
work for sustained growth.

India must have the foreign exchange to take
advantage of this year of opportunity. A farmer
cannot use the miracle seed which would double
or triple his yield unless he can get twice as
much fertilizer as he used for the old seeds. A
fertilizer distributor cannot sell that much more
fertilizer unless it can be imported. An im-
porter cannot buy it unless he can get foreign
exchange from the Government. India will not
have that foreign exchange unless the weathly
countries of the world are willing to lend it in
sufficient quantities at reasonable terms.

This is the crux of the matter. If we and other
wealthy countries can provide the loans, we
have niuch to look forward to. If we cannot, his-
tory will rightly label us penny -wise and poimd-
foolish.

Pahktan

Pakistan, though also plagued by drought,
has continued its excellent progress of the past
few years. Her development budget has been in-
creased. Her military budget has been reduced.
Agricultural production is growing faster than
population. Private investment has exceeded
expectations.

Now the Government of Pakistan has under-
taken further steps to reform its economic poli-
cies— to free up its economy and give more play
to the market. These reforms are acts of wisdom
and courage, but they require foreign exchange
to back them up. Pakistan deserves our help.

Turkey

Turkey's economic record is outstanding. Her
gross national product has grown an average of
six percent annually since 1962. Industrial out-
put has grown nine percent per year. Food pro-
duction is growing much faster than population
growth.

Turkey's own savings now finance some 90
percent of her gross investment. Difficult prob-
lems remain, but we may now realistically look
forward to the day — in the early 1970's — when
Turkey will no longer require AID's help.

AFKICA

/ recommend $179 million for Africa.

Just one year ago, I informed the Congress of
a shift in emphasis in our aid policy for Africa.
We moved promptly to put it into effect :

— There will be 21 U.S. bilateral programs in
Africa in Fiscal 1969, compared to 35 last year.

— Most of our bilateral programs will be
phased out in eleven more countries in the fol-
lowing year.

— Expanded regional and international proj-
ects will meet the development needs of the
coimtries where bilateral aid is ended.

The past year has provided further evidence
that this support for regional economic institu-
tions and projects is a sensible approach to
Africa's problems. It expands markets. It en-
courages economies of scale. It gives meaningful
evidence of our concern and interest in African
development.

This is not a policy of withdrawal from
Africa. It is a policy of concentration and of

326

DEPARTMENT OF STATE BULLETIN

ij

maximum encouragement of regional coopera-
tion. A continent of 250 million people has set
out -with determination on the long road to de-
velopment. We intend to help them.

VIETNAM

/ recommend a program of S^SO mUUon to
carry forward our economic assistance ejfort in
Vietnam,. This eflFort will be intensified by the
need to restore and reconstruct the cities and
towns attacked in recent days.

Defense of Vietnam requires more than suc-
cess on the battlefield. The people of Vietnam
are building the economic and social base to pre-
serve the independence we are helping them to
defend.

Since 1965, when galloping inflation loomed
and continuity of govei'nment was repeatedly
destroyed, the people of Vietnam have achieved
two major civil victories which rank with any
gallantry in combat :

— They have written a Constitution and es-
tablished representative local and national
governments through free elections, despite a
concerted campaign of terror, assassination and
intimidation.

— Eunaway inflation has been averted, and
the foundation laid for a thriving economy,
despite the enormous stresses of war.

But still the innocent victims of war and ter-
rorism must be cared for ; persistent inflationary
pressures must continue to be controlled; and
the many problems faced by a new government
under wartime conditions must be overcome.
The framework for economic and social pro-
gress has been established. We must help the
Vietnamese people to build the institutions
needed to make it work.

In the coming year, we will :

— Improve our assistance to refugees and
civilian casualties. The wages of aggression are
always paid in the blood and misery of the in-
nocent. Our determination to resist aggression
must be matched by our compassion for its
helpless victims.

— Intensify agricultural programs aimed at
increasing rice production by 50% in the next
four years.

— Concentrate our educational etfort toward
the Government's goal of virtually universal
elementary education by 1971.

— Stress, in our import programs, the key
commodities needed for agricultural and in-
dustrial growth.

The rapid program expansion of the past two
years — in dollars, people and diversity of ac-
tivities— is ended. The emphasis in the coming
year will be on concentration of resources on
the most important current programs.

We will pursue these constructive programs
in Vietnam with the same energy and determi-
nation with which we resist aggression. They
are just as vital to our ultimate success.

EAST ASIA

/ recommend $277 million for East Asia.

For twenty years resistance to attack and
subversion has been current and urgent busi-
ness for the nations of East Asia. The United
States has helped to make this resistance effec-
tive. We must continue to do so, particularly
in Laos and Thailand.

But this year the larger portion of our aid to
East Asian countries will be focused directly on
the work of development. Asians know — as we
do — that in the long run, economic, social and
political development offer the best protection
against subversion and attack. Despite commu-
nist pressure, they are getting on with the job.
For example :

— For the last three years, the Korean econ-
omy has grown by a phenomenal 10 percent per
year; domestic revenues have doubled since
1965; exports have grown tenfold in the last
seven years. Population growth has fallen from
2.9 percent in 1962 to 2.5 percent today, and a
strong national population program is contrib-
uting to further reductions. We are now able to
plan for orderly reduction of U.S. economic aid
as the capacity for self-support grows. Despite
recent pressure from the North, the momentum
and self-confidence of this gallant nation must
be — and will be — maintained.

— Indonesia has stepped away from the brink
of communist domination and economic chaos.
She has undertaken the hard course of stabiliza-
tion and rehabilitation and is moving toward
development. She needs help from the U.S. and
other donors, who are working together with the
International Monetary Fund and the World
Bank. It is overwhelmingly in our interest to
provide it.

MARCH 4, 1968

327

Military Assistance Programs

/ recommend $4^0 mJUion for grant Military
Assistance Programs imder the Foreign Assist-
ance Act.

More than three-quarters of our grant mili-
tary assistance will support the military efforts
of nations on the perimeter of the commimist
world and those nations where the U.S. main-
tains defense installations important to our own
national security. These programs are a vital
link in our own defense effort and an integral
part of Free World collective security.

Elsewhere our programs focus on building
the internal security necessary for lasting de-
velopment progress.

Our aid — economic as well as military — must
not reward nations which divert scarce resources
to unnecessary military expenditures. Most less-
developed countries have resisted large expan-
sion of military expenditures. Their military
budgets have remamed a small portion of
national income. Their leaders have made
politically difficult decisions to resist pressure
to acquire large amounts of new and expensive
weapons.

We must help them maintain this record and
improve it. We will give great weight to efforts
to keep military expenditures at minimum es-
sential levels when considering a country's re-
quests for economic aid.

In the coming year, we will work directly
with the less-developed nations and examine
our own programs, country-by-country, to deal
more effectively with this i^roblem. In addition,
we will explore other approaches toward reduc-
ing the danger of arms races among less-devel-
oped countries.

Over the past several years, we have signifi-
cantly reduced our grant military aid wherever
possible. ^Vliere new equipment is essential, we
have provided it more and more through cash
and credit sales. I will submit separate legisla-
tion to authorize necessary military sales and
provide for credit terms where justified.

Our militai-y assistance programs will pro-
vide only what is needed for legitimate defense
and internal security needs. We wUl do no more.
We can afford to do no less.

Special Assistance to the Republic of Korea

The internal peace and order of this stead-
fast ally is once again threatened from the
North.

These threats summon Korea to strengthen
further her defenses and her capacity to deter
aggi'ession.

We must help.

/ propose tluit Congress appropriate irwme-
diately an additional $100 million far military
assistance to the Eeptiblic of Korea.

This can be accomplished within the authoriz-
ing legislation already enacted.

With this additional help, the Armed Forces
of the Republic of Korea can gain new strength
through the acquisition of aircraft and anti-
aircraft equipment, naval radar, patrol craft,
ammunition and other supplies.

America's Choice

Foreign aid serves our national interest. It
expresses our basic humanity. It may not always
be popular, but it is right.

The peoples we seek to help are committed
to change. This is an immutable fact of our time.
The only questions are whether change will be
peaceful or violent, whether it will liberate or
enslave, whether it will build a community of
free and prosperous nations or sentence the
world to endless strife between rich and poor.

Foreigii aid is the Ainerican answer to this
question. It is a commitment to conscience as
well as to country. It is a matter of national
tradition as well as national security.

Last year some Americans forgot that tra-
dition. My foreign aid request, already the
smallest in history, was reduced by almost
one-third.

The effects of that cut go much deeper
than the fields which lie fallow, the factories
not built, or the hospitals without modern
equipment.

Our Ambassadors all over the developing
world report the deep and searching questions
they are being asked. Has America resigned her
leadership of the cause of freedom? Has she
abandoned to fate the weak and the striving who
are depending on her help ?

This Congress can give a resounding answer
to these questions by enacting the full amount
I have requested. I do not propose this as a
partisan measure. I propose it as an extension
of the humane statesmanship of both parties
for more than twenty years.

I said in my State of the Union address ^ that
it is not America's resources that are being

' Ibid., Feb. 5, 1968, p. 161.

328

DEPARTSIENT OF STATE BULLETIN

tested, but her will. This is nowhere more true
than in the developing countries where our help
is a crucial margin between peaceful change
and violent disaster.
I urge the Congress to meet this test.

Lyndon B. Johnson

The White House,
February 8, 1968.

International Grains Arrangement
Transmitted to the Senate

Message From, President Johnson

To the Senate of the United States:

Today I submit to the Senate for its advice
and consent the International Grains Ai-range-
ment of 1967.^

Tbis Arrangement is another step forward in
our overall elTort to strengthen and stabilize our
farm economy, to improve our balance of pay-
ments, and to share our abundance with those
in need.

The Arrangement is an outgrowth of the
Kennedy Eound of trade negotiations. It was
agreed to last August at the International
^Vheat Conference in Rome. It has already been
signed by most of the countries that are major
exporters and importers of grain.

The Arrangement is in two parts :

— the "Wlieat Trade Convention, which will
provide new insurance against falling prices in
the wheat export trade,

— and the Food Aid Convention, which will
bring wheat exporting and wheat importing
nations into partnership in the War on Hunger.

The WHEiVT Trade Convention

The "Wlieat Trade Convention will help to
stabilize prices in world commercial trade.

It sets minimum and maximum prices for
wheat moving in international trade at levels
substantially higher than those specified in the
International Wlieat Agreement of 1962. This
will give our farmers additional pi-otection
against price cutting in world markets.

At the same time, the Arrangement includes
pro\'isions to insure that our wheat will be
priced competitively in world markets; and
that no exporting member country is placed at

a disadvantage because of changes in market
conditions.

Importing countries also receive protection
and benefits under the Convention. In periods
of shortage importing member countries will be
able to purchase their normal coimnercial re-
quirements at the established maximum price.
After this requirement has been met, exporting
member countries will be free to sell above the
maximum price.

America's wheat farmers have supported the
pricing provisions of previous wlieat agree-
ments. I am confident they will welcome the
stronger price assurances of this Arrangement.

The Food Aid Convention

The Food Aid Convention marks an impor-
tant new international initiative in the assault
on hmiger throughout the world.

The countries participating in this Conven-
tion—both exiDorting and importing nations —
undertake to establish a regular pi-ogram of
food aid over the next three years.

The program calls for 4.5 million tons of
grain to be supplied each year ; 4.2 million tons
are already subscribed.

— The U.S. will supply 1.9 million tons in
grains — under the authority of the Food for
Freedom program.

— Other countries will supply 2.6 million
tons — either in the form of grain or its cash
equivalent.

This new program is a major joint effort to
supply wheat and other food grains to needy
nations on a continuing basis. It will help the
developing nations of the world meet their food
deficits while they work to expand their own
food production. As these countries prosper and
grow, many will become cash customers for
agricultural products.

I enclose, for the infonnation of the Senate,
the report of the Secretary of State ^ on the In-
ternational Grains An-angement.

I urge the Senate to give it early considera-
tion.

Lyndon B. Johnson

The White House,
January 25, 1968.

' Eor text, see S. Ex. A, 90th Cong., 2d sess.
' For text, see ihid.

MARCH 4, 1968

329

Third Annual Report on the International
CofFee Agreement Transmitted to Congress

PRESIDENT'S LETTER OF TRANSMIHAL

White House press release dated January 22

To the Congress of the United States:

I am transmitting to you my Third Annual
Report on the operation of the International
Coilee Agreement as required by P.L. 89-23.

During the past year, the 65 member coun-
tries of the Agreement representing over 98
percent of the world trade in cofTee continued
to work together to stabilize coffee prices at
levels equitable to both producers and con-
smuers. Controls over export quotas were
strengthened. Selective quota adjustments as-
sured consumers of an adequate supply of
various types of coffee at reasonable price levels.

The present Agreement expires on Septem-
ber 30 of this year. Negotiations on an extended
Agreement are underway with emphasis on
production controls and a diversification and
development fund. These measures are designed
to hasten the day when production is brought
into balance with demand and the controls being:
maplemented under the Agreement can be placed
on a standby basis.

The International Coffee Agreement con-
tinues to be of major benefit to both producers
and consumers and merits the further support
of the United States.

Lyndon B. Johnson

The White House,
January 22, 1968

TEXT OF REPORT

Introduction

This report is submitted in accordance with
Section 5 of the International Coffee Agreement
Act of 1965.

The International Coffee Agreement was
negotiated at the United Nations during July,
August and September 1962 and signed by the

United States on September 28, 1962. The Senate
gave its advice and consent to the ratification
of the Agreement on May 21, 1963 and on
December 27, 1963 the United States deposited
its instrument of ratification. The Agreement
entered into force provisionally in the summer
of 1963 and definitively in December 1963. The
implementing legislation — the International
Coffee Agreement Act of 1965 — to enable the
United States to meet all its obligations under
the Agreement, came into effect on May 22,
1965.

The objectives of the Agreement, as set out
in Article 1, are as follows :

1. to achieve a reasonable balance between
supply and demand on a basis which will as-
sure adequate supplies of coffee to consiuners
and markets for coffee to producers at equitable
prices, and which will bring about long-term
equilibrium between production and consump-
tion ;

2. to alleviate the serious hardship caused by
burdensome surpluses and excessive fluctuations
in the prices of coffee to the detrmient of tlie
interests of both producers and consumers;

3. to contribute to the development of pro-
ductive resources and to the promotion and
maintenance of employment and income in the
member countries, thereby helping to bring
about fair wages, higher living standards, and
better working conditions ;

4. to assist in increasing the purchasing power
of coffee-exporting countries by keeping prices
at equitable levels and by increasing consump-
tion ;

5. to encourage the consimiption of coffee by
every possible means ; and

6. in general, in recognition of the relation-
ship of the trade in coffee to the economic
stability of markets for industrial products, to
further international cooperation in connec-
tion with world coffee problems.

The world coffee economy of the past has been

330

DEPABTMENT OF STATE BULLETIN

FIGURE 1

U. S. Ctnts Per Pound. New fork
.90

GREEN COFFEE SPOT PRICES

ANNUAL AVERAGES - 1951-1967

•.'Colombia MAMS

Brazil SAHIOS 4 S'\X.
\

.28 -

1951

'52

■54

1955

'58

I9ED

•63

19E5

•67
[Nov. 30]

aptly characterized as a "boom-or-bust" econ-
omy. Coffee is a tree crop ; the trees start bear-
ing about five years after they are phinted.
Tlius, the production response to increased de-
mand is inevitably delayed. On the other hand,
fanners have tended to overrespond to demand
by planting more trees than needed. These
factors have largely been responsible for the
sharp fluctuation in coffee prices in the past 15
years as shown in the chart [figure 1].

In the first ten years following World War
II, demand for coffee was strong, pi-ices rose
as demand outstripped supply, and as a result
there were substantial new plantings. A short
crop and peak prices in 1954 led farmers
tluoughout the coffee growing world to under-
take another new wave of plantings. By 1959-
60, total world exportable production had
reached 62 million bags (one bag equals 132
pounds) whereas world consumption outside
the producing countries was only 37 million
bags. In the face of such surpluses, prices fell
sharply and the prospects of any improvement
in prices were dim. Coffee growers were in dif-
ficulty and the economies of many producing
countries were under pressure.

Fluctuating coffee prices hurt many of the

developing coimtries of Latin America, Africa
and Asia in two ways. First, sharp declines can
be disastrous to all those connected with the
coffee economj^, and especially to farmers, many
of whom operate small holdings. Second, be-
cause so many of the countries are heavily de-
pendent on coffee exports for earning foreign
exchange, sharp fluctuations in coffee prices can
seriously disrupt economic development pro-
grams. Thus, the efforts of the United States
under the Alliance for Progress and other aid
programs have sometimes been hindered by this
liistoric pattern of sharp price changes. The
chart [figure 2] shows the extent to which 13
countries depend upon coffee for foreign ex-
change earnings.

A major aim of the International Coffee
Agreement is to smooth out price fluctuations
so as (i) to provide a steady and growing earn-
ings base to the coffee producing countries as
world consumption rises, (ii) to maintain rea-
sonable prices for coffee consumers, and (iii)
to enlarge the role of the coffee economy in con-
tributing to the gi'owth of the over-all economy.
In addition, it is hoped that the stabilization of
the coffee market will encourage the transfer of
resources from the production of excess coffee

MARCH 4, 1968

331

FIGURE 2

IMPORTANCE OF COFFEE EXPORTS TO 13 COFFEE - PRODUCING COUNTRIES'

1964-1966 Average

VALUE OF COFFEE EXPORTS AS PER CENT OF TOTAL EXPORTS

COLOMBIA

ETHIOPIA

UGANDA

HAITI

El SALVADOR

BRAZIL

GUATEMALA

COSTA RICA

7

KENYA

MALAGASY REPUBLIC

TOGO

CAMEROON

67%

61%

52%
52%

50%

'A ^^'^'

45%

41%

IVORY COAST wm///mm///////////////////////m -^v

31%

30%

29%

25%

Data Suppled by International Coltee Organization.

'liiese 13 CoffeeExportins Countties, Produce lliree Quarters ol Exportalile World CoKee.

to other crops for which there is an unfilled
demand.

Both because of our concern for the steady
economic development of the coffee growing
countries and because we are far-and-away the
largest coffee consuming country, the United
States has an important role to play in main-
taining the effectiveness of the International
Coffee Agreement. The United States' share of
world coffee imports is demonstrated in the
chart [figure 3] .

I. Operation of the International CofFee Agree-
ment

The Coffee Situation

From the negotiation of the Agreement in the
Summer of 1962 through the Summer of 1963,
large surpluses continued to overhang the mar-
ket and to depress prices. In August 1963, prices
reached the lowest point since 1948, resulting in
serious strains on the economies of the produc-
ing countries.

In the Autumn of 1963 the situation was
changed abruptly by news of severe frosts and
drought in the principal growing region of Bra-
zil. Buyers feared that they might not be able
to obtain the quantities and grades of coffee
needed when the Brazilian crop was harvested
in the Smnmer of 1964 and panic buying started,
initially for Brazilian coffee, and subsequently
for coffee of all types, in order to build up in-
ventories. Apprehensive that the excess price
increase of 1954 might be repeated, we moved
promptly within the framework of the Agree-
ment to do everything possible to insure that
adequate supplies would be available. As a re-
sult, the price rise was halted by JNIarch 1964,
and the Agreement had met its first serious
test — ironically of holding prices down rather
than the anticipated necessity of supporting
them.

Improved information on production and
stocks has made clear that supplies of coffee are
more than ample to meet the world's needs and
that only the restraint on exports provided by

332

DEPARTMENT OF STATE BULLETIN

the Agreement prevents a disastrous general
price decline. Annex C ^ sets out the U.S. De-
partment of Agriculture's estimates of export-
able production in recent years. Annex D shows
export quotas for the current coffee year.

Throughout 1964 the prices of most Latin
American coffee varied between 45 and 50 cents
per pound. At the same time, African Robusta
coffees began a long decline as the sellers en-
gaged in strong price competition with each
other as a result of expected large crops.

In 1965 a large Brazilian crop again produced
some weakness in Latin American prices. Afri-
can prices, however, rose to more normal levels
as the principal African producing coimtries,
working through the Inter-African Coffee Or-
ganization, effectively coordinated their mar-
keting policies in an atmosphere of mutual trust.

Price weakness again became general in 1966
and was somewhat accentuated toward the end
of the j'ear. Tlie weakness was generally at-
tributed to imcertainty as to whether quotas
imder the Agreement would be complied with.
In an effort to improve the market situation,
steps were taken during the year to reduce ship-
ments in excess of quotas and to begin to deal
with the long-range problem of overproduction.

Prices in 1967 remained at about the 1966
levels. Further steps were taken to reduce the
possibility of shipments in excess of quotas, in-
cluding the implementation of an export quota
stamp plan and tighter control over diversions
via non-quota markets.

Price movements in 1965-67 are shown in the
chart [figure 4].

Mechanics of the Agreement

Tlie principal governing body established by
the Agreement is the International Coffee
Council, composed of representatives of the 65
member governments. Preliminary work for
Council decisions is performed by a 14-member

FIGURE 3

WORLD IMPORTS OF COFFEE

' Included in the report are five annexes, which are
not printed here. They are :

Annex A: U.S. Customs Regulations: Import Quotas
on Coffee from Xonmember Countries of International
Coffee Organization.

Annex B : Composition and Voting of the Executive
Board for 1967-68.

Annex C: Green Coffee: World exportable produc-
tion for the marketing year 1967-68, with compari-
sons (U.S. Department of Agriculture).

Annex D : Coffee Tear 1967-68, Annual Quotas and
Export Entitlements.

Annex E : Average Quarterl.y Retail Prices on
Coffee, 1064-67 (Bureau of Labor Statistics).

1966

MILIIONS or BIGS

\10 .19

.1

TOTAL 49,900,000 BMS

Executive Board (see Annex B) on which all
members are represented by elected delegates.
Membership in the Organization includes 40
exporting members, which account for about
99 percent of the world's exports, and 25 im-
porting comitries, which import about 97 per-
cent of the coffee traded internationally. In
1967 Jamaica, Liberia, Israel, Bolivia, and Cy-
prus joined the Agreement.

The exporting members together hold 1,000
votes and the importing members 1,000 votes
and no one member may hold more than 400
votes. Important Council decisions require a
two-thirds distributed majority, that is, a two-
thirds vote of importing members and export-
ing members voting separately. The exporting
members are assigned votes in approximate pro-
portion to their individual basic export quotas.
The importing members are assigned votes in
approximate proportion to their respective im-
ports of coffee. The United States holds 400
votes, reflecting its important position in world
coffee trade, and thus is able to play a key role
in the operation of the Agreement.

The Organization implements Council and
Executive Board decisions, maintains statistics
of exports and imports, carries out independent
studies of coffee problems, and provides staff for
meetings of the Council and the Board. The
total of assessments for administrative costs for

MARCH 4, 1968

333

FIGURE 4

GREEN COFFEE SPOT PRICES

MONTHLY AVERAGES - 1965-1967

U.S. Cents Per Pound, New York

.50

.10

-

-

.70

-

-

.60

-

-

.50
.40

7-— — "*» -,•-•———•••""■■

/Colombia MAMS

;;;; .'.Gpaje'^ala PRIME W •-.

^^ Brazil SIIIIIOS 4 '''^■'

"t"-.;r..

-

.30

.20

" ^Uganda W 8, C

-

.10

1 1 I 1 1 1 ! I 1 I I

1 1 I I I 1 1 1 1 1 1

1 1 I I I I I I I 1

JAN FEB MAR APR MAY lUN JUL AUG SEP OCT NOV DEC JAN FEB MAR APR MAY
1965

JUN JUL AUG SEP OCT NOV DEC JAN FEB MtRAPR MAY JUN JUL AUG SEP OCT NOV DEC

1966 1967

1967-68 was $750,000 of which the U.S. share
was 20 percent.

The chief administrative officer of the Or-
ganization is the Executive Director of tlie Or-
ganization. Selected by tlie Council, he directs
the staff of the Secretariat and helps to coordi-
nate all the activities of the Organization. Since
the inception of the Agreement the Executive
Director has been Joao Oliveiro Santos, an in-
ternational civil servant with extensive experi-
ence in the intergovernmental coffee consulta-
tions.

Procedures for Setting Quotas

The heart of the Coffee Agreement is the sys-
tem of export quotas. The Council meets each
year in August to estimate world demand for
coffee in the following year. In the light of that
estimate and an estimate of what non-member
countries will export, the Council sets the total
amiual export quota. Tlie total is divided among
the export ing-country members according to
the percentage (basic quotas) established in the

Agreement. (See Annex D) If the member
countries shijj no more coffee than permitted by
their export quotas and the estimated demand
has been accurately forecast, prices should stay
reasonably stable.

In practice, it has sometimes been found
necessary to make arrangements for altering
export quotas during the year and to adopt ad-
ditional measures to adjust supplies to market
demands. The present selective method for ad-
justing quotas in response to price changes is
described in detail in Section II of this report,
"Summary of Actions to Protect Consumers."

Administrative Measv/res

Under the export quota system, each coffee
producing member of the Agreement is given
authorization to export to quota markets a
certain quantity of coffee — and no more — each
year. A graduated series of penalties, culminat-
ing in expulsion, is provided for violators. In
the past, it has proven difficult to assure full
compliance with quotas. Some countries have

334

DEPARTMENT OF STATE BULLETIN

taken advantage of loopholes in the Agreement,
while others lacked export control arrangements
adequate to prevent overshipment. By the Simi-
mer of 1966 it was clear that considerable quan-
tities of above-quota coffee were reaching the
world's markets through such means as :

a) shipment of member country coffee via
non-member producing countries labelled as
produce of the non-member country;

b) diversion to quota markets of member
country coffee ostensibly destined for sale in
non-quota markets (shipments for certain tra-
ditionally non-coffee-drinking countries are not
charged against quotas in order to encourage
promotional sales that will eventually increase
coffee consimiption) ;

c) deliberate overshipment beyond allotted
quotas.

Therefore, the Council in August 1966, and
again in August 1967, addressed itself to new
measures to improve the effectiveness of the
Agreement.

In 1965, large quantities of member country
coffee were escaping export quota controls by
being transshipped through non-member im-
porting countries, as regulations under the
Agreement did not then require certificates from
the country of origin for such coffee. In April
1966, the importing members introduced con-
trols over such trade in response to a Coimcil
resolution requiring that member country coffee
transshipped through a non-member country
must be accompanied by a proper Certificate
of Origin issued by the quota control authori-
ties in the country of true origin.

Although this loophole was closed, traders
continued to ship member country coffee
through non-member producing countries,
claiming that it was produced in the non-
member country. Article 45 of the Agreement
provides that all members shall set up quanti-
tative import limitations on coffee from non-
member countries if such shipments are dis-
turbing the exports of members. The Council
had not previously invoked this provision be-
cause shipments from non-members had been
minimal. "When, however, it was clear that ship-
ments far in excess of production were appear-
ing from some countries, the Council in Sep-
tember 1966 decided to invoke this section of
the Agreement. Importing countries were to
restrict their imports fi'om non-members "as

soon as practicable and in any event not later
than January 1, 1967." The pertinent U.S. regu-
lation appears in Annex A.

These import limitations have not caused any
significant change in the way U.S. coffee buyers
carry out their business. The quantities involved
are small — amoimting to less than one-half of
one percent of United States coffee imports.
Furthermore, when any non-member accedes to
the Agreement, the import limitations for that
country are lifted since the coffee from that
country is then controlled by its assigned export
quota. For example, Kenya, Liberia, and
Bolivia were removed from the list of non-
members in 1967 following their accession.

In order to prevent coffee destined for "new
markets" (non-quota markets) from reaching
the traditional coffee importing countries, the
Coimcil, in September 1966, authorized import-
ing members to regard Certificates of Origin
marked for new markets as not valid for import
into their countries. The United States issued
regulations under this authority on November
18, 1966. In September 1967, the Council
adopted additional measures which require
producing members to report more promptly
their shipments to non-quota markets with the
view to limiting shipments to these markets to
the amount actually needed for consumption
therein.

The Certificate of Origin system, wliich is
the Agreement's basic control mechanism, was
greatly strengthened by the above-described
measures. However, since these arrangements
could not prevent overshipments of quotas,
some further change was necessary. After con-
sultation with the coffee industry, the United
States supported a Council resolution to intro-
duce Coffee Export Stamps to validate ship-
ments within quotas. Under this plan, which
became effective on April 1, 1967, Certificates
of Origin are not valid for entry unless they
bear stamps corresponding with the weight of
the shipment. The Coffee Organization issues
stamps only up to the amount of the country's
quota, thereby establishing effective control
over the quantities of coffee which may be ex-
ported to quota markets.

Thus far, the stamp system has worked effec-
tively. The Council, in September 1967,
strengthened it further by providing for a re-
verification procedure in order to prevent old,
unstamped Certificates of Origin or reexport
from l)eing used to document coffee. The pur-

MAKCH 4, 1968

335

pose of this was to exclude coffee not properly
documented from international trade among
members. This was particularly helpful in
preventing questionable shipments via free
ports.

Well before the Council's action on new ad-
ministrative controls, the National Coffee As-
sociation of the United States had called upon
U.S. representatives to work for effective and
uniform enforcement of the Agreement. The
industi-y's practical and foi-thright suggestions
were a major factor in obtaining international
agreement to the measures adopted. None of the
new measures are expected to cause any sig-
nificant change in the U.S. industry's trade
practices. Except for the limitation on the rela-
tively small imports from non-member coun-
tries, many of which have already been removed
as they became members, buyers remain free to
buy wherever they wish and to compete freely
for the quantities all tlie producing countries
can sell within their worldwide export quotas.

Measures to Increase Consumftion

In recognition of the importance of promo-
tional activities in increasing consumption, the
exporting members of the Agreement make
regular contributions to the World Coffee Pro-
motion Committee established by the Agree-
ment. Major campaigns involving an annual ex-
penditure of nearly $8 million began in 1966 in
the principal coffee consimiing countries. A
broad program in the United States was con-
centrated on television advertising emphasiz-
ing the "Think Drink" slogan. The program
also includes research and publicity centered on
brewing a better cup of coffee. The President of
the National Coffee Association serves as Chair-
man of the U.S.-Canadian Coffee Promotion
Conunittee. Nearly $6 million will be spent this
year in the United Stateis and Canada.

II. Summary of Actions to Protect Consumers

A primary concern of consumers is that the
International Coffee Agreement should operate
so as to provide adequate supplies of coffee at
reasonable prices. Actions taken during the past
two years lend assurance that this concern will
be met in a satisfactory manner.

In broad outline, the Agreement provides for
assuring supplies through an annual setting by
the Council of the total quantity of export

quotas. Since demand is fairly predictable and
changes slowly, filing the available supply
roughly establishes an amiual price range.

Experience has demonstrated, however, that
supply adjustments are needed during the year.
To meet this need, the Council in March 1965
established a semi-automatic system for adjust-
ing quotas in relation to changes in the over-all
price level. In siunmary, the system provided
that if the average daily price on the New York
market remained above or below a 38-^4 cent
price bracket for 15 days export quotas would
be raised or lowered in an attempt to bring
supplies into better balance with demand. The
average daily price was computed by taking
equal weights of key varieties in the following
groups :

(a) Mild Arabica coffee (from Colombia,
Central America and a few African countries)

(b) Unwashed Arabica coffee (from Brazil
and Ethiopia)

(c) Eobusta coffee (from Ivory Coast,
Uganda and Angola, and several other African
countries) .

This system was an improvement, but it
proved insufficiently sensitive to the market for
specific types of coffee. For example, while the
prices of other coffees were reasonably stable,
the price of Robusta coffee varied by as much as
12 cents a pound during the 1965-66 coffee year.
In order to make the system more flexible and
more responsive to consumers' needs, the U.S.
representatives to the Coffee Council early in
1966 began to consult with the U.S. coffee indus-
try as to how to improve the quota adjustment
mechanism.

By the time of the Coffee Council meeting in
August 1966, there had been general discussion
in the United States and other consuming coun-
tries as well as in most of the producing coun-
tries of a more flexible system. This resulted in
modification of the system of selective quota
adjustment for the coffee year 1966-67. Under
this system the quota of each of four different
major types of coffee (Colombian Milds, Mild
Arabica, Unwashed Arabica and Robusta)
could be adjusted separately, reflecting market
demand and price movement for tliat type of
coffee. This, of course, required the establish-
ment of price brackets for each of the four
types.

This modified system worked reasonably well

336

DEPARTMENT OF STATE BULLETIN

t'l-oin its inception. Its effectiveness was ham-
pered, however, because export quota controls
did not work as satisfactorily in 1966-G7 as had
been hoped. After April 1, 1967, when the
stamp system entered into effect, the selectivity
sj-stem's operation became smoother and more
satisfactory-.

The selectivity system was continued for the
coffee year 1967-68 with only minor modifica-
tions. Price brackets for the year were lowered
an average of two cents a pound from those
established for 1966-67. The price brackets for
1966-67 and 1967-68 are shown below:

Colombian Milds
Other Mild cofifees
Unwashed Arabica

cofifees
Robusta coffees

me-er
43.5 to 47..50
40.5 to 44.50

37.5 to 41.50
30.5 to 34.50

1967-68

38.75 to 42.750
37.25 to 41.250

35.25 to 39.250
30.50 to 34.250

The selectivity system is well designed to
meet the interests of the U.S. consumer by as-
suring an adequate supply of the various types
of coffee at reasonable price levels.

Experience in the operation of the Agreement
indicates that producing comitries have not
attempted to "gouge" consuming countries by
seeking to set quotas so as to force prices to
unreasonable levels. Both consuming and pro-
ducing countries have, in fact, sought to work
together to achieve market stability through
bringing about a reasonable balance between
supply and demand.

During the September 1967 meeting, the
Council also provided for exporting coimtries
to adopt contract registration procedures, both
to reduce the possibility that bona fide contracts
would be made for the sale of coffee in excess
of quotas and to insure that contracts properly
entered into would not be jeopardized by a
reduction of quotas. Furthermore, members
agreed not to interfere with the arbitration of
commercial disputes between coffee buyers and
sellers in the event that contracts caimot be ful-
filled because of regulations established under
the Agreement.

Under the provisions of the Agreement, the
decision on the annual export quota requires a
distributed two-thirds majority vote of the
importers and exporters groups voting sepa-
rately. The United States, by Anrtue of its 400
votes in the Council, has the means to assure
that annual quotas are set at reasonable levels

and that the price brackets are satisfactory to
consumers. Indeed, unless the United States
concurs in the annual quota decision, the entire
quota mechanism would not be oj^erative for
that year.

The net result of these actions has been a
general stability in the price of coffee paid by
U.S. consumers under the Agreement. From
1964 through the first three quarters of 1967
the average quarterly retail price of a regular
one-pound bag of coffee was 69.2 cents; this
compares with an average price of 83.3 cents in
the nine years preceding the Agreement. Annex
E provides data on retail prices from 1964
through the first three quarters of 1967.

III. Problems

The present International Coffee Agreement
will expire on September 30, 1968. Two Inter-
national Coffee Council sessions in the latter
part of 1967 discussed extensively the contents
of an extended and modified Agreement. A con-
sensus was reached during these meetings on
most of the provisions to be included in an
extended Agreement. Among the most impor-
tant problems to be resolved was that of basic
quotas. A new formula for their allocation was
approved by exporting and importing countries
at the Council session in late 1967. Since basic
quotas determine the share of the world market
producing countries are to obtain, this is a vital
issue for all producers. The fact that it was
resolved in a generally satisfactory fashion is
a major step forward in the negotiation of an
extended Agreement. In addition, agreement
was reached on the revision of several other key
articles. From our point of view, these revisions
significantly improve the Agreement.

The Council sessions in 1967, however, did
not result in full agreement on the text of an
extended and modified Agreement. Five major
problems remained for negotiation, all of which
required satisfactory resolution if the Agree-
ment is to be extended. These problems were :

The Selective System of Quota Adjustments

As a coffee consumer, the United States needs
to be assured of adequate supplies of reasonably
priced coffee. The selectivity system outlined
above, which adjusts quotas for various kinds of
coffee upwards and downwards as their market
prices rise and fall, helps to provide such as-

MAKCH 4, 19 68

337

surance. The United States has supported an
amendment to the International Coffee Agree-
ment which would confirm the Council's au-
thority to operate a system of selective quota
adjustments.

Cojfee Diversification Fwnd

The United States has an interest in assuring
that the Coffee Agreement is used to bring
about an orderly adjustment of production to
foreseeable demand and in avoiding price fluc-
tuations that damage the producer without
benefitting the consumer. In addition, the
general interest of the United States in the
economic and political well-being of coffee-
growing developing comitries dictates encour-
agement of wise long-range production policies.

The United States believes, therefore, that
the period of relative price stability brought
about by the Agreement should be used con-
structively by producing coimtries. They should
be encouraged to diversify away fi-om produc-
ing surplus and imwanted coffee, into more pro-
ductive activities. It is obvious that the re-
sources used to produce coffee that cannot be
sold are being wasted ; coffee-growing countries
can ill afford such waste.

The United States has therefore strongly
supported the efforts made by some producing
countries to establish an International Coffee
Diversification Fund. In essence this Fund is
intended to supply part of the financing neces-
sary in order to embark upon a systematic and
orderly international program of diversification
out of coffee into more profitable crops. All
too often the countries which grow surplus cof-
fee are too poor to finance out of their own re-
sources any diversification program. The Fund,
which would be financed by compulsoi-y pro-
ducer contributions on coffee sold under the
Agreement, would supply seed capital necessary
to support the efforts of such countries at di-
versification. The United States has offered to
lend this Fund up to 15 million dollars and has
offered to match contributions from other con-
sumers up to an additional $15 million subject,
of course, to evidence that a satisfactory Fund
has been established.

Production Goals and Controls

As part of the effort to bring the world's sup-
ply of coffee more closely into line with fore-
seeable demand, extended discussions were held
during the Council sessions m 1967 over pro-

posals to strengthen existing Agreement provi-
sions on production goals and controls and to
establish realistic production goals. The articles
contemplated would also establish sanctions in
the event of failure on the part of producers to
establish and observe production goals.

This is another issue of vital concern to pro-
ducers. Proceeds from coffee exports represent
a significant part of the export earnings for
many developing countries and production
goals, when they are established, will have a-
direct impact on such producers' earnings. It is
not surprising that some controversy has de-
veloped over this provision.

The United States is seeking to avoid the
establislunent of production goals which are
either unrealistically high or unreal istically
low. Excessively high production goals would
postpone the day when coffee supply and de-
mand would be balanced ; excessively low goals
could result in world shortages of coffee and
thereby induce price rises.

Tariff Preferences and Internal Taxes on Coffee

The United States has recognized that efforts
should be made to remove obstacles to increased
coffee consumption, including tariffs and in-
ternal taxes, as part of the over-all effort to
bring world supply and demand into better bal-
ance and to put all coffee exporting countries
on the same basis with regard to access to con-
sumer markets. The United States supports
proposals made within the Coffee Organization
to phase out existing discriminatory tariff
preferences affecting coffee and has endorsed
efforts made by Latin American producers to
provide a time table for the removal of the
preferences afforded some producers by EEC
[European Economic Community] countries
and to bring about the reduction of internal
consumption taxes on coffee.

Processed Coffee

The United States holds that in tlie context
of the International Coffee Agreement, which
aims at the stability of the world coffee economy,
there should be equitable and non-discrimina-
tory conditions of access to all kinds of coffee
covered by the Agreement by all elements of
the trade. Wlien actions are taken by producer
countries which give special price advantages
to their processed coffee exports, competing
processors in consumer countries cannot meet
this kind of competition since they are subject.

338

DEPARTMENT OF STATE BULLETIN

to the constraints of the Agreement. And the in-
terests of coffee growers in other countries are
also adversely affected. Therefore, the United
States considei-s that so long as the Agreement
exists, it should not be used to give unfair ad-
vantage to export of coffee in processed form as
compared to green coffee.

This problem has arisen over soluble coffee
imports and thus far has primarily affected the
U.S. trade. However, other consuming countries
have become concerned that this sort of unfair
competitive activity could affect established
channels of trade in their countries for soluble as
well as for other forms of processed coffee.

IV. Future Prospects

The International Coffee Council is to meet
again m January 1968 in London in an effort
to resolve these issues and to complete the ne-
gotiations for an extended Agreement. The
Agreement has been of great benefit to produc-
uig countries. It has stabilized coffee prices and
increased their export earnings. Thus it has
helped to provide the developing producer mem-
bers with income that is indispensable for their
economic development and political stability.
The United States is hopeful that in the cur-
rent negotiations solutions to the remaining
problems can be found that will permit it to
support an extended International Coffee
Agreement.

Congressional Documents
Relating to Foreign Policy

90th Congress, 1st Session

Survey of the Alliance for Progress. Studies prepared
at tlae request of the Subcommittee on American Re-
publics Affairs of the Senate Foreign Relations Com-
mittee [Committee prints] :
The Political Aspects. Prepared by the staff of the

committee. September 18, 1967. 24 pp.
Inflation in Latin America. Prepared by Raymond
F. Mikesell, professor of economics, University of
Oregon. September 25, 1967. 46 pp.
The Latin American Military. Prepared by Edwin
Lieuwen, professor of history. University of New
Mexico. October 9, 1967. 36 pp.
Foreign Trade Policies. Prepared by the Legislative
Reference Service, Library of Congress. October
30, 1967. 28 pp.
Problems of Agriculture. Prepared by William C.
Thiesenhusen, assistant professor of agricultural
economic-s, and Marion R. Brown, assistant profes-
sor of agricultural Journalism, University of Wis-
consin. December 22, 1967. 28 pp.

TREATY INFORMATION

Current Actions

MULTILATERAL

Cultural Relations

Convention providing for creation of the Inter-Ameri-
can Indian Institute. Done at Mexico City November
1, 1940. Entered into force December 13, 1941. TS 978.
Ratification deposited: Chile, January 3, 1968.

Customs

Customs convention on containers, with annexes and
protocol of signature. Done at Geneva May 18, 1956.
Entered into force August 4, 1959.'
Extension: by Australia to territories of Papua, Nor-
folk Island, Christmas Island, Cocos (Keeling) Is-
lands, and Trust Territory of New Guinea, Janu-
ary 3, 1968.

Load Lines

International convention on load lines, 1966. Done at
London April 5, 1966. Enters into force JiUy 21, 1968.
TIAS 6331.

Accessions deposited: Maldive Islands, January 29,
1968; Morocco, January 19, 1968.

Postal Matters

Convention, final protocol, and regulations of execution
of the Postal Union of the Americas and Spain, and
rules and regulations of the International Office of
the Postal Union of the Americas and Spain and the
transfer office. Signed at Mexico City July 16, 1966.
Entered into force March 1, 1967. TIAS 6354.
Ratification deposited: Canada, January 5, 1968.

Parcel post agreement, final protocol, and regulations
of execution of the Postal Union of the Americas and
Spain. Signed at Mexico City July 16, 1366. Entered
into force March 1, 1967. TIAS 6356.
Ratification deposited: Canada, January 5, 1968.

Safety at Sea

International convention for the safety of life at sea,
1960. Done at London June 17, 1960. Entered into
force May 26, 1965. TIAS 5780.

Acceptance deposited: Maldive Islands, January 29,
1968.

Sea

Convention for the International Council for the Ex-
ploration of the Sea. Done at Copenhagen September
12, 19&1.

Ratification deposited: Italy, December 28, 1967.
Enters into force: July 22, 1968.'

Sugar

Protocol for the further prolongation of the Interna-
tional Sugar Agreement of 1958 (TIAS 4389). Done
at London November 14, 1966. Open for signature at

' Not in force for the United States.

M.\RCH 4, 19 68

339

London November 14 to December 30, 1966, inclusive.
Entered into force January 1, 1967 ; for the United
States December 21, 1907. TIAS 6447.
Ratifications deposited: Poland, December 14, 1967;
Portugal, December 12, 1967.

Telecommunications

International telecommunication convention, with
annexes. Done at Moutreus November 12, 1965. En-
tered into force January 1, 1967; as to the United
States May 29, 1967. TIAS 6267.
Accession deposited: Viet-Nam, January 15, 1968.

Trade

Protocol for the accession of Ireland to the General
Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967. Entered into force December 22, 1967.
Acceptances: European Economic Community, Jan-
uary 17, 1968 ; France, January 15, 1968.

Protocol for the accession of Argentina to the General
Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967. Entered into force October 11, 1967.
Acceptances: European Economic Community, Jan-
uary 17, 1968 ; France, January 15, 1968.

Protocol for the accession of Poland to the General
Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967. Entered into force October 18, 1967.
Acceptances: European Economic Community, Jan-
uary 17, 1968 ; France, January 15, 1968.

Protocol amending the General Agreement on Tariffs
and Trade to introduce a part IV on trade and
development. Done at Geneva February 8, 1965.
Entered into force June 27, 1966. TIAS 6139.
Ratification deposited: Federal Republic of Germany,
January 18, 1968.

War

Geneva convention relative to treatment of prisoners

of war ;
Geneva convention for amelioration of condition of

wounded and sick in armed forces in the field ;
Geneva convention for amelioration of condition of
wounded, sick and shipwi'ecked members of armed
forces at sea ;
Geneva convention relative to protection of civilian
persons in time of war.

Dated at Geneva August 12, 1949. Entered into force
October 21, 1950 ; for the United States February
2, 1956. TIAS 3364, 3362, 3363, and 3365,
respectively.
Adherence deposited: Malawi, January 5, 1968.

Wheat

1967 protocol for the further extension of the Inter-
national Wheat Agreement, 1962 (TIAS 5115). Open
for signature at Washington May 15 through June
1, 1967, inclusive. Entered into force July 16, 1967.
TIAS 631.5.
Ratification deposited: Costa Rica, February 13, 1968.

BILATERAL

Tanzania

Agreement providing for the furnishing of economic,
technical, and related assistance. Effected by ex-
change of notes at Dar es Salaam February 8, 1968.
Entered into force February 8, 1968.

PUBLICATIONS

Recent Releases

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perintendent of Documents, must accompany orders.

Background Notes. Short, factual summaries which
describe the people, history, government, economy, and
foreign relations of each country. Each contains a map,
a list of principal government officials and U.S. diplo-
matic and consular officers, and, in some cases, a se-
lected bibliography. Those listed below are available at
5 cents each.

Pub. No.

Bahamas 8329

Bhutan 8334

British Honduras 8332

Canada 7769

Chad 7669

Cuba 8347

Dahomey 8308

French Guiana 8321

Gambia 7841

Guadeloupe 8319

India 7847

Israel 7752

Luxembourg 7856

Malawi 7790

Mali 8056

Martinique 8320

Mongolia 8318

Morocco 7954

Nicaragua 7772

Panama 7903

Qatar 7906

Sierra Leone 8069

Somali Republic 7881

Spanish Sahara 7905

Sudan 8022

Switzerland 8132

Togo 8325

Trinidad 8306

Trucial Sheikdoms 7901

Tunisia 8142

Uganda 7958

Western Samoa 8345

Trade in Cotton Textiles. Agreement with Portugal,
amending the agreement of March 23, 1967. Exchange
of notes — Signed at Lisbon September 29, 1967. Entered
into force September 29, 1967. TIAS 6349. 7 pp. 10<f.

Investment Guaranties. Agreement with Swaziland —
Signed at Mbabane September 29, 1967. Entered into
force September 29, 1967. TIAS 6350. 3 pp. 5^.

Agricultural Commodities. Agreement with Viet-Nam,
supplementing the agreement of March 13, 1967 —
Signed at Saigon September 21, 1967. Entered into
force September 21, 1967. TIAS 6351. 3 pp. 5^.

340

DEPARTMENT OP STATE BULLETIN

INDEX March i, 1968 Vol. LVHI, No. IWH

Agriculture. International Grains Arrangement
Transmitted to the Senate (Johnson) . . . 329

Aviation. U.S. and Czechoslovakia Conclude Civil

Aviation Talks 321

Congress

Congressional Documents Relating to Foreign
Policy 339

International Grains Arrangement Transmitted
to the Senate (Johnson) 329

Third Annual Report on the International Cofifee
Agreement Transmitted to Congress (John-
son, text of report) 330

To Build the Peace — The Foreign Aid Program
for Fiscal 1969 (text of President's message) . 322

Cjrprus. The United Nations and United States
Foreign Policy (Goldberg) 306

Czechoslovakia. U.S. and Czechoslovakia Con-
clude Civil Aviation Talks 321

Disarmament. U.S. To Sign Protocol to Treaty
of Tlatelolco (Johnson) 313

Economic Affairs

President Meets With Mr. Rey of the European

Communities (joint statement) 319

President Meets With U.S. Section of U.S.-
Mexico Border Commis.sion 309

Third Annual Report on the International Coffee
Agreement Transmitted to Congress (Johnson,
test of report) 330

Europe. President Meets With Mr. Rey of the
Euroi)ean Communities (joint statement) . . 319

Foreign Aid. To Build the Peace — The Foreign
Aid Program for Fiscal 1969 (text of Presi-
dent's message) 322

Jordan. U.S. To Resume Sliipments of Arms to
Jordan 305

Korea

Our Concern for Peace in East Asia (Rusk) . 301
The United Nations and United States Foreign
Policy (Goldberg) 306

Latin America

Our Latin American Policy in the Decade of
Urgency (Linowitz) 310

U.S. To Sign Protocol to Treaty of Tlatelolco

(Johnson) 313

Mexico. President Meets With U.S. Section of
U.S.-Mexico Border Commission 309

Near East. The United Nations and United

States Foreign Policy (Goldberg) .... 306

Presidential Documents

British Prime Minister Harold Wilson Visits the

United States 314

International Grains Arrangement Transmitted

to the Senate 329

President Meets With Mr. Key of the European

Communities 319

Rynkyuan People To Elec-t Chief Executive

Directly 319

Third Annual Report on the International Coffee

Agreement Transmitted to Congress .... 330
To Build the Peace — The Foreign Aid Program

for Fiscal 1969 322

U.S. To Sign Protocol to Treaty of Tlatelolco . 313

Publications. Recent Releases 340

Ryukyu Islands. Ryukyuan People To Elect
Chief Executive Directly (Johnson, text of
Executive order) 319

Trade. 2d United Nations Conference on Trade
and Development (U.S. delegation) .... 320

Treaty Information

Current Actions 339

International Grains Arrangement Transmitted

to the Senate (Johnson) 329

U.S. and Czechoslovakia Conclude Civil Aviation

Talks 321

U.S. To Sign Protocol to Treaty of Tlatelolco

(Johnson) 313

United Kingdom. British Prime Minister Harold
Wilson Visits the United States (Johnson,
WUson) 314

United Nations

2d United Nations Conference on Trade and De-
velopment (U.S. delegation) 320

The United Nations and United States Foreign
Policy (Goldberg) 306

Viet-Nam

British Prime Minister Harold Wilson Visits the
United States (Johnson, Wilson) 314

Our Concern for Peace in East Asia (Ituslc) . 301

Secretary Rusk Reports on Hanoi's Rejections
of U.S. Peace Proposals 305

The United Nations and United States Foreign
Policy (Goldberg) 306

Name Index

Goldberg, Arthur J 306

Johnson, President .... 313, 314, 319, 322, 329, 330

Linowitz, Sol M 310

Rey, Jean 319

Rusk, Secretary 301,305

Wilson, Harold 314

Check List of Department of State
Press Releases: February 12-18

Press releases may be obtained from the Office
of NevFS, Department of State, Washington, D.C.
20520.

Releases i.ssued prior to February 12 whicli
appear in thi.s issue of the Bulletin are Nos. 21
of Januar.v 29, 28 of February 9, and 29 of Feb-
ruary 10.

No. Date

Subject

t30 2/12 Milton S. Eisenhower to be U.S.
Representative to 5th meeting of
Inter-American Cultural Council.

31 2/14 Linowitz : National Press Club,

Washington, D.C.

32 2/14 Rusk : report on Viet-Nam peace ne-

gotiations.

t33 2/15 U.S. and Mexico agree on fishery zone
boundaries.

t34 2/16 Oliver : "On Understanding Ourselves
in the Home Hemisphere."

t35 2/10 U.S.-Japancse discussions on soft-
wood log trade.

IHeld for a later issue of the Bui,letin.

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THE

DEPARTMENT

OF

STATE

BULLETIN

PRESIDENT JOHNSON'S NEWS CONFERENCE OF FEBRUARY 16 {Excerpts) 341

SECRETARY RUSK INTERVIEWED BY COLLEGE EDITORS

Transcript of Interview 3^6

'ROM AID TO COOPERATION: DEVELOPMENT STRATEGY FOR THE NEXT DECADE

Statement by Under Secretary Rostow at UNOTAD-II 359

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1498
March 11, 1968

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Note: Contents of this publication are not
copyrighted and items contained herein may be
reprinted. Citation of the DEPARTMENT OF
STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed in
the Readers' Guide to Periodical Literature.

The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
vjith information on developments in
the field of foreign relations and on
the work of the Department of State
and the Foreign Service.
The BULLETIN includes selected
press releases on foreign policy , issued
by the White House and the Depart-
ment, and statements and addresses
made by the President and by the
Secretary of State and other officers
of the Department, as well as special
articles on various phases of interna-
tional affairs and the functions of the
Department. Information is included
concerning treaties and international
agreements to which the United
States is or may become a party
and treaties of general international
interest.

Publications of tlie Department,
United Nations documents, and leg-
islative material in the field of inter-
national relations are listed currently .

President Johnson's News Conference of February 16

Following are excerpts from the official
transcript of a news conference held hy Presi-
dent Johnson in the Fish Room at the White
House on February 16.

Q. Mr. President, sir, there have been some
rumors in the last couple of days from various
Members of Congress that General Westmore-
land [Gen. William C. Westmoreland, Com-
mander, U.S. Military Assistance Commuiul,
Viet-Najnl might be transferred. Can you com-
ment on that?

The President: I think that has been thor-
oughly covered. I should think you could ob-
serve from the sources that they are not either
my confidants or General Westmoreland's.

But there is a campaign on to get over the
world that we have doubts in General West-
moreland. That campaign I do not believ-e is
going to succeed. It is not going to succeed with
me. I have no doubts about his ability, about
his dedication. If I had to select a man to lead
me into battle in Viet-Nam, I would want Gen-
eral Westmoreland.

Does that make it clear to anybody and every-
body, including all the foreign press that may
want to pick it up?

You see, what irritates me is that I see these
things about a week or two ahead of time. They
originate, go around the world, and then tliey
get real hot here. There are reasons for doing
these things. One of the reasons is to destroy
people's confidence in the leadersliip.

> • • ■ •

Q. Mr. President, could you address yourself,
please, sir, to the gossip and rumors about nu-
clear weapons in Viet-Nam?

The President: I think the Press Secretary
covered that very well.^
The President must make the decision to de-

ploy nuclear weapons. It is one of the most
awesome and grave decisions any President
could be called upon to make.

It is reasonably apparent and known to all
that it is very much against the national inter-
est to carry on discussions about deployment of
nuclear weapons; so much so that the act itself
tries to guard against that.

I have been in the executive branch of the
Government for 7 years. I think I have been
aware of tlie recommendations made by the
Joint Chiefs of Staff, by the Secretary of State
and the Secretary of Defense during that period.

So far as I am aware, they have at no time
ever considered or made a recommendation in
any respect to the employment of nuclear weap-
ons. They are on our planes on training missions
from time to time.

We do have problems. There are plans with
our allies concerning wliat they do.

There is always a person available to me who
has full information in comiection with their
deployment, as you newspapermen know. I
think if any serious consideration were ever
given, and God forbid there ever will be, I do
not think you would get it by some anonymous
caller to some committee of the Congress. I think
most of you know that, or ought to know that.

No recommendation has been made to me.
Beyond that, I think we ought to put an end to
that discussion.

Q. Mr. President, do you see any nevi. hopeful
prospects for negotiating with Hanoi?

The President: We look for them every day.

I would like to be able to say "Yes." In the
last few days, preparatory to closing out the
statement that Secretary Rusk issued yesterday
I believe — or the day before ^ — we reviewed
Hanoi's actions in response to more than 20-odd
proposals made by well-intentioned and inter-
ested people.

We reviewed the many overtures that we had

' In a White House news briefing on Feb. 9.

' Bulletin of Mar. 4, 1SKJ8, p. 305.

ilARCH 11, 1968

341

made, including the most recent one, where we
thought we went as far as honorable men could
go — the San Antonio proposal.^

As near as I am able to detect, Hanoi has not
changed its course of conduct since the very
first response it made.

Sometimes they will change "will" to
"would,"' or "shall" to "should," or something of
that kind. But the answer is all the same.

"Wliile we were prepared to go into a Tet
truce, they were moving thousands of men
from the North into the South for the subse-
quent attacks on that sacred holiday. I think
that ought to be an answer that any elementary
school boy or girl could understand.

If you want to go to the negotiating table, if
you want to talk instead of fight, you do not
move in thousands of people with hundreds of
trucks through the night to try to catch people — -
innocent civilians — by surprise in the city, an-
ticipating a general uprising.

"VVe are familiar with all the approaches that
have been made to them, and we have encour-
aged them all the time. But when it is all said
and done, I do not want to leave the American
people under any illusions, and I do not want
to deceive them.

I do not think Hanoi is any more ready to
negotiate today than it was a year ago, 2 years
ago, or 3 years ago. I do not think it has been
at any time during any of that period.

Q. Could I ask yoti whether your review in-
cluded anything you may have had lately from
the Secretary-General of the United Nations, or
does that await your visit with him next week?

The President: The answer is yes; that does
include such reports as we may have on conver-
sations that have taken place in other capitals.

We have responded on occasions to other re-
quests the Secretary-General has made of us.
We applaud his efforts to try to bring about a
just negotiation and to get all sides to the peace
table.

Ambassador Goldberg [Arthur J. Goldberg,
U.S. Representative to the United Nations] had
a long meeting with the Secretary-General and
got a full report on his recent trip, just as I got a
full report on [British] Prime Minister
Wilson's recent trip.

I have received a good many reports from

' For an address by President Johnson at San An-
tonio, Tex., on Sept. 29, 1967, see ihid., Oct. 23, 1967,
p. 519.

folks who have visited other capitals. We are
always glad to hear those reports, although we
are saddened, sometimes, that they don't bring
us the hope we would like to have.

Ambassador Goldberg told me that the Sec-
retary-General would like to see me. He had
been to the Soviet capital and met with the
leaders there. He had been to the British capital
and met with the leaders there. He has been to
India. He has been to the French capital and
met with the leaders there.

I told the Secretai-y-General that, of course,
as long as I was in this place, I would always
be glad to meet with him any time that he de-
sired to. He suggested next Friday. I told Mr.
Goldberg that I didn't know what plans you
might have for Friday, but George [Presiden-
tial Press Secretary George Christian] tells me
you always get a little restless, jittery, tired,
worn, and snappish on Fridays. Washington's
Birthday is Thursday. INIaybe if we wanted to
get the maximum out of this, we ought to be
here where you could be with us on Wednesday.
So we moved it up to Wednesday.

On Wednesday I expect to see the Secretary-
General and thank him very much for another
try, to hear his views and to give him mme.

Q. Will this be lunch or dinner that he is
coming for?

The President: That will be 11 o'clock.

Q. Mr. President, you mentioned a tuorldtnide
movement or scheme to undermine confidence
in the American military leadership.

The President: No, I do not think I said a
worldwide scheme. I said we first heard reports
in our intelligence reports that come to me every
morning. At that time, the strategy was to dis-
credit General Westmoreland's leadei-ship. He
had suffered great losses out there.

That was before it was determined that they
dicbi't hold any of the cities they had attacked.
But that followed with comments in other cap-
itals, as it frequently does; namely, that there
was great division in Washington and that it
was very probable that because of this great
disaster General Westmoreland had suffered,
he would have to be recalled.

I want to emphasize that I do not want to
leave the impression with any soldier in that
command, with any parent of any man out there,
that there is any justification whatever for all

342

DEPARTMENT OF STATE BULLETIN'

A

this rumor, gossip, talk, about, General West-
moreland's competence or about his standing
with this President.

Q. Mr. President, how do you assess United
States relations xoith South Korea in the wake
of Mr. Vance's visit?

The Preside^it: I think Mr. Vance's visit was
a fruitful one. I think he had a very cordial and
understanding discussion.*

South Korea feels very distressed about the
attempt that was made to assassinate their
President and all the members of his family, as
we certainly do.

We feel very deeply our problem connected
with the Pueblo.

AVe have an understanding, a treaty, with
them.

JNfr. Vance had spent a good deal of time on
matters of this kind in the 7 years he has been
here.

He had lengthy talks with the Defense Min-
ister, the Prime Minister, and the President. He
made that report to the Cabinet committee yes-
terday. We thought it was a very good report,
and his mission was a very helpful one.

Q. Mr. President, are you giving any thought
to increasing the level of our forces in
Viet-Nam?

The President: Yes, we give thought to that
every day. We never know what forces will be
required there. We have, tentatively, a goal. We
would like to reach that goal as soon as we can.
In light of the circimistances that existed when
we set that goal, we hoped to reach it some time
this j'ear.

In light of the developments and the sub-
sequent substantial increases in the enem}' force,
General Westmoreland asked that he receive
approximately half of the remaining numbers
under that goal during February or early
March.

Did you mean enemy forces or our forces?

Q. Our forces.

The President: I said "in light of substantial
increa-ses in the enemy force." You luiderstood
that, didn't you?

Q. Yes.

The President: So General Westmoreland
told us that. We carefully reviewed his request

' See p. 344.

in light of the information that had come in.
We made certain adjustments and arrange-
ments to comply with his request forthwith.
That will be done.

When we reach our goal, we will be constant-
ly reviewing the matter many times every day,
at many levels. We will do whatever we think
needs to be done to insure that our men have
adequate forces to carry out their mission.

Q. Mr. President, in light of your earlier com-
ments on negotiations icith North Viet-Nam,
could you discuss with xis the basis for Prime
Minister Wilson's statement to the House of
Commons that there was only a narrov! margin
between the U.S. and Hanoi -positions?

The President: I have given you my views.
I assiune you have means of getting any details
of the Prime Minister's fi'om him.

My views are very clear. I don't know any-
thing I can add to them.

If I have confused you somewhat, I will be
glad to help clear it up.

I have told you that I have never felt that
they have changed their position, modified it, or
moderated it.

The press: Thank you, Mr. President.

U.N. Secretary-General U Thant
Meets With President Johnson

White House Statement, February ^1

White House press release dated February 21

The President and the Secretary-General of
the I'nited Nations, U Thant, had a friendly
exchange of views on a number of matters, in-
cluding Viet-Nam. The Secretary-General con-
veyed to the President his impressions regard-
ing the prospects of peace in Viet-Nam in light
of his recent discussions in various capitals of
the world. The President reaffirmed our con-
tinuing desire to achieve a peaceful settlement
and the continued validity of the San Antonio
fonnula.^

Secretary Rusk, Ambassador Goldberg [Ar-

' For an address by Trcsident .Johnson made at San
Antonio, Tex., on Sept. 20, 1967, see Bulletin of
Oct. 23, 1967, p. 519.

MARCH 11, 1968

343

thur J. Goldberg, U.S. Representative to the
United Nations], and several senior Depart-
ment officials will have a working limch with
the Secretary-General and Under Secretary-
General [Ralph] Bunche to continue discus-
sions, including a niunber of issues presently
before the United Nations.

Mr. Vance Completes Special Mission
to Korea for President Johnson

The White House announced on February 9
that President Johnson was sending Cyrus R.
Vance, fanner Deputy Secretary of Defense, to
Seoul, Korea, as his personal representative for
talks with President Chung Bee Park and other
high officials of the Republic of Korea Govern-
ment. Mr. Vance left for Seoul that evening,
accompanied by officials of the Departments of
State and Defense. Following is the text of a
Koreanr-JJ.S. joint communique issued at Seoul
on February 15 upon conclusion of the talks, to-
gether with the transcript of a news briefing
held by Mr. Vance at the White House on
February 15 after lie had repainted to President
Johnson and members of the Cabinet on his
mission.

KOREAN-U.S. JOINT COMMUNIQUE^

President Park received Mr. Cyrus R. Vance,
Special Envoy of the President of the United
States of America, on February 12 and Febru-
ary 15, 1968. Mr. Vance conveyed to President
Park the very warm greetings of President
Johnson. The cordial and sincere conversations
between President Park and Mr. Vance were
carried on with the participation of the Prime
Minister, the Minister of Foreign Affairs, the
Minister of National Defense, and other high
officials of the government. The American Am-
bassador William J. Porter and General C. H.
Bonesteel, Commander-in-Chief of the United
Nations Command, also participated. Mr. Vance
had a series of talks with the Prime Minister,
the Minister of Foreign Affairs, the Minister of
National Defense, the IMinister of Public Infor-
mation, and other high officials of the Korean
government.

* Issued at Seoul, Korea, on Feb. 15.

President Park and Mr. Vance fully ex-
changed views concerning the grave situation
that has arisen as a result of the increasingly
aggressive and violent actions of the North
Korean Communists over the past foui-t-een
months in violation of the Armistice Agreement,
and most recently the attack directed at the offi-
cial residence of the President and the illegal
seizure of the USS Pueblo in international wa-
ters. They agreed that these actions must be
condemned by all civilized peoples. They also
agreed that these aggressive actions seriously
jeopardize the security of this area and, if per-
sisted in, can lead to renewed hostilities in
Korea. Wliile reaffirming the sincere desire of
their countries for a peaceful solution to these
problems in accordance vdth the principles of
the United Nations Charter, they agreed that, if
such aggression continued, the two countries
would promptly determine what action should
be taken under the Mutual Defense Treaty be-
tween the Republic of Korea and the United
States. They reaffirmed the commitment of the
two countries to undertake immediate consulta-
tions whenever the security of the Republic of
Korea is threatened. They noted the extraordi-
nai-y measures which have been and are being
taken to strengthen the Korean and American
Forces in tliis area so as to leave them in a state
of readmess to deal with any contingency Avhich
might arise.

The two governments agreed that annual
meetings would be held at the ministerial level
of the Ministry of National Defense of the Re-
public of Korea and the Department of Defense
of the United States to discuss and consult on
defense and security matters of mutual interest
and common concern.

President Park expressed his appreciation to
President Jolinson for his quick action in rec-
ommending to the United States Congi-ess an
additional 100,000,000 dollars of United States
military assistance to the Republic of Korea.*
President Park and Mr. Vance recognized the
need for continuing modernization of the armed
forces of the Republic of Korea. They also dis-
cussed the subject of supplying small anns to the
Korean veterans forces in order to strengthen
further the defense capabilities of the Republic
of Korea. They agreed that a meeting of Re-
public of Korea and United States military ex-

" For text of President Johnsou's message to Congress
on the foreign aid program for fiscal 1969, see Buuj:tin
of Mar. 4, 1968, p. 322.

344

DEPAETMENT OF STATE BTTLLEnN

J

perts should be held in the near future to discuss
the specific items to be included within the
amount mentioned above and military assistance
matters in general.

NEWS BRIEFING BY MR. VANCE

White House press release dated February 15

Mr. Vance: I arrived back shortly after 5
o'clock. I came immediately to the "WTiite House,
where I met with the President, the Secretary
of State, and others. I briefed them fully on my
discussions with President Park, the Prime
Minister, and other Cabinet ministers and other
high officials over the last several days in Seoul.

After my briefing we went around the table,
and a nimiber of people asked questions in
amplification of my briefing.

I might say that I found my discussions with
President Park, the Prime Minister, and the
other Cabmet officials in Korea to have been
good and very useful. They were carried out at
all times in a cordial and friendly atmosphere,
and I returned with renewed confidence of the
solidarity of our alliance and with a heightened
perception of the friendship of the Korean peo-
ples for the peoples of the United States.

Q. Were there any agreements, sir, that vere
reached out there tliat could not he sfohen
about?

A. No. There are not agreements outside of
the communique. Everything in the way of an
agreement is reflected in the communique.

Q. What is the depth of feeling you found
there over the demands for some so-called
instant retaliation?

A. There are different views among different
individuals with respect to that suggestion.

Q. Will you see the President again
tomorrow?

A. I believe not. I hope to be going back to
resiune my practice of law tomorrow.

Q. Were you involved at all in the Pueblo
conferences?

A. I informed myself with respect to that.
I had nothing to do with the meetmgs at
Panmimjom.

Q. Are there any plans for the South Korean
President to come to Washington in the near
future?

A. That was not discussed at all between
President Park and me.

Q. Do you feel there is a meeting of the
miTids now between the United States and the
South Korean leadership?

A. I felt that the exchange was very useful
and that there is a good understanding between
us with respect to their views and they of ours.

Q. Did you form any conclusions as to what
North Korea may he up to?

A. I don't want to prognosticate about what
the future may hold.

Q. When is the Defense Secretaries'' meeting
going to be held?

A. That hasn't been decided yet.

Q. Will we continue the meetings at Panmun-
jom without the participation of South Korea?

A. I think that ought to come from the State
Department.

Q. Can you say any more about the differ-
ences regarding tlie "instant retaliation"?

A. No, other than to say that there are some
people who hold that view in South Korea and
I was informed of those views.

Q. Do they still hold those views, sir?

A. I am sure some people still hold those
views.

Q. In the Government?

A. That is all I care to say on that.

Q. Could you say anything about operational
control?

A. The issue was not raised with me.

The press: Thank you, sir.

MARCH 11, 1968

345

Secretary Rusk Interviewed by College Editors

Following w the transcript of an interview
ivith Secretary Rusk on February 2 ly members
of the U.S. Student Press Association. Inter-
mewing the Secretary were Walter Grant, edi-
tor. Collegiate Press Service, Washington,
B.C.; Dennis Wilen, University of Pennsyl-
vania; Dan Okrent, University of Michigan;
and Gordon Yale, University of Colorado.

Press release 26 dated February 6

Q. Mr. Secretary, do you believe there^s a
m.llita/y solution to the Viet-Nam problem, and
if so, lohat are the contingencies?

A. Well, I think that the first militcary objec-
tive is to prevent the other side from scoring
a military- solution. They are trying to impose
by militaiy action their own particular solution
to the problems of South Viet-Nam, so that to
control that thinist is a militaiy task. That
doesn't mean that the problem of Viet-Nam is
only a military problem. There are many things
in the political, economic, social fields that have
to be done in tenns of nation-building if the
country is to recover from 25 years of war and
to live "the Irind of life tliat the people would like
to live. There is a military factor, but it is not
the only thing.

Q. Well, what I meant to say vHWi: In my
mind there are two solutions to the war, one is
military and the other is perhaps a diplomatio
solution. Do yau believe that there is a military
solution?

A. Well, this depends upon whether those
reganents continue to march down the road. If
a North Vietnamese regiment is marching down
the road, somebody has to decide whether you
get out of its way or shoot at it. You can't avoid
that question, because here comes the regiment.
Now, there can be a political solution if the
other side is interested in a political solution, a
political solution that will meet the needs of the
people of South Viet-Nam. But we haven't seen
much evidence that North Viet-Nam is inter-

ested in a political solution of the sort, that the
other peoples of Southeast Asia are prepared to
accept.

Q. If it must depend on the military solution
in the long run, tuill this really be a solution?
What do you do from the point after the
country has been decimated?

A. I didn't say that it would depend upon a
military solution in the long run. I said that so
long as these regiments march down the road
from North Viet-Nam, somebody must decide to
shoot at them or get out of their way. Now,
when that process stops, then there can be all
sorts of solutions contemplated. But until that
process stops there is at least a military
problem : Here comes the regiment.

Q. Aren't there any contingency plans made
for what would happen if the war ended to-
mon-ow? What would we do to put Viet-Nam
bajch on its feet?

A. South Viet-Nam has practically every-
thing but peace. It has an intelligent popula-
tion, it has natural resources, it has climate, it
used to be an important exporter of rice to
other comitries in the Orient. It has an un-
usually high degree of education, looking at
the po]-)ulation as a whole, so it has a gi'eat
capacity for bouncing back. The war damage
itself is not to the basic infrastructure of the
country. Viet-Nam is not like Western Europe,
say, during and after World War II. Now, you
can fly for hours around Viet-Nam and see al-
most no war damage as such. It can bounce back
quickly when the fighting stops. ISIost of the
fighting has been out in the woods until re-
cently, when the Viet Cong brought the fighting
right into the population centers. No, we are
prepared to do a great deal, not only about Viet-
Nam but all of Southeast Asia. At Jolms Hop-
kins, President Johnson proposed that we put
a billion dollars into the economic and social
development program for all of Southeast Asia,
including North Viet-Nam if North Viet-Nam

346

DEPAKTMENT OF STAl-E BULLETIN

would make peace and join the rest of tliem in
that ellort.'

Q. You just said that you could f,y all over
South Viet-Nam and hardly see any war dam-
age; and President Johnson said yesterday that
— and Vm sure Vm going to paraphrase him
incorrectly — he said that it doesn't seem like an
opportune time to stop the homhing of North.
Yiet-Nam, because they donH seem sincere in
wanting negotiations, especially with North
Yiefnamese troop concentrations moving
south.^ This ivoiild seem to indicate, perhaps,
that mayhe all the bombing of North Yiet-Nam
ha'! absolutely no e/ffect in halting infiltration.
Wouldn't this tend to indicate that some other
sort of method must be used?

A. Well, when I was in imiform I was an in-
fantryman ; and I'm well aware of the fact that
airpower alone cannot stop a foot soldier from
moving on the ground, but it can stop trucks
and it can stop large quantities of supplies and
it can stop barges and it can stop ships along
tlie coast. I think that the fact that all infiltra-
tion cimnot be stopped by bombing doesn't mean
that the bombing has not imposed very heavy
burdens on North Viet-Nam. As a matter of
fact, that is i)robably the reason why North
Viet-Nam is now concentrating on the bombing.
They are talking about nothing else. As a
matter of fact, they are imwilling to talk about
anything else until the bombing stops. "We're
trying to find out what they would talk about
if the bombing stopped, and we haven't had

] very good answers.

i No; we'll stop the bombing. First, let me say
that we will negotiate today without any con-
ditions, right today, before sundown. They have
raised a major condition : that we stop the
bombing. We've said to them : "All right, we'll
stop the bombing if it will lead promptly to pro-
ductive discussions and if we can assume that
you will not take advantage of this cessation of
bombing while the talks go forward." Now,
that's a perfectly reasonable and fair proposi-
tion. If they would talk business in those terms,
maybe we could get to the conference table. But
we can't just stoji the bombing while they go

' For ail address b.v President Johnson made at
Baltimore. Md., on Apr. 7, 196.5, see Bulletin of
Apr. 26. 1965. p. 606.

" For remarks made by President Johnson at a Medal
of Honor ceremony at the White House on Feb. 1, see
i6i(f., Feb. 19, 1968, p. 226.

ahead with these massive offensives of theirs
across the DMZ [demilitarized zone] and
through Laos.

Q. Am I correct in assuming that the contact
that yoti've had with the North Vietnamese lias
been through intermediaries?

A. Well, we have contacts of various sorts
from time to time, and on occasion they have
been direct and on occasion there have been
intermediaries. There is never a problem of hav-
ing contact. The problem is that with contact
we don't see the basis for peace opening up.

Q. What Jcind of direct contacts are these?

A. Well, it's not for me to go into the details
of it, because as soon as I tell you about it the
contact is dead.

Q. In other words, nothing — there lias been
nothing publicly formal that an emissary of our
Government and an emissary of theirs both
knowingly — ■

A. Oh, there have been contacts of that sort,
sure. There have been contacts of that sort. The
problem is not one of contacts. The problem is
what is said in the contacts.

Q. lias one of your contacts been with the Na-
tional Liberation Front?

A. Again, to the extent that contacts occur, I
can't reveal them, because they have a passion
for secrecy about those things. The contacts with
the Viet Cong have been very few indeed. The
South Vietnamese Government has indicated
that they are prepared to talk to individuals on
the other side from time to time. There has been
little or no response to that ; in fact, the response
has been unfolding here in the last few days
with major Viet Cong offensives against the
populated centers. But again there has never
been any problem of contact; the problem is
what is said in contact.

Q. Well, is the United States Government
treating the Viet Cong and North Viet-Nam as
two separate forces in this war and have they —

A. Well, we know that the Viet Cong, partic-
ularly on the military side, is directed by
Hanoi. We have no doubt in our minds what-
ever about that. General Giap [Gen. Vo Ngu-
yen Giap, North Vietnamese Minister of De-
fense] is reputed to be commanding the present
operation in the northern part of South Viet-
Nam or in Laos or in the southern part of North

MARCH 11, 1988

347

Viet-Nam. The key commanders in the South
are northerners ; the key instructions come from
Hanoi to the South. In the northern part of
South "Viet-Nam there is not even any pretense
that the Liberation Front has anything to do
with it. That's a part of the military district
which includes the southern part of North Viet-
Nam. That's all wholly North Vietnamese;
there is not even any pretense that the Libera-
tion Front has anything to do with it.

Postwar Role of Ex-Viet Cong

Q. Well, ths reason I asked the question is
that the Viet Cong are basically South Vietnam-
ese; and if this war is brought to a conclusion,
wJiat is their role going to he?

A. The principal leadership of the Viet Cong
are people who have come from the North. That
is, the southerners who went north 10 years ago,
many of them were trained and sent back
down — plus many northerners who provide
many cadres for the Viet Cong. No, when tlie
fighting is over, the Viet Cong can rejoin the
body politic. They can — I'm sure that ex- Viet
Cong — I know that ex- Viet Cong have been
elected to village and hamlet councils through-
out the country. President Thieu has offered
individuals in the Viet Cong a chance to be rein-
corporated into the life of the country in posi-
tions comparable to their training and experi-
ence. There would be no problem about amnesty
for the Viet Cong if they were prepared to live
peacefully in a democratic society — taking the
same chances everybody else takes in a demo-
cratic society.

Q. If the Viet Cong are led and trained in the
North, hmo do you explain the persistent reports
out of Saigon in the last few days tlmt many of
these so-called terrorists have been sheltered,
fed, and clothed by the Saigon population?

A. Well, I haven't seen many of these reports.
Undoubtedly when they filter in during the Tet
season, they get some protection from their fam-
ilies and they get other protection from people
who are afraid to pass on the information. On
the other hand, what has been extraordinai-y is
that so much information has come in from
local people. And you'll notice that when the
civilians have a chance to move, those that are
caught in the crossfire, they don't move to the
Viet Cong and say "Take us out in the woods";
they move to the Government side. When they
have a chance to make a choice, they choose to

come with the Government rather than the Viet
Cong. Now, that is the typical pattern there,
that is unfolding out there.

Q. Do the Viet Cong believe that they loill
have amnesty, that they will get a role in the
Government tohen this war is fought to a politi-
cal conclusion?

A. I don't know what they believe.

Q. It would seem to me that it would be hard
for them to believe this —

A. Well, that's veiy probable. That's their
problem. I don't know how you convince them.
They could try it.

Q. President Johnson —

A. I mean, 10,000 of them have been killed in
the last 3 days. I would think that trying an
amnesty would be better in the long run than
what they are getting now.

Q. President Johnson has said that if the war
came to a. political solution that American troops
would be leaving within 6 months. Could the
present South Vietnamese Government stand on
its own feet if America walked out?

A. At the Manila Summit Meeting^ all of
those who have troops in Viet-Nam, including
the South- Vietnamese Government, indicated
that if these forces from the North withdraw
and the violence subsides, then the Allied forces
will withdraw in a period of 6 montlis. We our-
selves have said to Hanoi that "If you will put
on the table a schedule of withdrawal of your
own troops, we'll put on the table a schedule of
withdrawal of our forces." * I have no doubt
that if the authentic southerners were left alone,
they would work these things out by themselves
with amnesty and reconciliation and arrange-
ments within the country that they ought to
live with — but not when the North Vietnamese
have regiments and armed cadre agents and
arms pouring in there to try to impose upon the
South a North Vietnamese solution.

Q. Yes; but assuming that the war ends with
a peaceful settlement, the Viet Cong are deft-
nUely going to be a political force, and naturally
they are going to be a threat to the present

' For background, see ibid., Nov. 14, 1966, p. 730.

' For an excerpt from an address by President John-
son made at Detroit, Mich., on Sept. 5, 1966, see ibid,
Sept. 26, 1966, p. 455.

348

DEPARTMENT OF STATE BULLETIN

)

Government, j)erhaps to the democratic proc-
esses. Is the present Government going to take
this kind of political opposition quietly, or are
they going to suppress it?

A. I don't think they ■will suppress peaceful
dissent. I think they will suppress violence and
violent resistance, as any government would, and
ours would.

Q. Well, there seemed to be soms suppression
during the last elections; several candidates
were not allowed to ritn.

A. Well, they liad 11 candidates for the
Presidency. Those candidates were selected by
the body which was elected for the purpose of
approving or disapproving the candidates. Now,
we only have two candidates in this country, two
principal candidates. They had a selection pro-
cedure by which they determined who would be
allowed to be candidates. They had 11, so that
they had a wider choice than we normally get
when we vote for a President.

Q. But here at least prohdbly anybody theo-
retically has a chance. There General [Duong
Van] Minh was prevented from entering the
country. General Minh was, from my xinder-
standing of the news reports, a very popular
individued. How can the election really he con-
sidered democratic under these circumstances?

A. I don't know why people pick up General
Minh as a kind of hero in this situation, because
when he was in charge out there he was widely
criticized here as being a military dictator.

Q. Well, /'m not trying to defend General
Minh on his merits hut on the merits of barring
anybody from the race —

A. That's right — well, the — I don't see — I
don't know of any political system in which just
anybody who wants to can run and become a
candidate when the actual voting occurs. That
doesn't happen in our country. There is a proc-
ess by which the machinery established under
law determines who will be the candidates.

Q. But the very fact of his exile — wouldn't
that be considered barring him from the orig-
inal process?

A. I suppose so, I suppose so.

Q. Mr. Secretary, the administration has
made 7nany comments about hoto the massive
antiwar demonstrations in this country have

maybe encouraged the North Vietnamese. I
wonder if you could comment on what type of
dissent should be put forth in this country and
wJmt type of dissent does hamper the efforts of
this Government.

A. Well, first let's talk about the character of
dissent. I have no problem about the peaceful
dissent, about the use of free speech, free as-
sembly, free press, to present any points of
view that anyone wants to present. I have very
strong views about dissent which tries to in-
terfere with other people's right of free speech.
I was a student in Germany when the storm
troopers were taking the platforms away from
the democratic forces in Gennany, and I per-
haps can be forgiven for having very strong
feelings that this must not happen again and
it must not happen in the United States. So that
form of dissent which tries to silence other peo-
ple is something to which I object very strongly
mdeed. Now, when you get to the — let's assume
now that we are talking about the kind of dis-
sent that is expected and is normal in a demo-
cratic society, protected by the first amendment
to the Constitution. Now, those who express dis-
sent must take the full responsibility for all
the consequences of it, just as those of us who
speak on the Government side must take the
consequences of speaking the Government's
point of view.

One of the problems is that Hanoi watches
this debate very closely, and they quote to their
own people and to the South Vietnamese and to
international opinion much that is said here.
There is no doubt that they are encouraged by
dissent in this country, no doubt about it. Now,
that doesn't mean tliat you forget the first
amenchnent and that you try to stop dissent;
but those who are expressing dissent ought to be
aware of that, and I would hope that these peo-
ple who dissent from what our Govei-nment is
doing would at least try to make it clear what
it is they want Hanoi to do to make peace. If
they will say "We want Washington to do the
following and we want Hanoi to do the follow-
ing," that might help.

Q. Vd Wee to —

A. But the thing that I find some trouble
with is a tendency to say nothing at all about
what Hanoi should do to make peace and con-
centrate on what the United States should do to
make peace.

MARCH 11, 1968

349

Q Your point is well taken, hut I would go
further and say: Why is there dissent to this
war^ Why wasn't there a similar dissent with
the Korean police action or to World War II,
World War I? Why is there such iv/despread
opposition?

A Well, I think there was substantial dis-
sent" during the Korean affair. Gallup polls in
February of 1951 indicated that more than 60
percent of the American people wanted to with-
draw from Korea. There was lots of dissent.
We don't have that now. They run maybe,
what, 12, 14, 15 percent in polls now indicate
that those who want to withdraw—

Q. Why are these 12 —

Q. Wasn't that only the extreme position?
Now, do half of the people want some sort of de-
escalation very quickly?

A. Oh, yes; so do I. We have been prepared
over and over again to try to deescalate this
fighting. We have tried to demilitarize the
DMZ; and there have been periods when we
have stopped bombing in a substantial area
around Hanoi, and we have said to the other
side: "Now, we would be impressed if you, too,
were to stop in a comparable area in South
Viet-Nam, somewhere around Saigon or around
the DMZ." We've tried to get the International
Control Commission to strengthen itself to in-
sure Cambodia's neutrality, to keep everybody
out of Cambodia; Hanoi says "No." We're pre-
pared to take any number of steps to try to de-
escalate, and we get no cooperation whatever
from Hanoi on it.

No Results From Bombing Pauses

Q. In 1965-66, I think, there was a 37 -day
homhing pause. There were no preconditions,
and what xoere your expectations at that time?

A. We thought that during that period it
might be possible to have a dialog with Hanoi
in which we could move the situation toward
a peaceful settlement. It had been hinted to us
by various people that if we stopped for a
period of 15 to 20 days such a dialog would
occur. We stopped for twice as long as was
suggested to us. On the 34th day of that pause,
while it was still going on, we had a most cate-
goric rejection by Ho Chi Minh of any discus-
sions of a peaceful settlement. So we waited 3
days.

We've stopped on several occasions. A year
ago when we saw Tet coming up we were in
touch with these people and we said: "Now
look, Tet's coming up, so let's do something
about it." But we got nothing out of it.

Q. Mr. Kosygin [Aleksei N. Kosygin, Chair-
man of the Council of Ministers of the Soviet
Union] was in London a year ago. I think tt
was a 7-day lomh pause, and at that time he
said: ''You stop the bombing and Pm sure that
peace talks ivould begin." Why wasn't the bomb-
ing stopped for a longer period of time than
it was?

A. If you put the Foreign Minister's [Ngu-
yen Duy Trinh, North Vietnamese Foreign
Minister] statement of this past December
alongside of the San Antonio fonnula,^ you'll
see what the questions are; they still are un-
answered. When? Some people say : "Well, talks
could occur several weeks after the bombing
stopped." Why several weeks? Why not within
2 days? Mr. Trinh said— they were talking
about relevant questions. AVliere are the relevant
questions? If North Viet-Nam only wants to
talk about what is happening in North Viet-
Nam, the bombing, and maybe an exchange of
prisoners, and refuses to talk about what is
happening to South Viet-Nam, namely, their
20 to 25 regiments that are present today in
South Viet-Nam, this is no way to peace. And
then what do we do about the militai-y action
which they are taking?

Are they going to do anything different? Are
they going to stop their infiltration ? Are they
going to stop sending artillery across the DMZ
against the marines at Con Thien? Are they
o-oing to slow down in any way the scale of the
war that they are fighting? We've got to have
some answers to some of those questions. We
don't have the answers to them.

Q. In 1965-66 you made— placed no precon-
ditions on the halt of the bombing, and there
were no public statements.

A. We've never said that we would— we did
in fact stop the bombing for certain periods,
but when you talk about permanent cessation
of the bombing, you've got to know what's going
to happen. No one in the world is able to tell
me what will happen if we stop the bombing—

» For an address by President Johnson made at San
Antonio, Tex., on Sept. 20, 1967, see lUd., Oct. 23, 1967,
p. 519.

350

DEPARTMENT OF STATE BULLETIN

no one. Hanoi is unwilling to, and therefore no
one else is in a position to. No human being can
tell me what will hai^pen if we stojj the bombing.

Q. How much wmild it hurt the military
effart if ice just decided, well, to fust stop the
homhing and find out?

A. For a short period?

Q. No, permanently.

A. Permanently?

Q. Yes.

A. — big difference — thousands of ti*ucks on
their way to the South have been destroyed.
"V^lien the forces in and north of the demili-
tarized zone opened up artillery on our marines
at Con Tliien, major airstrikes had to deal with
that situation; and that involved bombing in

I North Viet-Nam. The barges that move mate-
rials south on the waterwaj's are attacked by
air. The time required to move men and mate-
rials south is far longer than it used to be
because of the effect of the bombing. When we
loiow that in a good many of these bombings,
there are a lot of secondary explosions — those
secondary explosions are POL [petroleum-oil-

I lubricants], it's gasoline, it's ammimition, it's
things that otherwise would be used in the bat-
tle in the South. So although we can't stop
infiltration through the woods completely by
bombing, j-ou can make a major difference as
to the scale of the effort that they can throw

. against you and make it far moi'e costly to

\ them. That's quite apart from the five or six
hundred thousand people in North Viet-Nam
who are engaged in repairing roads and bridges
and things of that sort as a result of the
l)ombing.

If they weren't doing that, they could well
be mobilized to back the effort in the South.

Q- Even if the homhing is effective — and I
think many people have questions as to whether
or not it's effective — hut even if it is, wouldnH
it he u'orth the gamble to stop the homhing, at
least temporarily, to test Hanoi's sincerity —
especially in light of the —

A. WTien you say "stop it temporarily," that
doesn't bother us very much, except that we've
stopped it temporarily seven or eight times and
we got nothing out of it.

Q. But Hanoi has made a. new statement
since then, that if the homhing were stopped —

A. But they haven't answered any of these
other questions I talked about.

Q. But they still say —

A. When you say that we can take the gam-
ble— I've heard it said that the United States
is a powerful country, therefore it can take risks
for peace. Now, it depends on what that means.
If that means that because we're a big country
we can let more of our marines and our soldiers
get killed because we stopped the bombing
while the other side does nothing, then this is
not on — because each one of these soldiers and
marines is a precious human being like anybody
else; and we must not be asked to take addi-
tional casualties by stopping the bombing when
tJiey're unwilling to take any action whatever
in the military field. Why should we? It's
wholly irrational.

Q. Well, on the other Juind—

A. There's nothing fair or balanced about it.

Q. On the other hand, if we don^t stop the
homhing, we're taking a strong possibility that
the war may continue for several years —

A. No one has suggested that stopping the
bombing will end the war. No one is able to tell
us that stopping the bombing will end the war.
If that should happen, we're in business today.
So I would think that if North Viet-Nam could
sit there, safe and comfortable, without the in-
convenience of the bombing, free to send their
men into the South at whatever rate they want
to, without any damage to their own country,
they could do that for the next 50 years — why
would that be any incentive to North Viet-Nam
to make peace, under those circumstances?

Hanoi Raises Conditions

Q. You said that we just canH take them up
on this, if we stop the homhing right now, they
recently said . . . see what can happen, hecause
they havenH answered the other question. But
earlier in the same conversation you said that
we're willing to do it without any conditions
whatsoever.

A. We're willing to negotiate without any
conditions whatever. We'll sit down with them
at sundown today to talk about peace, without
anybody doing anything except sit down at the
table and talk. Now, they've rejected that.
Seventeen nonaligned nations 3 years ago called

MAKCH 11, 1968

351

upon both sides to negotiate without precondi-
tions.' "We said "Yes"— Hanoi said "No."

In March of last year, the Secretary-General
of the United Nations proposed a three-point
program: that there be a military standdown,
that there be preliminary discussions, that there
be a Geneva conference.' We said : "We will en-
ter immediately into talks to arrange the mili-
tary standdown, we will take part in the pre-
liminary discussions, and we will go to a Geneva
conference." Hanoi said "No."

Now, the point is that Hanoi has raised a
major condition for negotiations. They say there
will be no talks until we stop the bombing — they
usually say permanently and unconditionally.
That's a major condition. We didii't propose
any conditions, but they proposed one. So, we
have said, as a countercomment to their condi-
tion, we have said, "All right, if tliis will lead
promptly to productive discussions and if we
can assume that you will not take military ad-
vantage of our cessation of bombing while the
talks go on." I can't imagine a more reasonable
point of view.

Q. Even thovgh it is hosed on their condi-
tions, nevertheless a condition of ours — that you
won't take military advantage.

A. Well, this is a countercondition to their
condition. But we'll negotiate without any
conditions — today.

Q. As a corollary, would you he willing to
enter into negotiations immediately with the
fighting continuing as it is noto, perhaps as the
French did during the Algerian war, if they
continued infiltrating, we continue homhing—

A. Yes; we'll talk today on that basis.

Q. They''ve told you the conditions under
which they will talk, and evidently the counter-
condition is not acceptable to them. Is it going
to he pursued any farther? Is the United States
going to give anything more? Are we going to
offer an added impetus for talks? . . .

A. There have been some pertinent proposals
made on the widest variety of subjects, by our-
selves, other governments, groups of govern-
ments, leading personalities, to which we've said
"Yes," and Hanoi said "No." Now, if everybody
assumes that when Hanoi says "No," that's the
end of the matter, therefore the United States

" For background, see iUd., Apr. 26, 1965, p. 610.
' For background, see iUd., Apr. 17, 1967, p. 624.

must move again, that we must somehow take
some new position, the end of that trail is simply
that we abandon South Viet-Nam. We're not
going to do that.

Now, if they're going to fight a war, we will
be there to oppose them. The moment they don't
want to fight a war, we will make peace with
them. We're not going to be chivied out of this
situation by a nibbling process that in effect gets
us out of there and gives them what they want ;
namely, a South Viet-Nam taken over by force
from North Viet-Nam — that isn't going to hap-
pen. So the San Antonio formula is just about
as far as we can go. We've got to have some re-
sponse to that ; we haven't had a response to it.

Q. Getting hack to the question of domestic
dissent, in understanding your point that you
canH tolerate dissent lohen you''re prohihiting
someone else from their right to dissent — in
what way are Reverend [William Sloanm]
Coughlin and Doctor [Benjamin'] Spock pre-
venting other people from offering their
dissent?

A. I'm not claiming that they are preventing
other people from speaking ; their problem is a
different one. That's before the courts, and I
don't intend to comment on something that is
before the courts. But they're not — their prob-
lem is not that they've tried to, say, keep me
from speaking; they have a different question
in front of them.

Q. Could you define that question?

A. Well, that's before the courts; I'd rather
not go into it, actually.

North Korean Seizure of the Pueblo

Q. Switching, if we may, to a second, to
the Korean situation: Presidential Secretary
[George] Christian has stated that when the
Puehlo was hoarded it was, you know, past the
12-mile limit, in international waters. Where
was the Puehlo when it was challenged?

A. It was at the same location, because it was
first challenged at a time when the North
Korean ship reported that it was 18 miles at sea.
The Puehlo reported to us that it was 17 miles at
sea. So the North Korean vessel reported to its
authorities that it was further out in the inter-
national waters than ours was. Now, you can
make a — one skipper or the other made an
error of 1 mile, maybe each made an error of a
half a mile; but there's no question whatever

352

DEPARTMENT OF STATE BULLETIN

tliat when it was accosted and seized, it was in-
ternational waters, well in international waters.
But tliere's another point there. Even if it
were not — and I haven't the slightest doubt
about where it was when it was seized — even if
it were not, under the general conventions of
international law, particularly the 1958 con-
ventions on the law of the sea, when a war vessel
comes into territorial waters, the coastal coun-
try has the right to require it to leave; it does
not have the riglit to seize it. In 19G5 and 1966
there were three instances when a Soviet war
vessel came into American territorial waters
briefly. And we have a 3-mile limit. We re-
quired those vessels to leave; we didn't seize
them. A wai-ship is clothed with sovereign im-
munity; so that even if this ship were in ter-
ritorial waters, they had no right to seize it.

Q. 'Why do you think North Viet-Nam seized
the Puehlo — or Korea?

A. I don't know, quite frankly. It's an inci-
dent so utterly without precedent that it's hard
to understand what went on behind it, in their
I minds. It was an outrageous violation of stand-
ard international practice. We have vessels of
that sort along our coast all the time; a vessel
of this sort is standing, just out of the 3-mile
limit off Guam ; the Soviets have vessels of this
sort in the Sea of Japan today. It's never been
supposed that these vessels of any sort would be
seized on the high seas. This is a very, very
serious matter — which we take with the utmost
seriousness.

Q. I understand from reports tliat there are
perhaps indications that the North Koreans —
/ got it right that time — that the North Koreans
are perhaps taking a neto tack in the dipJom,atic
negotiations for securing release of the crew-
men and mayhe the ship, comparing it mainly
to a minor violation which could he amelio-
rated if the U.S. apologized and admitted being
inside international —

A. Well, I don't have that same mformation.
I know there is lots of speculation, but we don't
have anything from North Korea along that
line. How do you apologize for something you
didn't do?

Q. Mr. Secretary, how long is the United
States willing — how much time will the United
States devote to getting their vessel hojck
through diplomatic channels, before military —

A. I wouldn't want to put a time limit on it.

We are trying, as the President has indicated, '
to use diplomatic means to bring about the im-
mediate release of the ship and crew. We don't
think those diplomatic means have been fully
exhausted yet; but we hope very much that
they'll be successful, because if they're not suc-
cessful, then some very, very grave issues will
rise. We must have this ship and these men back.

Q. What if it turned out that diplomatic chan-
nels failed entirely? Would it ever come to the
point before military efforts would have to be
made, where we^d say, "TFeZZ, we lost the ship,
lefs not lose any more'"'?

A. Well, I thhik the notion that American-
flag ships can be seized on the high seas by any
country around the world is something that we
just caimot possibly accept. This is something
we have not accepted throughout our history,
and we don't intend to start now.

Q. Would that necessarily be am, cbcceptance
of it?

A. Why of course, if you just say, "Well, it's
gone — goodby — that's the end of it — it's too
bad." Of course that would be an acceptance of
it.

Q. Does the — not accepting it worth the risk
of provocation of —

A. Well, that's something that judgment will
have to be made on. I don't want to prejudge
what steps might have to be taken, but my
advice to North Korea would be to release that
ship and the crew at the earliest moment.

U.S. System of Alliances

Q. Ifs been said that the war in Viet-Nam is
being fought to prevent a larger war in South-
east Asia. Does that mean it^s the role of the
United States to perhaps — // things in Bolivia
get a little bit hotter, does that mean we'll be
going to Bolivia? Does that mean weUl be going
back to the Dominican Republic? Does that
mean we''re going to be going into Africa? Is
this really a deterrent? Or are we becoming
more cautious now that we''ve involved our-
selves—

A. We have formal alliances with more than
40 countries. Those alliances are there, as a part
of the supreme law of the land. In the Pacific
those include Korea, Japan, the Republic of

' For President Johnson's address to the Nation on
Jan. 26, see ibid., Feb. 12, 1968, p. 189.

MARCH 11, 196S

353

291-613—68-

China, the Philippines, ThaiLand, Australia,
New Zealand — and South Viet-Nani covered
by the SEATO Treaty. In this hemisphere,
most of the nations of the hemisphere are in-
cluded in the Rio pact. In Western Europe, most
of them are in NATO. I would say that if we are
needed for the defense of those countries we're
available and we'll make good on our commit-
ments to those countries.

I think that if anybody should ever suppose
that we would not, then tlie possibility of orga-
nizing a peace would disappear. Now, we're not
the world's policemen. I had a count made not
long ago — of the 375 crises that have occurred
somewhere in the world since AVorld War II, we
were involved in only six of them. We don't go
around looking for business. We didn't get in-
volved when India and Pakistan started fight-
ing each other — when Somalia and Ethiopia
had some shooting against each other — ^Morocco
and Algeria — we didn't get involved in the
Arab-Israeli fight. We don't go around looking
for business ; but we do have alliances, and we've
got to make good on those alliances. Otherwise
the dangers to this country could be beyond
comprehension.

Q. It seems to 'me tlutt the Viet-Nam situa-
tion, as it is now, developed very sloicly and in
distinct steps. And as it evolved it grew larger.
And is something like this going to happen
again — / mean, it started on a very small scale,
U.S. advisers were sent there — / mean, is this
going to he a pattern? Are we going to get into
wars like this?

A. You'll have to ask the Communist world,
various pai'ts of it, whether they're going to
launch this kind of attack against those with
whom we're allies. If they do, I would think tlie
answer is "Yes, we will." If they don't, then we'll
have peace, but the answer to that lies with
somebody else, not with us.

Q. We have possibilities then, of unlimited
involvement?

A. That depends on how far the Communists
will go in what they call their "wars of liliera-
tion." And of course we're involved if our allies
become involved in such efforts, you see. Now,
for example, in Korea. In 1966, there were some
.50 incidents of infiltration from North Korea
into South Korea across that demarcation line.
In 1967 that went up more than 10 times, over
570 individual acts of infiltration from North
Korea into South Korea. If this builds up, the

United States has got to be there alongside of
the South Koreans, saying that this is not going
to happen. We have an alliance with Korea that
makes it necessary for us to do that, and North
Korea ought to undei-stand that, at the earliest
stages. They're not going to have a chance to
repeat that performance against the South
Koreans.

Q. Are our military capabilities such that loe
will be able to maintain the territorial integrity
of South Viet-Nam and South Korea at the
same time?

A. Oh, I think so. In the first place, we don't
at the present time see direct indications that
the North Koreans have in mind a large-scale
invasion of South Korea. But we've increased
our forces by the numbers of men that we have
in Viet-Nam. We have in our xlrmed Forces,
outside of Viet-Nam, the same nmnbers that we
had before the Viet-Nam affair started. But we
haven't dissipated our capabilities because of
Viet-Nam.

The additional i-einforcements now going to
Korea did not come from Viet-Nam. Not a man
has been diverted from Viet-Nam.

So we ha^e the capabilities to meet our com-
mitments in this hemisphere, in the Pacific, and
in Europe. We haven't reduced our forces in
Europe.

The Heart of the Matter in Viet-Nam

Q. General Westmoreland [Gen. Williarn 0.
Westmoreland, Commander, U.S. Military As-
sistance Command, Viet-Nam] said that within
2 years som.e American troop)s would be brought
home, they^d be no longer needed. Is the United
States holding out for the time inhcn the mili-
tary superiority will force the North Vietnam-
ese into negotiation or perhaps ending the con-
flict unilaterally by the South?

A. Well, it's hard to put a precise time factor
on it, but I would think that the Viet Cong and
North Vietnamese forces could not possibly sus-
tain what they've been doing, for example, the
last couple of days, for very long. I think that
when Hanoi comes to the conclusion that it is
not going to be permitted to take South Viet-
Nam by force, they may make some new deci
sions on the matter. I think that's probably
what can —

Q. What do you think will force them to this
realization? What will it require?

I

364

DEPARTMENT OF STATE BULLETIN

A. Clear demonstration that if they send
forces to tlie South they'll be destroyed. Phis
the political and economic nation-building proc-
esses going on in South Viet-Nam.

Q. Do you foresee this in the immediate
future?

A. Well, I can't put a time limit — I think the
time is coming, but I can't put a date on it.

Q. Do you see the events of the past few days
as a major turning point, possil>7y a go-for-
hroke. or —

A. It might be sometliing of a climactic
period, because there are indications that the
Viet Cong and North Vietnamese forces are
making an effort at the moment which thej- can-
not sustain over any protracted period of time.
And what they will do when this effort is
thrown back, we don't know yet; but I would
think that we're seeing a lunge, rather than a
sustained new jihase of the war.

Q. From tchat you're saying it seems to me
that North Yiet-Nam isn't going to get out of
this war vrith its dignity, if it gets out of it at
all — if they decide to quit.

A. Well, I'm not suggesting —

Q. It seems to me there is a hox — that we're
all in —

A. I think this question of dignity — if its
dignity depends on its lia\'ing South Viet-Nam,
then it had better change its mind about what
its dignity involves. We don't want North Viet-
Nam to surrender anytliing, not an acre of
ground, not a man — not to change its regime,
not to change its relations with other Connnu-
nist countries. We're not asking them to do any-
thing except stop shooting at Laos and South
Viet-Nam. If that is to be called "unconditional
surrender," that to me is an abuse of the Eng-
lisli language.

Q. Well, it seems to me that the way political
situations develop, one side is not going to nego-
tiate until it feels it's in a strong position or
until ifs beaten. I think the United /States prob-
ably did that last year when loe felt we were
in a strong position, when we rejected Kosy-
gin^s '■'■stop the bombing'''' play, and we felt we
u^ere in a strong position, perhaps this war could
be won militarily.

A. We didn't reject it — we simply asked what
the other side would do if we accepted it. No, we

dicbi't reject it, but 1 year before that was a
temporary cessation of the bombing — that was
a suspension. Now, the other side has said that
that is an ultimatum, and they're talking now
about a permanent, a definitive cessation of the
bombing — they phrase it in different ways —
sometimes they say, "once and for all"; some-
times they say, "for good" ; sometimes they say,
"definitively'' ; sometimes "permanently"' — these
are all synonyms.

Now, if they -uant us to stop the bombmg
permanently, then we must know what they're
going to do. We're not idiots.

Q. That ioasn''t my point; let me rephrase
this. I would itjiagine this is true in negotia-
tions: You try to negotiate when yoior position
is strong, tohen you have a h'lnd of a Uver. As in
the Cuban crisis, Russia, in a way, got out with
its dignity. North Viet-Nam is not going to be
able to do this, from the way I understand the
actions of the administration. In other viords,
the way you expect negotiations to come about is
that they're going to be in a weah position,
they're not going to be able to sustain a tvar for
any longer, and therefore the^fre going to get
out. And it seems to me that that puts us in a hox,
that means this war is going to go on —

A. We never limited ourselves on that theoi-y.
We went to the Laos conference in 1962 to nego-
tiate a settlement for Laos, without having
troops in Laos and only a handful in South
Viet-Nam. At that conference, we accepted the
Soviet nominee as the Prime JNIinister of Laos,
Prince Souvanna Phouma, the present Prime
Minister. We accepted a coalition government,
worked out among the three factions, the right-
ists, the neutralists, and the Communists. We ac-
cepted the neutralization of Laos, international-
ly agreed ; we got no ^performance whatever out
of Hanoi in that agreement. They didn't take
their troops out of Laos as required by the agree-
ment: they didn't stop sending infiltrators
through Laos into Viet-Nam as required by the
agreement ; they wouldn't permit the coalition
government to function, and they wouldn't per-
mit the ICC to function, so — Now, we nego-
tiated on the Berlin blockade M-ith the Russians
back in '48, while the blockade was still going
on —

Q. With, the knowledge that some military
action would be taken —

A. Yes, but one couldn't have called our posi-
tion there a position of strength, in being will-

JIARCH 11. 1968

355

ing to discuss the matter only because of
stren<Tth. We negotiated the Korean affair while
the fighting was going on, on both sides. We
talked about the Cuban missiles while the mis-
siles were being built, just as fast as they could
put tliem together. So we have not been unwill-
ing to discuss these matters, as I've indicated
today. For years we have taken the view that we
will negotiate on the Viet-Nam question at any
moment witliout any conditions whatever. That
has been true when we were in a position of
relative weakness; it has been true when we
were in the position of relative strength.

Now, the heart of the matter is: What is
North Viet-Nam's objective ? If its objective is
South Viet-Nam, then it isn't going to get it,
either by military means or by negotiation.
Now, if that's the only thing that they have in
mind, then we just have some more fighting on
our hands. It's just as simple as that.

President Johnson Confers
With NATO Secretary General

White House Statement

White House press release dated February 19

The President met with NATO Secretary
General Manlio Brosio at noon today [Febru-
ai-y 19] . Tlie President and Mr. Brosio examined
questions of mutual interest concenimg the
NATO Alliance. They agreed that the adop-
tion by Allied Ministers last December of
a constructive program for carrying out the
future tasks of the Alliance provided evi-
dence of the continuing vitality of NATO.'
The President and Mr. Brosio also concurred
that the Allies must consult closely and con-
tmuously on East-West relations and the
achievement of a durable peace in Europe. They
considered the maintenance of NATO's
strengtli, including the U.S. conunitment, as
necessary to continuing stability and security
in the North Atlantic area. This stability and
security provides the basis for exploring with
the U.S.S.R. the possibility of mutual force
reductions.

Department Reaffirms Statement
on Treatment of Pueblo Crew

Statement hy the Department Spokesman '

On February 16 the North Korean Radio
broadcast what it claimed was a "joint letter of
apology" signed by the 82 surviving members of
the crew of the U.S.S. Pueblo.

From both the substance and language of the
statement, it is clear that these are the words
of the Nortli Korean autliorities, not of the crew
of the Pueblo.

According to the broadcast, the alleged "joint
letter" included statements such as the follow-
ing :

"We deserve any pmiishment by the Korean
people regardless of its severity for the crime
we have committed by making overt intnisions
into the temtorial watei-s of a sovereign state,
namely the Democratic People's Eepublic of
Korea, and perpetrating grave hostile acts. Smce
we are not mere prisoners of war but criminals
caught in the very act of espionage, we cannot
have any complaint even should the worst come."'

"We know that when one is captured for con-
ducting espionage against a foreign country, he
should be severely punished in accordance with
the law of that country. The Democratic
People's Republic of Korea is fully entitled to
determine our fate."

"We should be punished severely by the law
of the Democratic People's Republic of Korea
for our own serious crimes. We may expect such
a severe punisliment as may deprive us of even
the possibility of revival."

On January 26, the spokesman of the Depart-
ment of State noted a North Korean broadcast
which referred to the crew of the Pueblo as
"criminals," and which stated, "the criminals
who have violated the sovereignty of another
country and perpetrated a provocative act must
receive due pimishment." The spokesman said at
that time : ^

I am authorized to say that the United States Gov-
ernment would consider any such move by North
Korea to be a deliberate aggravation of an already
serious situation.

I am authorized to reaffirm that statement.

' For texts of a communique and annex released at
Brussels on Deo, 14, 1967, see Bulletin of Jan. 8,
1968, p. 49.

' Read to news correspondents on Feb. 18.
" Bulletin of Feb. 12, 1968, p. 192.

356

DEPARTMENT OP STATE BULLETIN

Secretary Rusk Commends Actions of Marine Security Guards
at American Embassy in Saigon

Remarks hy Secretary Rusk '■

It is my high privilege to extend to each of
you in the graduating class, as you prepare to
depart for your new assignments m all corners
of the world, the President's congratulations
and my own.

This particular occasion is one I did not want
to miss — for a special reason.

I recall telling an earlier class of marines,
just over three years ago :

— that embassy duty was different ;

— that there may be critical occasions calling
for the steady nerves, the courage, and the re-
sourcefulness for which the Marine Corps is
justly renowned;

— that the duties of a marine guard can be
transformed instantaneously from one type of
service to another.

In the intervening years our marines have
continually demonstrated their fine qualities.

General Chapman [Gen. Leonard F. Chap-
man, Commandant, U.S. Marine Corps], I hope
that you and Lieutenant Colonel [Forest J.]
Hunt and the members of the graduating class
don't mind my speaking of the JMarine Security
Guards as "our"' marines. They are ours not only
because we are all Americans but in a special
sense as temporary members of our Foreign
Service family. And I have noticed that many
of our ambassadors speak of their marine
guards as "my" marines. Wlien they say that,
they are not claiming ownership but expressing
pride. "We in the Department of State and the
Foreign Service are all deeply proud of our long

' Made at graduation exercises of the Marine Se-
curity Guard School, held at Henderson Hall, Arling-
ton, Va., on Feb. 16.

and intimate association with the Marine
Corps.

Less than 3 weeks ago "our" marines added
another luminous chapter to the great history
of the corps. They suddenly were confronted
with a situation which called for instant de-
cision, fast action, and steady courage — a situa-
tion in wliich they had to fight to carry out
their twofold mission: protection of classified
material and protection of lives and property.

In the early morning hours of January 31 our
Embassy in Saigon was subjected to a vicious
surprise attack, with rocket launchers, auto-
matic weapons, grenades, and small arms. In
that critical moment our marines once again
demonstrated their resourcefulness, steady
nerves, and valor.

I quote from a dispatch received shortly after
the attack was defeated and the attackers wiped
out to the last man :

(The) Marine Security Guards reacted with disci-
plined enthusiasm, and the bravery shown surpassed
all expectations for this fine body of men. No penetra-
tion was made by any enemy force on any level of the
Embassy building itself.

That was written by the Embassy Security
Officer, my friend Leo Crampsey.

A later dispatch from Captain Robert J.
O'Brien, the Officer in Charge of the Marine
guard detachment there, said :

All Marine Security Guards who participated in
eliminating the Viet Cong at the American Embassy
aggressively pressed the attack with determination and
valor befitting the highest traditions of the Marine
Corps.

So, once again, "imcommon valor was a
common virtue."

MARCH 11, 1968

357

CITATION FOR HEROIC SERVICE

to
The Mabine Secxjbity Guard,
American Embassy, Saigon '

In recoguitiou of the effective defense of the
United States Embassy in Saigon by the United
States Marine Guard during the eariy morning
of January 31, 1968; the vigilance, valor and
cool-headed devotion to duty of these men pre-
vented the Viet Cong from entering and destroy-
ing the Chancery Building.

Presented with profound gratitude.

Dean Rusk

Secretary of State

February 16, 196S

' Presented to Gen. Leonard F. Chapman, Com-
mandant. U.S. Marine Corps, by Secretary Rusk
at the Marine Security Guard School graduation
exercises on Feb. 16.

To our profound sorrow, in their heroic de-
fense of our Embassy, one of our Marine Se-
curity Guards was killed and nine were
wounded, of whom six have returned to duty.

We must not overlook the valor of the Army
Militai-y Police who augmented our Marine de-
tacliment. Two Military Police were killed in
action defending the perimeter of the Embassy
grounds, while the others were actively engaged
in eliminating the terrorists. They, too, warrant
our highest accolades.

The marine who gave his life was Corporal
James C. Marshall, 21 years old, of Monroeville,
Alabama — killed by sniper fire while engaging
the Viet Cong suicide attack. His sacrifice, and
the bravery under fire of the entire detachment,
will be recorded in the history of the Foreign
Service.

I cannot help but feel overwhelming grati-
tude and pride in the conduct of our Marine
Security Guard in Saigon — and of our Marine
detachments throughout the Foreign Service —
and in all of you sitting here before me.

My colleagues and I know that, given the
same circumstances — which we pray will never
i-ecur — our Marine Security Guards all over the
world would react as effectively and coura-
geously as did the detachment in Saigon.

Many of you, I see, have already served in
Viet-Nam. Now you are again ready to serve
our country overseas.

The Marines are very much on the minds of
all of us these days. They have been carrying a
tremendous burden in I Corps in Viet-Nam.
This coimtry owes them an enormous debt.

As you marines before me join our Foreign
Service family, you know the high importance
of your responsibilities. And I hope you are
aware of the great influence you and your fine
uniform have in rej^resenting to other peojjles
all around the world our great Republic.

For nearly 200 years, the Marine Corps and
the Foreign Sei-vice have worked together to
defend the interests of our nation and further
the cause of freedom. In the same sj^irit of co-
operation and dedication that have marked our
common efforts in the past, we shall continue
to pursue our high national purpose : to defend
liberty, defeat aggression, and achieve a reliable
peace.

So, gentlemen, I welcome you to the Foreign
Service.

Thank you, good luck, and God speed you
on your mission.

358

DEPARTMENT OF STATE BULLETIN

INTERNATIONAL ORGANIZATIONS AND CONFERENCES

From Aid to Cooperation: Development Strategy for the Next Decade

Statement hy Eugene V. Rostow
Under Secretary for Political Affairs '■

Mr. President [Dinesli Singh], I should like,
if I may, to add my congratulations to the
tributes of our colleagues who have already
spoken. It is singularly appropriate that this
second session of UNCTAD is meetmg m New
Delhi and that you have been elected as our
President to succeed the distinguished and
etTective representative of the United Arab Re-
public His Excellency Dr. [Abdel Moneim]
Kaissouni.

Mr. President, your enlightened coimtry and
your jjroud and cultured people face an eco-
nomic challenge which recapitulates the diffi-
culties and the promise of the development proc-
ess. It is a hopeful augury that we meet at a
time when India's economic programs have ac-
complished an historic breakthrough in agri-
cultural production. That achievement rests,
above all, on tlie plans and efforts of the Indian
Government and the Indian people. In prepar-
ing and revising its economic plans, the Gov-
ernment of India has had the courage to learn
ivom. experience through procedures of study
and public discussion which are a tribute to the
strength of Indian democracy.

The programs of the Indian Government have
been supported by a far-reaching process of
international cooperation. India has intelli-
gently used the resources of world science and
those of governments, private business, and
private foundations representing every branch
of the human family.

To us, this pattern, this vision, of human
solidarity in overcoming the curse of poverty

' Made before the Second United Nations Conference
on Trade and Development at New Pelhi, India, on
Feb. 5 (press release 24 dated Feb. 6). Mr. Rostow was
U.S. Ministerial Representative to the Conference.

and ignorance is the right framework for deal-
ing with the problem we now call economic
development. In our view, all goveriunents and
all peoples, whatever their social systems, should
woi'k together in accordance with the principles
of the United Nations Charter to end the specter
of poverty which haimts the world. This prin-
ciple is the source of American policy, and I
can assure you that it will remain the source of
our policy.

The moral climate of the world has changed
since President Roosevelt issued his famous call
for freedom from want and President Truman
aimounced liis Point 4 program. Through one
of the mysterious leaps of the human spirit,
mankind in our generation has resolved to
abolish conditions of poverty and ignorance
which have been accepted for millennia as the
order of nature. New and persistent hopes have
seized the mind of man. Those hopes have be-
come aspirations — and then programs.

The theory of economic growtli is as old as
economic history. "WHiat is new, as our Secretary
General remarked in his opening statement on
Friday, is man's determination to accelerate the
pace of economic progress in the developing
world. We have determined to make longrun
economic growtli a task for the short run.

Governments and private groups have sought
to find means to reach this goal. Some of these
means have failed, as we all know. Others have
shown promise. A few have succeeded.

Scholars, bureaucrats, and politicians have
all made a contribution to this search for effec-
tive waj'S to accelerate the process of develop-
ment and to have it include all of mankind.

Many reasons have been advanced to explain
our preoccupation with this task: reasons of

MARCH 11. 1968

359

prudence, reasons of self-interest, or the quest
for political influence. In the end, however,
there is only one acceptable premise for our com-
mon endeavor : We must act, and act together,
simply because we have come finally to believe
that poverty is wrong and that for the first time
in human history science makes it possible to
right this wrong. The poor, we are convinced,
need not always be with us.

The United States is proud to have been a
leader in the laborious development efforts of
the last 20 years. Our policy rests on the broad
principles of the United Nations Chartei- — on
"respect for the principle of equal rights and
self-determination of peoples" and on the prac-
tice of "international cooperation in solving in-
ternational problems of an economic, social, cul-
tural, or humanitarian character." We believe in
a world order of diversity in which each country
is free to pursue its own concept of social prog-
ress in peace, assured of the support and cooper-
ation of the world commvmity, to which it has
a right to belong.

On Thursday, we all heard the stimulating
and eloquent address of the Prime Minister of
India [Mrs. Indira Gandhi]. The United States
agrees with her solemn words :

The United NaHons was established twenty-three
years ago to keep world peace and promote human
prosperity. The juxtaposition of peace and prosperity
is not a contrivance for stating moral precepts. The two
are indissolubly linked together. Without peace there
can be no prosperity for any people, rich or poor. And
yet, there can be no peace without erasing the harsh-
ne.ss of the growing contrast between the rich and the
poor.

In this spirit. President Jolmson recently
said : =

For two decades America has committed itself
against the tyranny of want and ignorance in the world
that threatens the peace. We shall sustain that com-
mitment.

Goals of the Conference

The main outlines of the development prob-
lem as we face it today are magisterially pre-
sented in the report of our Secretai^ General,
Dr. [Raul] Prebisch, and were magisterially
sumnied up in his speech on Friday. We concur
in his sense of urgency; in his thesis of shared
responsibility, a responsibility, that is, shared
by the developed and the developing countries;
and in his stress on the necessity for a global
strategy. An adequate rhythm of growth, he
points out, requires an international harmoniza-

tion of economic policies, the discipline of de-
velopment plans, changes in structure and atti-
tude both in the develojied and in developing
countries, and access to the capital resources of
the developed world for developing coimtries
which are pursuing realistic development
policies.

The panorama we face is far from satisfac-
tory. We all know that the rate of economic
progress in the develoi^ing world as a whole has
been spotty and generally too slow. Still, there
are instances of success, and they should be
carefully taken into accoimt.

The Secretary General's report lists 18 devel-
oping countries with compound growth rates of
real product rangmg from 6.1 percent to 10 per-
cent annually during the period 1960-65. But
many more people than live in these 18 countries
live in countries which experienced growth rates
between 4 percent and 6 percent during this
period; and still many more live in 15 countries
with a growth rate below 4 percent.

This record of growth is meaningless unless it
is considered in relation to the rate of growth of
population. Per cajiita growth rat«s are the
curves of greatest concern to us. There is no need
in this room to stress the fact that policy must
bear equally on both sides of the development
equation — on economic growth and on family
planning — if success in the development process
is to become a reality. In per capita terms, the
record is indeed somber.

The secretariat reports per capita real prod-
uct in the developing countries grew at an an-
nual rate of 2.2 percent in the period 1955-60,
that this amiual rate fell to 2 percent in the next
5 years and was still at that low level in 1966.
These depressing aggregates, moreover, mask
even grimmer statistics for certain areas of the
developmg world.

These bleak figures define the problem before
us. It is a challenge to the energy and intel-
ligence of man, a challenge we can and must ac-
cept as a duty whose claim upon us is the in-
escapable predicate of our obligation to preserve
the peace. We cannot conceive of a stable and
peaceful world order without progress, any
more than we can expect progress without peace.

As we see it, this session of UNCTAD can and
must give a fresh impulse to the process of de-
velopment. That impulse should flow naturally
from the agreement of our governments to har-

' For excerpts from President Johnson's state of the
Union message, see Bulletin of Feb. 5, 1968, p. 161.

360

DEPARTMENT OF STATE BTTLLETIN'

monize their policies in a number of areas which
experience and analysis have identified as criti-
cal. The United States believes that agreement
among us on these critical issues is not only pos-
sible but indispensable. We pledge our most
earnest efforts and our full support to that con-
structive end.

The work of this Conference has been un-
usually well prepared. "We have the advantage
of the Secretary General's useful report, the
documents prepared by the secretariat, and the
studies made by the OECD [Organization for
Economic Cooperation and Development] and
the coimtries which met together to draft the
Algiers Charter.'

We were encouraged and impressed by the
message we received from the goodwill mission
which came to the United States to present and
discuss the Algiers Charter. We welcome, and
we reciprocate, the spirit of reality and coopera-
tion which dominated their statement. The de-
veloping nations which met in Algiers, we were
told, wish this Conference to avoid polemics and
to concentrate on economic issues. They recog-
nize the primary responsibility of the develop-
ing nations for their own development plans
and for the disciplined efforts in many realms
required to make those plans effective. They
wish to move away from the concept of aid and
to substitute for it that of cooperation. They
fully recognize the contribution which private
investment and private entrepreneurship can
and should make to the next stage of the devel-
opment process.

Our own preparations for this Conference,
and those of the OECD countries, have been
carried out in the same spirit. We know that our
agenda contains many items on which positions
are now far apart. They raise policy problems
of inherent difficulty. But the spirit of realism
and the desire for constructive cooperation
should find ways to reconcile most of these dif-
ficulties. I am confident that in an atmosphere
of good will, and with a willingness on all sides
to examine reasonable compromises, we should
be able to reach agreement on a number of posi-
tive and constructive programs of action.

We have no illusions that the task will be
easy. We shall be dealing here with a series of
problems of trade and investment in the devel-
oping world. These problems cannot be exam-
ined in isolation. The main lesson of success in

the development process is that progress comes
most rapidly in those countries whose develop-
ment plans aim at the integration of their econ-
omies into the world economy as a whole. That is
the key to the fundamental problem which Dr.
Prebisch so felicitously identifies as "dynamic
insufficiency." The dynamic pressure of world
economic forces, along with those of education
at home and abroad, should help guide the
transformation of attitudes and structures
within the developing countries, a process of
change which Dr. Prebisch rightly character-
ized as the fundamental condition for rapid
progress in development. The same forces are
transforming structures and attitudes in the
developed countries.

We should define our goal, therefore, as the
acceleration of development witliin the frame-
work of a growing and progressive world econ-
omy, governed by the dynamic principles of the
international division of labor. We should avoid
solutions which would isolate the developing
countries from the world economy.

As we all know, the world economy is not
perfect and its basic machinery needs further
reform. Balance-of-payments difficulties and a
growing shortage of reserves have created tem-
porai-y problems for the world monetary system
which, for the moment, limit the availability
of investment funds from the United States and
require care in the provision of aid. In this
realm, cooperation is being organized in man-
aging the balance-of-payments adjustment
process, in accordance with the recent com-
munique of the OECD.* This step, and the
prospective implementation of the agreement
reached at the Rio meeting of the International
Monetary Fimd,° should strengthen the world
monetary system, the essential foundation of an
open and growing world economy, and one of
equal benefit to developed and developing na-
tions alike.

In the field of trade, too, the horizon is
hardly without clouds. The successful comple-
tion of the Kennedy Round negotiations was a
remarkable achievement of economic coopera-
tion, and it has created many opportunities
for growth in every economy of the world.

At this Conference we shall be considering
proposals for a new system of generalized tariff
preferences for the developing countries in the
markets of the more industrialized parts of the

' For text of the Algiers Charter, see U.N. doc.
A/C. 2/237.

* For text, see Bulletin of Dec. 2.5, 1967. p. 8.81.

• For background, see ibid., Oct. 23, 1967, p. 523.

MARCH n. 1968

361

world. This, in our view, should be a major
advance, promising a contribution to the eco-
nomic welfare of the developing countries go-
ing beyond the Kennedy Round. If we can agree
on the essential bases through which this idea
can become a policy, we shall have opened im-
portant new opportunities for investment and
expansion in the economies of the developing
nations.

At the same time, however, we should not
lose sight of the hazards in the field of trade
policy — hazards old and new. The protectionist
impulse is always strong and is supported
always by plausible arguments. We should ex-
amine the problems before us with care, in order
to avoid trade j^olicies which depart from the
principle of comparative advantage, at the same
time that we open up vast markets to competi-
tive opportunities.

There is another widespread danger to the
development process which I should mention as
a general problem which is faced by many
nations: the burden of armaments expenditure.

The problem is not peculiar to the developing
countries. All countries share this terrible load.
There has never been a period in liistory when
mankind spent so large a share of its income on
arms. The cost of this effort is more than eco-
nomic. The arms race does not bring security.
It has thus far not been possible to bring about
either regional or general agreement on arms
limitations. The cost of modern arms is heavy
for the developed countries ; for the developing
countries it is often catastrophic.

The Problem of Food Supply

With these general principles in mind, let me
turn to some of the more particular items on our
agenda.

I propose to begin with the problem of food
supply, a basic task of the world economy and
of each national economy.

A recent report on the World Food Problem
of President Johnson's Science Advisory Com-
mittee concludes that "total food consumption
in the developing coimtries must approximately
double during the period between 1965 and 1985
if the critical physiological needs of rapidly
expanding populations are to be met." But, the
report points out, increases in food production
and consumption are not stimulated by physio-
logical need alone. They are determined by eco-
nomic forces as well. The rate of production of
food is governed by demand, which in turn is

governed by the development of the economy as
a whole. "There is a strong interdependence,"
the report points out, "between agricultural
output and the total output (GNP) of a national
economy."

The food problem, fundamental as it is, can-
not be considered except as part of the problem
of development in its totality. Only a growing
and productive economy can produce or pur-
chase the food it needs for its people. And only
a people adequately fed will have the vitality
to engage in the hard and demanding work of
economic progress. These same themes dominate
the Secretary General's report on "Developing
Countries and the Food Problem."

Food is not a problem apart but an aspect of
the task of most effectively improving the use of
available resources. The urgency of the food
problem does not imply that every country must
seek to become self-sufficient in food. We are not
here to repeal the principles of rationality in
economics. Unless rapid progress is made in
family planning — progress at a higher rate than
we can now observe — a large share of the gains
of economic development, however rapid, will
be absorbed in a Malthusian race.

The problem of food sufficiency cuts across
many areas of concern to UNCTAD. It is neces-
sarily a first item of realistic development pro-
grams. In the developing nations every govern-
ment must decide how much food to grow and
how much to buy. It must make these decisions
in terms of its best estimates of future trends.

It is natural that my Government has a strong
interest in problems of food and agricultural
development. For some years concessional
shipments of American food surpluses have
tended to obscure the significance of lagging per
capita food output as a major problem in many
developing countries. We have been among the
first to recognize the need for an urgent con-
certed effort to modernize and accelerate agri-
cultural development in developing regions.

I am sure we are all agreed that food aid, how-
ever essential, cannot be regarded as anything
but an interim solution. For one thing, the
vacuum filled by food aid results from a lag in
the development of the agricultural sector in
many countries which pulls down rates of over-
all growth. It has sometimes had a negative
effect on food production in the recipient coun-
try. Increased per capita output of food is essen-
tial, at least in those regions where it is
economically rational to allocate increased re-

362

DEPARTMENT OF STATE BULLETIN

sources to agriculture. We are now in a period
when food aid shipments will depend in largo
pai'i on production i)rogramed for this purpose.
The era of vast food surpluses is over. It is in
no one's intei-est that this anomalous situation in
world production and trade in food be perpetu-
ated any longer than necessary.

The point is often made that the food problem
is not a general one but one affecting only a few
countries. This may be true today, but the prob-
lem co\ild easily become more widespreacl and
serious if appropriate steps are not taken
promptly. Many countries which used to be food
exporters now import food. And others are near
that margin. What we need is a well-thought-
out comprehensive program of preventive medi-
cine. Our purpose should be to invalidate today's
projections of sharply rising food deficits by
altering present trends in food production and
population.

We feel that this Conference can make its own
contribution to the solution of the W'orld's food
problem. UNCTAD's special concern, and spe-
cial expertness, is the problem of trade and de-
velopment seen as a wjiole. I hope we shall
endorse as policy objectives of high priority :
tlie modernization of the agricultural sector of
liiose developing countries where agricultural
expansion makes economic sense; the associated
buildup of industries allied to agriculture; the
application of improved technology; effective
public and private assistance to further these
aims; and appropriate domestic jiolicies to
create the necessary infrastructure and provide
the necessary incentives for agriculture.

It will be important to have UNCTAD study
the positive opportunities associated with an
all-out attack on the agricultural development
jiroblem — the opportunities for diversification,
for expanding export availabilities, for new in-
dustries, and for new initiatives in trade and
economic cooperation. The excellent documenta-
tion which has been provided for this item of
our agenda sets the stage for what can, we feel,
be a constructive discussion resulting in the
articulation of constructive initiatives.

I mention these prospects only to illustrate the
scope of the problem. It would be fatuous to
suggest that because new techniques are avail-
able, they will automatically be put to effective
use in solving the world's food problem. Much
more is needed. Along with improvements in
technology', there must be corresponding in-
novations in education, in economic organiza-

tion, in management, and in the application of
research. The principal lesson to be learned from
successful agricultui'al programs in the develop-
ing world is the importance of economic incen-
tives in inducing the use of fertilizers, pesticides,
and better methods of water control. I hope this
session of UNCTAD will draw out, express, and
focus the political will that is needed to push
these programs to that level among the compet-
ing priorities which, in our view, they deserve
to have.

Kennedy Round Trade Opportunities

Next, I should like to comment on certain
issues of trade policy and particularly on
trade in manufactured and semimanufactured
goods- — the growing edge of many developing
economies and one of crucial importance to their
evolution as diversified and resourceful eco-
nomic systems capable of adaptation to the
changing tides of world trade.

We are pleased that the secretariat singled
out the record of the United States in this re-
spect as "one of the most striking features of
the trend during the period 1961-65." Today the
United States purchases 35 percent of all the
exports of manufactured and semimanufactured
goods from the developing countries. Our im-
ports of these goods grew at the annual rate of
19 percent in the 1961-65 period and increased
to more than $2 billion in 1966, a 35-percent in-
crease over the 1965 level. We take satisfaction
in these developments, which have not taken
place without strain as our markets become ad-
justed to new sources of supply. The impoi-t
needs of developing countries are increasing
rapidly, and the long-term market outlook is
not good for a number of primary commodities
which are important to the developing nations.
We know, therefore, that there must be no falter-
ing of export growth in the field of manufac-
tured and semimanufactured goods from the de-
veloping countries. Some recent steps give
grounds for cautious optimism. Perhaps this
Conference can lead to others. Certainly there
are export possibilities which have not received
the attention they deserve.

I mentioned the Kennedy Eound in another
comiection a few moments ago. As a result of
these imprecedcnted negotiations, the average
tariff level in the industrialized coimtries will
drop Ijy 37 percent, to a level of less than 9 per-
cent. These cuts will open new trade opportuni-
ties in all the industrialized countries. Tariff

MARCH 11. liies

363

cuts do not, of course, in themselves lead to in-
creased trade. But they do create opportunities
that can be realized through improved market-
ing and cost consciousness. Developing coun-
tries with a good industrial base already are m
a better position than the majority of develop-
ing countries to take advantage of these possi-
bilities. But no country should neglect the op-
portunities the Kennedy Kound has created for
improved access to world markets. Certainly,
none need be discouraged. In this regard, it is
instructive to study the extraordinary export
progress of Mexico, Korea, and the Republic of
China, which made extraordinary advances
even at pre-Kennedy Eound tariff levels.

The decision to establish a joint GATT-
UNCTAD Trade Center is another promising
recent development. One of its major fimctions
will be to help developuig countries exploit the
trade opportunities of the Kennedy Round.
The tecliniqucs of export promotion must be
better understood and applied if lower trade
barriers are to have their intended effect. This
kind of practical cooperation between the
GATT [General Agreement on Tariffs and
Trade] and UNCTAD augurs well for the
future.

Tariff Preferences

Turning to the immediate business of this
Conference, I should like to comment on the
important issues of tariff preferences. We have
before us the OECD paper, the Charter of Al-
giers, and several UNCTAD secretariat docu-
ments which help define the issues we shall have
to deal with in this connection.

My Government welcomes the fact that,
while differences of scope and of principle re-
main, we start our examination of this question
on the footing of broad and important agree-
ment. There seems to be general acceptance of
the concept of a generalized system of tariff
preferences to be extended by all developed
countries to all developing countries, a system,
moreover, that does not involve the granting of
reciprocal special advantages to the developed
countries.

The idea of tariff preferences for the develop-
ing nations has a high potential. It involves a
series of issues which will be carefully exam-
ined during this Conference. I can assure you
that the United States stands ready to cooperate
in the effort to resolve these problems.

We are convinced that a temporary system
of generalized preferences for the developing
coiuitrics should help accelerate their rate of
growth. Such a system would also avoid the
adverse effects of special preferential trading
arrangements between certain developed and
developing countries, agreements which would
divide the world into trading blocs. Such a de-
velopment of world trade could, in our opinion,
have unfortunate political and economic effects.
This concei'n also underlies the call in the Char-
ter of Algiers for a generalized system of
preferences.

It may be useful to draw the attention of the
Conference to one issue which the United States
and a number of other countries consider par-
ticularly important. This is the issue of reverse
preferences — preferences granted by particular
developing countries to particular developed
countries.

Such preferences often burden developing
coimtries by increasing the costs of their im-
ports. While we recognize that there are reasons
for these preferences — reasons of history in
some cases or as compensation for aid programs
in others — they have become an anachronism.
The recipients of reverse preferences have often
stated that they do not insist on these prefer-
ences and that it is up to the developing coun-
tries themselves to decide whether they should
be continued. For its part, the United States
has already agreed with the one covmtry which
grants reverse preferences to us, the Republic
of the Philippines, that the reverse preferences
will not be extended when the present agree-
ment expires.

For us there is an element of equity in this is-
sue: Is it reasonable that the United States
should give a preferred position in the Ameri-
can market to the products of countries which
discriminate against American goods? I believe
the question answers itself.

Regional Economic Cooperation

Improved market access, greater attention to
export promotion, and tariff preferences will aid
the exports of developing countries. But there
is need for other actions as well. We hope this
Conference will wish to give a new impetus to
the movement for regional integration. Today in
many areas the efficient application of modern
industrial technology to production requires

364

DEPAKTMENT OF STATE BtTLLETIN

large industrial plants, long production runs,
and a high degree of specialization. In conse-
quence, modern industries need a large market.
In many developing countries such a market
does not exist. As we in the United States know
from our own history, it is too much to expect
that some new jn-oducers can immediately con-
front the world market and the competition of
established producers. But if developing enter-
prises are exposed to more tolerable competition
within regional markets, it should accelerate
their ability to reach a competitive position in
wider international markets.

There are lessons for the developing world in
the outstanding achievements of the European
Economic Community. Kegional economic co-
operation has also made commendable progress
in Central America and in other developing
areas.

But the regional movement faces stubborn
economic, political, and psychological barriers.
The autarchic policies of many governments
have strong roots in the fears of businessmen
and government leaders — fears of change and of
the unknown.

For our part, we are prepared, now as in the
past, to assist meaningful progress in the direc-
[ tion of regional economic cooperation. Our sup-
port of such movements in the past has not been
limited to verbal endorsements, nor will it be
I: in the future. For a number of years, we have
given economic and tecluiical aid to the Central
American Common Market. We have under-
taken to contribute toward easing the transi-
tional difficulties in forming the Latin Ameri-
can Common Market. We are also prepared to
support multinational projects for building in-
frastructure through the Inter-American De-
velopment Bank. We have contributed $200
million to the Asian Development Bank and
have asked the Congress to authorize an addi-
tional $200 million for the Bank's special funds.
We are also prepared to give assistance to re-
gional economic cooperation in Africa and in
the Middle East.

We believe that regional cooperation has much
to contribute m the years ahead to the progress
and stability of many parts of the developing
world. We are, therefore, favorably disposed
toward the interesting proposal on our agenda
from the XINCTAD secretariat suggesting that
specific regional undertakings by the develop-

ing countries be matched by a declaration of
support by the industrialized countries. We look
forward during the coming weeks to exploring
the content of such a common effort.

Commodity Problems

Now I should like to say a few words on the
much mooted subject of commodity problems.
It is natural that the state of the basic com-
modity markets should loom large on our
agenda. Commodity production is, after all, the
foundation of the economies of many develop-
ing countries and their major source of export
earnings.

Commodity trade is plagued by a variety of
problems : by persistent overproduction in some
key products, by wide and destabilizing price
swings in other key products, by severe competi-
tion from both natural and synthetic products,
and by import restrictions and preferential
arrangements.

We meet at a time of difficulty in the markets
for several raw materials and other primary
products. In some cases, these difficulties reflect
cyclical conditions and should be relieved by
higher growth rates in the industrialized world.
In others, supply has proved unresi:)onsive, for
a variety of reasons, to market signals. In cer-
tain cases, there are structural problems which
have been the object of concerted international
effort.

There is no one solution for this range of
problems. Policy must be tailored to the prob-
lems of specific commodity markets. There is
no alternative to the process of getting at the
facts and then developing and evaluating pos-
sible courses of action which might be usefully
taken to meet individual commodity problems.
The special contribution which UNCTAD can
make is in helping governments to understand
the possibilities and limitations of particular
types of action as applied to particular types of
products.

We know that in certain cases, such as those
of some tropical j^roducts, coimnodity agree-
ments may be practicable and helpful if produc-
tion control is also possible. In the case of cof-
fee, the agreement is playing an increasingly
constructive role in stabilizing prices and pro-
moting an attack on the problem of oversnpply.
On the other hand, for temperate products and

MARCH 11, 1968

365

commodities subject to replacement by synthe-
tics, commodities which provide a substantial
percentage of the export earnings of developing
countries, it is generally accepted that other
approaches should be emphasized. Diversifica-
tion, more efficient production, improved mar-
ket access, development of new markets, careful
domestic management in the developed coun-
tries so as to avoid excessive production and
allow developing countries a share of market
growth are some of the general lines being ad-
vanced for consideration. We are weighing and
testing policy approaches to these problems. We
believe the Conference should give desirable
impetus to the consideration of these alternative
approaches.

In this connection, one particularly promis-
ing avenue the Conference will be specifically
exploring is the role of diversification in com-
modity policy. For a number of commodities,
diversification, it seems to us, offers the best;
hope for a long-tenn improvement of market
conditions.

We all know that when a country has sub-
stantial resources invested in producing com-
modities in structural surplus there is a double
cost: Tlie surplus depresses prices; the resources
used to produce them would normally bring
higher returns if they were invested in manu-
facturing, in commodity exports with better
growth potential, or in foodstuffs for rising
local needs.

To agree in principle on the need for diversi-
fication in certain conmiodities is relatively
easy. To translate this agreement into specific
courses of action is much harder and often re-
quires investment. A promising start was re-
cently made in coffee. Producing countries have
agreed in principle to use some of the extra re-
sources made available by the coffee agreement
to finance practical projects for shifting re-
sources out of coffee. We have offered to partici-
pate actively in this new venture and to
contribute resources to its success. We hope
other countries will join us.

Before leaving this subject, let me also say a
few words on some commodity mntters we are
all keenly aware of: the current state of nego-
tiations for a cocoa agreement and for the re-
newal of the International Coffee Agreement.
The United States, for its part, is convinced
that real progress has been made and that we
can confidently look forward to success in both
instances in the very near future. We note also

that a conference to negotiate a new sugar
agreement is also being plaimed. The United
States will cooperate in such a conference.

Financial Aid to Developing Countries

Preferences, regional cooperation, and com-
modity problems are three of UNCTAD's main
concerns. Financial assistance to developing
countries is a fourth.

The growing sense of interdependence among
the nations of the world is one of the most
promising international developments since
1945. One manifestation of this idea has been
the flow of aid from developed to developing
countries. The acceptance of this responsibility,
for all its complexities, is a bright page of
modem history.

The most important recent development in
this field is the international coordination of
many programs of economic assistance. The
World Bank has taken the lead in organizing
and staffing several successful international
gi'oups which have devoted themselves to the
economic development problems of particular
developing coimtries. And both the Bank and
the International Monetary Fund have assisted
in the negotiation of agreements for reschedul-
ing the debts of certain developing comitries.
By the middle fifties the International Finance
Corporation had been added to the World Bank
family, and shortlj' afterward the International
Development Association. In the years since, a
major institution for financing development
has been established in each continent of the
developing world. Gradually, substantial addi-
tional resources have been made available to
developing countries by enlarging quotas in the
Fund and, following a recommendation of the
first Conference, by expanding the Fund's
compensatory facility.

In this connection, the replenishment of the
fmids of the International Development Asso-
ciation is one of the most important issues now
before the world commimity. The United States,
as you know, proposed a plan last March for
reaching the target of $1 billion a year in IDA
ftmds within 3 years. Negotiations for the re-
IDlenishment of IDA are well advanced, and we
are hopeful that final agreement on this vital
issue will be reached soon. We shall, of course,
do our share in whatever program commands
general support.

In addition, other parts of the U.N. system

366

DEPARTMEXT OF STATE BULLETIN

are engaged in helping tlie developing nations
to progress economically and socially. Close to
SO percent of the total resources of these agen-
cies is being devoted to economic and social pro-
grams. There luis been a striking increase in
these resources and in their concentration on
development. During the past 8 years, 1960-67
inclusive, the U.N. and the specialized agencies,
not including the World Bank complex, have
spent almost $3 billion, mainly on activities re-
lated to the development and welfare of the de-
veloping countries. United States contributions
accounted for over 40 percent. Bilateral aid pro-
grams have also been enlarged during this
period.

Because of the volume of our international
responsibilities, we have been unable to meet
our aid targets in recent years. But the nature
of our own bilateral programs is such that we
have a large pipeline, large enough, we hope, to
carry us over the present period. "We have, of
course, a balance-of-payments problem which
affects our aid program. We are doing our best
to minimize the effects on developing countries
of the measures we have been obliged to take in
recent weeks.

Private Investment a Crucial Factor

It is increasingly apparent, as we study the
cases of success and failure in the growth proc-
ess, that private investment and jorivate entre-
preneurship are factors crucial to the possibility
of accelerated growth. The job of achieving
rapid economic growth is too large for most
governments to undertake alone. Few can afford
not to make full use of this important inter-
national resource.

I should like to call attention to a paragraph
relating to private investment in the Secretary
General's overall review of recent trends in
trade and development (paragraph 14 of
TD/5) . In reviewing the flow of public and pri-
vate capital during the period 1961-65, the
Secretary General observes that the more rapid-
ly growing countries receive an average of $2.8
per capita annually in net private long-tenn in-
vestment compared to an average of only 23
cents per capita flowing to low-growth develop-
ing countries — that is. less tlian one-tentli of the
amount received by the first group.

High rates of gro'wth bear more than a casual
relationship to high rates of net private long-
term investment. We are met here in UNCTAD

to promote higher rates of growth. Developing
coiuitries, quite properly, look to the United
States and other industrialized countries to help
tliis process. But most of the productive re-
sources of the United States are in private
iiands, not government hands, and the same sit-
uation prevails in most of the industrialized
countries. Some experts in the field of develop-
ment concentrate on the resources available to
the United States and other like governments
for development assistance. By doing so, they
direct attention to the peak of the iceberg, not
to the larger resources which support it. We
should devote a considerable part of our ener-
gies here to finding practical ways to attract
larger flows of private resources from the
industrialized countries to the task of
development.

Private investment is also related to another
item on the agenda — technology. So far as the
United States and other privat«-enterpi-ise
economies are concerned, technology is avail-
able primarily from the private sector. Private
investment brings not only technology but the
management and teclmical skills required to
make effective use of the teclmology. In TD/35,
Supplement I, there are a number of useful sug-
gestions. I trust they will receive the attention
they deserve during the coming weeks. I should
like to put forward an additional idea.

We believe that one of the unportant achieve-
ments of this Conference could be to laimch
an inquiiy into the legal luid policy framework
within which private investment and jjrivate
entrepreneurship are drawn into the develop-
ment process. Such an effort could make these
indispensable factoi-s of growth more readily
available to the developing comitries. Such a
study might lead to widespread agreement on
a fair code defining the rights and the obliga-
tions of foreign business enterprise in the devel-
oping countries — a balanced and agreed code,
which could simplify and speed up the process
of mvestment.

AYe realize that this is a vast and many-sided
subject and that some important progress in
the field has been achieved in recent yeai-s. But
my Govermnent believes that much remains to
bo done and that the United Nations is the
forum in which such an effort should be made.

We have no desire to impose our own par-
ticular economic system on others. Every comi-
trj-, we recognize, must evolve its own economic
system according to its own needs, its traditions,

MARCH 11. 1968

367

and the realities that it faces. But we do believe
that the time has come for a new look at the
problem as a whole. We believe that it should be
possible through international agreement to
bring about a basic improvement in the legal
environment for private investment in the de-
veloping coimtries, which could quicken the flow
of private resources mto development.

We are willing to do our full part in such an
effort.

Mr. President, our agenda deals with issues
to which my Government attaches great im-
portance. We felt it necessary to indicate our
basic approach to the problems of this Confer-
ence and to comment on some of the pnncipal
issues before us.

AJl of us here know that the nations repre-
sented here are divided on many problems and
represent different ideologies, different educa-
tional experiences, different interests. We are
united, however, in our loyalty to the Charter
of the United Nations and in our deteiTnination
to assist the developing countries in their drive
for more rapid economic growth. If our delib-
erations are guided by these two central ideas,
if we pursue our work in a spirit of cooperation
and realism, my Government believes we can
make a major contribution to the welfare of the
developing countries and therefore of the world
commmiity as a whole.

To this end, Mr. President, I have the
privilege of pledging the best efforts of the Gov-
ernment of the United States.

matic relations concerning the compulsory settlement
of disputes. Done at Vienna April 18, 1961. Entered
into force April 24, 19&1.^
Accession deposited: Guinea, January 10, 1968.

Disputes

Convention on the settlement of investment disputes
between states and nationals of other states. Done
at Washington March 18, 1965. Entered into force
October 14, 1966. TIAS 6090.
Signature: Indonesia, February 16, 1968.

Marriage

Convention on consent to marriage, minimum age for
marriage and registration of marriages. Done at
New York December 10, 1962. Entered into force
December 9, 1964.'
Accession deposited: Tunisia, January 24, 1968.

United Nations

Amendment to article 109 of the Charter of the United
Nations. Adopted at New York December 20, 1965."
Ratifications deposited: Guyana, January 31, 1968;
Ivory Coast, January 1.5, 1968; Madagascar, Jan-
uary 23, 1908; SieiTa Leone, January 24, 1968.

Women — Political Rights

Convention on the political rights of women. Done at
New York March 31, 1953. Entered into force July 7,
1954.'

Accession deposited: Tunisia (with a reservation),
January 24, 1968.

BILATERAL

Mexico

Agreement amending the air transport agreement of
August 15, 1960, as extended and supplemented
(TIAS 4675, 5647, 5897). Done at Mexico Septem-
ber 19, 1967. Entered into force provisionally Sep-
tember 19, 1967.
Entry into force: February 6, 1968.

TREATY INFORMATION

Current Actions

DEPARTMENT AND FOREIGN SERVICE

MULTILATERAL

Diplomatic Relations

Convention on diplomatic relations. Done at Vienna
AprU 18, 1961. Entered into force April 24, 1964.'
Ratifications deposited: Bulgaria, January 17, 1968 ; "

Cliile, January 9, 1968.
Accession deposited: Guinea, January 10, 1968.

Optional protocol to the Vienna convention on diplo-

Designations

Samuel L. King as Deputy Chief of Protocol, effec-
tive February 19. (For biographic details, see Depart-
ment of State press release dated February 19.)

' Not in force for the United States.
' With reservation and declaration.
' Not in force.

S68

DEPARTMENT OF STATE BULLETIN

INDEX March IL 1968 Vol LYIIL No. 1498

Department and Foreign Service. Designations

(King) 368

Developing Countries. From Aid to Cooperatiou :
Development Strategy for the Next Decade
(Rostow) 359

Economic Affairs. From Aid to Cooperation :
Development Strategy for the Next Decade
(Rostow) 359

Europe. President Johnson Confers With NATO

Secretary General CWTiite House statement) . 350

Korea. Department ReaflBrms Statement on

Treatment of Pueblo Crew 356

President Johnson's News Conference of Feb-
ruary 16 (excerpts) 341

Secretary Rusk Interviewed by College Editors

(transcript) 346

Mr. Vance Completes Special Mission to Korea
for President Johnson (Vance, U.S.-Korean
joint communique) 344

Military Affairs. Department Reaffirms State-
ment on Treatment of Pueblo Crew .... 356

Secretary Rusk Commends Actions of Marine
Security Guards at American Embassy in
Saigon 357

N'orth Atlantic Treaty Organization. President
Johnson Confers With NATO Secretary Gen-
eral (White House statement) 350

Presidential Documents. President Johnson's
News Conference of February 16 (excerpts) . 341

Trade. From Aid to Cooperation : Development

Strategy for the Next Decade (Rostow) . . 359

Treaty Information. Current Actions .... 368

United Nations. From Aid to Cooperation : De-
velopment Strategy for the Next Decade
(Rostow) 359

President Johnson's News Conference of Feb-
ruary 16 (excerpts) 341

U.N. Secretary-General U Thant Meets With

President Johnson (White House .statement) . 343

Viet-Nam. President Johnson's News Conference
of February 16 (excerpts) 341

Secretary Rusk Commends Actions of Marine
Security Guards at American Embassy in
Saigon 357

Secretary Rusk Interviewed by College Editors

(transcript) 346

U.N. Secretary-General U Thant Meets With
President Johnson (White House .statement) . 343

Name Indeao

Brosio, Manlio 356

Johnson, President 341, 343, 356

King, Samuel L 368

Rostow, Eugene V 359

Rusk, Secretary 346, 357

U Thant 343

Vance, Cyrus R 344

Check List of Department of State
Press Releases: February 19-25

Press releases may be obtained from the Office
of News, Department of State, Washington, D.C.
20520.

Releases issued prior to February 19 which
appear in this issue of the Bi;lletin are Nos. 24
and 26 of February 6.

No. Date

Subject

t36 2/20 Linowitz : 2d International Confer-
ence on the War on Hunger.
Washington.

ta" 2/21 SolouKiii : "United States Policy To-
ward International Efforts To Im-
prove Conditions of Commoditv
Trade."

t38 2/20 Rostow : "National Security or a
Retreat to Isolation? The Choice
in Foreign Policy."

t39 2/23 U.S.-Japanese discussions on soft-
wood log trade concluded.

tHeld for a later issue of the Bulletin.

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washington, d.c. 20402

OFFICIAL BUSINESS

POSTAGE AND FEES PAID
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THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

OF

STATE

BULLETIN

THE WAR ON HUNGER

Address hy Vice President Humphrey 269
Address by Ambassador Linmoitz 372

ASSISTANT SECRETARY BUNDY INTERVIEAVED ON "MEET THE PRESS"

Transcript of Interview 378

UNITED STATES POLICY TOWARD INTERNATIONAL EFFORTS

TO IMPROVE CONDITIONS OF COMMODITY TRADE

by Assistant Secretary Solomon 387

For index see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1499
March 18, 1968

For sale by the Superintendent of Documents

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Washington, D.C. 20402

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Note: Contents of this publication are not
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STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed in
the Readers' Guide to Periodical Literature.

The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
tvith information on developments in
the field of foreign relations and on
the work of the Department of State
and the Foreign Service.
The BULLETIN includes selected
press releases on foreign policy, issued
by the White House and the Depart-
ment, and statements and addresses
nuide by the President and by the
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of the Department, as ivell as special
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States is or may become a party
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The War on Hunger

The Second Intematioruil Conference on the
War 071 Hunger, sponsored by the Committee
on the World Food Crisis, was held at
Washington, D.C., on February 20. Folloioing
is an address made at the morning session by
Vice President Humphrey, together with an
address made at the closing banquet by Sol M.
Linowitz, U.S. Representative to the Organiza-
tion of American States.

ADDRESS BY VICE PRESIDENT HUMPHREY

This is a peace conference. We are here today
to talk about food — the key to peace, to security
and development, at home and abroad for every
nation.

For in a world where the majority of men stUl
lead a hand-to-mouth existence, where himger
and malnutrition still destroy mental and physi-
cal powei-s, where war, pestilence, and famine
still ride hand in hand, there can be neither real
security nor full development for any of us.

Our generation has already known better than
any other the prophecy of Isaiah : "And it shall
come to pass, that when they shall be hungry
they shall fret themselves, and curse their king
and their God."

And it is not difficult to imagine a nightmare
world in the future in which Thomas Malthus'
terrible prophecies will come true. Wliat is some-
times difficult to remember, however, amidst all
the grim statistics, is that the Malthusian trap
is not inescapable. It is within our power to
throw back the jaws of that trap — to make
decent nutrition, like sun and air, the birthright
of every human being.

We must constantly remind ourselves that
primitive technology, not inadequate food-
srowing potential, is responsible for starvation
yields in many countries today. Add a little fer-
tilizer, a little water, some improved seed, the
tools and tecliniques of modern agriculture to

the dust of those fields, and output increases
radically.

We must remember also that self-help efforts
in countries like India, Pakistan, and Taiwan, in
Latin America and Africa, are beginning to pay
off.

We now expect that the world will produce
more food grain this crop year than ever before
in man's history, not only because of good luck
or good weather but because of solid, tangible
progress in agriculture.

There is progress in family planning, too,
even though the rewards of that progress — a sig-
nificant downturn in the world birthrate — may
yet be a decade or more away. The amount of re-
sources now devoted to population planning, the
knowledge of contraceptive methods, and public
acceptance are at an alltime high. Today our
foreign assistance investment in family plan-
ning is 17 times what it was 5 years ago.

Finally, we must constantly remind ourselves
that it is not destiny, not any tragic inevitabil-
ity in the hmnan condition, but people like us
all around the world who will decide wliether
children bom this year grow up strong and
healthy or sick and hopeless.

Yes, there is reason to hope and, because of
it, more reason than ever for concerted decisive
action.

Wliat weapons are now at hand for our war
on hunger?

Food Aid to Developing Countries

Food. We and the other developed nations
capable of producing food beyond our own do-
mestic and commercial export needs have an in-
valuable resource, a resource which can buy time
while developing countries struggle to their own
feet agriculturally.

But food can be much more than a stopgap
palliative for famme.

In most developing economies it can be in-
vested, just like money, in capital improvements

MARCH 18, 1968

369

which in turn increase agricuUural self-
sufficiency.

Just 3 months ago, I visited a successful U.S.-
sponsored food-for-work project at Demak, In-
donesia, where irrigation tanks were being
cleaned and restored to use.

Some 450,000 tons of American food were in-
vested in that kind of project last year alone.

And food is the equivalent of hard cash for
development spending in coimtries where for-
eign exchange must ordinarily be spent for food
imports.

Our present Food for Freedom legislation is
designed specifically to serve those developmen-
tal objectives. It enables us to do much more
than simply release accidental surpluses when
the famine signal goes up.

We can now produce whatever is required to
meet developmental needs, over and above the
demands of our commercial market. However,
we must be sure that in the process we provide
a fair return to our own producers, to whom we
and the world owe so much.

But the war on hunger is not an exclusively
American challenge. It is a challenge shared by
all mankind, and all will suffer if it is not suc-
cessfully met.

We have therefore begun to work with the
other developed nations to establish a systematic
international food aid program.

That is the purpose of the food aid provisions
which were part of the Kennedy Round negotia-
tion and which are now before the Senate for
advice and consent to ratification.

The Food Aid Convention calls for 4.5 million
tons of grain to be supplied by the developed na-
tions each year, of which 1.9 million would come
from the United States. The major share would
be provided by other developed nations in grain
or cash equivalent, thus increasing commercial
demand. We hope to expand those quantities in
the futui-e.

The Food Aid Convention is accompanied by
a Wheat Trade Convention designed to assure
farmers m all participating nations better prices
for grain sold on the international market, prices
substantially higher than those specified in the
1962 Wlieat Agreement.

Tlie concept of an international food aid com-
pact was at first misunderstood in some devel-
oped countries, particularly those which have
food deficits themselves and therefore felt they
had nothing to contribute.

During my visit to Europe last spring, I made

every effort to impress upon the heads of state
with whom I met that all developed nations
not only had an obligation to give what they
could — if not food, then money — but that such
assistance would also serve to expand and sta-
bilize world markets.

I am proud to say we had some success.

Ratification of the Food Aid Convention will
be only a beginning — but a good beginning —
in setting a pattern for the future. It is a basis
from wliich international cooperation in the
war on hunger can be expanded, not only for the
benefit of the developing nations but as a means
of providing new markets and more price pro-
tection to farmers everywhere.

The OECD [Organization for Economic Co-
operation and Development] has considered ad-
ditional paths toward international cooperation
in the war on hunger, as have the members of
tWCTAD [United Nations Conference on
Trade and Development].

We look forward to the time in the future
when all developed nations, without regard for
ideology, will join with all developing nations
as full participants in similar food aid and tech-
nology' programs.

The time is here for a world without politics
when it comes to hunger.

So international cooperation is a second im-
portant tool.

Getting the New Technology to the Farmer

Next comes technology.

A very few years ago we thought most farm-
ers in the developing nations were hopelessly
conservative, bound to the techniques their fore-
fathers had used for literally thousands of
years.

Today, many of those same farmers have cre-
ated an insatiable demand for fertilizer and
improved seeds that has even caused black mar-
kets in agricultural inputs in some countries.

Farmers from Turkey to India this year har-
vested millions of acres of high-jdeld Mexican
wheat developed by the Rockefeller Foimdation,
a scant 3 years after its introduction.

Improved rice varieties developed at the In-
ternational Rice Research Institute in the Phil-
ippines are now being adapted for use in over
20 major rice-producing countries and promise
to triple or quadruple yields.

We can expect our laboratories and experi-
mental farms to offer more technological prog-

3T0

DEPARTMENT OF STATE BULLETIN

ress in the futiirp. But tlie real cliallciige before
us today is to get tlie benefits of what wo already
know into the hands of the farmers and the
mouths of their children.

That means extension work.

It means adaptin<x our past discoveries to the
needs of labor-intensive agriculture.

It means localized rural radio stations and in-
expensive transistor radios to carry the news of
improved techniques.

It means adequate, inexpensive credit, easily
obtained.

It means incentive returns to the farmer to
break the cycle of toil and poverty that is the
essence of agricultural backwardness.

Role of the Private Sector

Now, let me say a word about the pnvafe sec-
tor as a weapon in the war on hunger.

Agriculture is a private enterprise in Amer-
ica. So is the production of fertilizer, pesticides,
farm implements. So are our thriving farm
cooperatives.

Even the development and dissemination of
new technology, once the exclusive preserve of
our land-grant colleges and our extension
services, is increasingly being taken over by the
private sector. Today fully half of all U.S. agri-
cultural research is financed and conducted by
private firms.

Private promotional efforts deserve a lot of
the credit for keeping American agriculture
progressive and the envy of other nations.

So when we talk about the agricultural re-
sources America has to offer to the world, those
independent farmers, those cooperatives, and
those booming new agribusinesses must be
counted as leading assets.

Cooperatives and f oimdations, many of which
are represented here today, have already pro-
vided significant technical assistance.

Private industry has played the major role
in exporting commodities sold under P.L. 480,
and over 70 charitable organizations have
helped distribute American food abroad.

Needless to say, agricultural development will
mean economic development in general and a
growing market for commercial exports of food,
farm equipment, and agricultural chemicals.

American farmers today invest roughly $42
per acre in production supplies from the non-
farm sector each year. Japanese farmers spend

more than that for chemicals alone. Farmers in
all developing nations will soon begin to rely
much more heavily on the products of
agribusiness.

I think the American free enterprise system
can tap that market — and help feed millions in
the process.

Self-Help the Most Critical Need

Finally, let me mention the most critical need
of all — self-help on the part of the developing
natioTis.

Some of them are already doing well. But
as George Woods, President of the World
Bank, said in New Delhi a week ago, many still
fail to grasp the terrible urgency of their
situation.

There is much more to do in all aspects of
economic development — in agriculture and fam-
ily planning, in land reform, m industrial de-
velopment and export promotion, in manage-
ment and maintenance of progress already
achieved.

There is more to do in shaking off dogmas
and doctrines that make good anticolonial rhet-
oric but bad development policy.

One of the most inhibiting of these is the out-
dated notion that foreign private investment
means exploitation. In the colonial era that was
surely tnie. But today a new breed of
capitalists — domesticated capitalists, if you
like — are ready to offer not exploitation but
jobs, management, production of exportable
goods, and progress.

There is, of course, more to national develop-
ment than progress in agriculture, as critical as
that progress is.

There must be education — to emancipate the
mind and release the human potential of every
human being.

There must be health care — to protect and
preserve the vitality of our God-given human
resources.

Without those three necessities of human de-
velopment, all the shiny factories and new
roads, the banks and bicycles, that are the usual
symbols of economic development become little
more than vainglorious monuments.

This is a time when the world's intentions for
its future are being sorely tested — on the battle-
field, in quiet Foreign Office corridors, in our
souls.

Nowhere is that test greater than on the dusty

MARCH 18, 1968

371

plots and in the humble villages on the front
lines of the war on hunger.

We know the dimensions of the battle. We
have the weapons to fight it. But do we — and
all others who are comfortable and prosperous —
have the will to make a small sacrifice today for
a peaceful tomorrow ?

Sometimes I fear that Gunnar Myrdal is
right— that we live on, "attending to the busi-
ness of the day without giving much thought to
the unthinkables ahead of us."

There is a bill before the United States Con-
gi-ess today to extend a P.L. 480 program which
is surely one of the most enlightened documents
in the bleak annals of international relations.

We must pass it.

There is also the President's request for a for-
eign aid authorization.^ Fully one-half of the
development aid in that request will be devoted
specifically to war on hunger.

We must pass it.

We have the chance to be remembered in his-
tory as the generation that finally decided to
make its commitment to security and develop-
ment for all mankind — and to make an adequate
diet the right of every child.

ADDRESS BY AMBASSADOR LINOWITZ

Press release 36 dated February 20

I want to begin my remarks here tonight by
congratulating you, the participants in this Sec-
ond International Conference on the War on
Himger. I congratulate you because from what I
have learned about your proceedings I believe I
say with complete accuracy that rarely has any
international conference — on any subject — had
the unanimity that marked yours today.

But rather than speak about "you," I want to
speak about "use" ; for I am both honored and
delighted to be a part of this conference. I am
gratified, then, that we have made considerable
progress in the war on himger here today, if only
by sharpening our focus on the many problems
involved in the long-range food and population
battle.

We have made appreciable progress in demon-
strating that we actually care about the depriva-
tions suffered by two-thirds of the human race.
We have examined some of the facets of the

' BciiETiN of Mar. 4, 1968, p. 322.

problem; we have discussed ways of using the
wealth and the talent and the ingenuity of the
American people — and indeed of all people — to
prevent hunger and suffering in the less devel-
oped world.

We have charted a course for future action
without sacrificing the need for flexibility in
planning for contingencies which are bound to
arise.

And perhaps most important of all, we have
spoken with a single voice.

It is apparent that this audience does not need
to be convinced. We all know what the problems
are, and we know the terrible penalty that our
coimtry — and the whole world — will pay if we :
fail to apply ourselves unstintingly to the prob- I
lems of the war on hunger. j

Our task now is to convince others, and this i
is no easy assignment. The trials and the con- ;
cerns of 1968 are pressing and immediate. How i
do you convince someone to worry about what i
may happen in the year 2000 when he feels he j
will be lucky if he makes it through 1968 ? i

Yet we must convince others to act on the ;
knowledge that we possess. We must do so by ,
sharing with them the knowledge that was so
evident here today. It is true that more and more |
people are becoming aware of the long-range !
battle to stem human hunger. But this mere i
awareness must be transformed into a resolve to |
do something about it in this time of paradox in
which we live, a time when we have learned to
achieve most and to fear most, when we seem
to know more about how to make war than
how to make peace, more about killing than we
do about living, a time when great achieve-
ments in science and technology are over-
shadowed by mcredible advances in instruments
of destruction.

It is a time when we recall the observation of
the late Justice Robert Jackson that we fear not
the primitive and ignorant man but the educated
and technically competent who has it in his
power to destroy the earth. We are at a time
when we can send men aloft to walk the sky yet
recall Santayana's frighteningly timely words
that men have come to power who "having no
stomach for the ultimate bun'ow themselves
downward toward the primitive."

In such a world and at such a time, we must;
determine what we can do to move mankind to-
ward peace and plenty, how we can both attain!
and share in the great social opportimities of

372

DEPABTMENT OF STATE BtTLLETIN

our lifetime. Tliere is no escape from facing
front and askino; tlie hard questions. We can only
choose where we can best take our stand — a
stand that becomes increasingly urgent as the
chasm steadily widens between the "haves" and
the hundreds of millions of "have-nots" in the
developing world.

Hunger a Threat to the Peace

The gap between the so-called "developed
north" and the "underdeveloped south" has been
described by Barbara Ward as "inevitably the
most tragic and urgent problem of our day."
The tragedy is in the economic despair and emp-
tiness that marks the lives of all too many in
the developing countries; the urgency is in pre-
venting a political reaction — a reaction that has
already begun — that could be, and is, damaging
international peace and security.

Our nation learned a century ago that it could
not live half slave and half free. We are learning
today that our world caimot live on any such
basis either — more than half himgry and only
the minority nourished. There is no security
for anyone in such a world of injustice and
resentment, a world in which the future balance
of power will ultimately be decided by men and
women who now go to bed hungry and awaken
to a new day of malnutrition and the pangs of
slow starvation.

Not so long ago we could talk about them in
comfort as a sociological phenomenon, people
who required our sympathy and even our char-
ity; but they were far away and lacked the
immediacy of proximity. They lack it no longer.
Science and teclinology have stripped away our
comfort now as surely as they have stripped
away the mysteries and the defenses of time
and distance.

They are no longer far off in some God-
forsaken jungle or even more God-forsaken slum
of civilization ; they are a transistor's length
away right down the runway. They know that
we all share this planet; yet while we of the
developed world share its benefits and rich years
they share its depreviations and lean years.

Let's take a moment to look at them — not in
millions or billions but in microcosm. Here they
are:

During the next 60 seconds 200 human beings
will be born on this earth. One hundred and
I sixty of them will be colored — black, brown,

yellow, red. About half will be dead before they
are a year old. Of those who survive, approxi-
mately half will be dead before they reach their
16th birthdays. The survivors who live past 16
will have a life expectancy of about 30 years.
They will be hungry, tired, sick most of their
lives. Only a few of them will learn to read or
write. They will till the soil, working for land-
lords, living in tents or mud huts. They— as
their fathers before them — will lie naked under
the open skies of Asia, Africa, and Latin
America, waiting, watching, hopmg — starving.

These are our fellow himian laeings, our
neighbors, if you will. Is it any wonder that
despair and revolt at hunger, envy and even
anger over the inequality of life, is the most
urgent political and economic fact of our day ?

If one thing is clear, it is that we must find
answers, not by denying their existence or by
permitting our interest in them and their prob-
lems to swing from too much to too little and
back again. For that is the way to disaster, and
if we would avoid it we must master our
ambivalence or it will master us.

We have now learned there is no such thing
any longer as a separated or isolated area of
concern ; that what threatens peace and stability
in one part of the world, in Latin America, the
Middle East, or Southeast Asia, threatens peace
and stability everywhere.

Above all, perhaps we have learned that hun-
ger is a threat to the peace : the hunger caused by
insufficient food ; the hunger of insufficient op-
portunity; the hunger of insufficient develop-
ment; the hiuiger of insufficient hopes.

U.S. Foreign Aid Programs

Eaiowing this, don't we have to ask ourselves
again: "What is our proper role?" Don't we
have to take another hard look at our foreign
aid program ? Can we afford the luxury of turn-
ing away from a program that has shown itself
to be the most effective public policy yet devised
not only to help conquer world hunger but to
encourage economic growth and self-sufficiency
in the recipient nations ?

I ask tliis question because, with all its obvious
urgency, Americans have always suffered a
dichotomy of attitude on the subject of foreign
aid. You may remember that at the time our
Founding Fathers were putting together the
Constitution, Benjamin Franklin asked that the

373

sessions of the Constitutional Convention be
started with a prayer each day invoking divine
guidance upon the deliberations, but Alexander
Hamilton protested. The Constitutional Con-
vention, he insisted, was not in need of "foreign
aid."

This spirit of Alexander Hamilton is very
much with us in 1968. For, nearly two centuries
later, foreign aid is still suspect in all too many
quarters.

Yet for every impediment and criticism tossed
at it, there is also an appreciation and under-
standing of its importance. In 1946, a time when
the world was still emerging from the carnage
of World War II, and before the inauguration
of the Marshall Plan, Pope Pius XII foresaw
the direction this country would take toward re-
buildmg world society. "The American people,"
the Pope declared, "have a genius for splendid
and unselfish action, and into the hands of
America God has placed the destinies of afflicted
humanity."

And our last four Presidents, of both parties,
Presidents Truman, Eisenliower, Kennedy, and
Johnson, have all vigorously supported foreign
aid. Every Secretary of State has backed foreign
aid. Every Congress since the end of the Second
World War has approved a foreign aid pro-
gram, although unfortunately in steadily lessen-
ing amounts. So despite all the outcries against
wastefulness and inefficiency— and there is need
for concern and most careful scrutiny — there
must be a good reason for foreign aid; despite
repeated attempts to stifle the program in its
entirety, it must be doing something right.

For example, that remarkable experiment,
the Marshall Plan, not only set Europe back on
its feet, but it was the first step in the long
process of proving to the Russians tlie over-
riding and exemplary strength of the market
economy. It was a process which, incidentally,
has now not only stabilized Western Europe but
is carrying the consumer goods revolution right
into Russia itself. And Europe, which not too
long ago was on tlie receiving end of aid, now
is a source of aid itself to tlie less developed
world, an international Horatio Alger stoiy
with a moral that points up both the value and
the success of our aid policy in raising the living
standards through economic development.

Yet there is still too much confusion and mis-
understanding about just how much of the
United States tax dollar goes into foreign aid.

Let me clarify some facts : We devote only one-
half of one percent of our gross national prod-
uct to foreign assistance. By comparison, the
United States allocated twice as much for for-
eign aid — $7.2 billion — in 1949, despite the fact
that our gross national product then was one-
third of wliat it is today.

To a very large extent, these funds are avail-
able in the form of loans which recipient nations
repay with interest. In fiscal year 1967, for ex-
ample, 49 percent of all foreign aid funds went
for loans. And not to be overlooked is another
factor: that our assistance also takes the form
of technical cooperation, by which we send
skilled professionals overseas to share their
knowledge and experience with their comiter-
parts in developing nations. If this tecluiical as-
sistance is to be regarded as giving, then clearly
it is the giving of a helping hand, literally. And
the dollars spent are, in most cases, paid to
American citizens.

Obviously the United States cannot and
should not do the whole foreign aid job alone.
We cannot be the stacker of wheat or the hog
butcher for the whole world. Neither can we be
the head banker, the chief engineer, the solitary
policeman, the lonely Sir Galahad out to save
civilization. We cannot, we dare not, undertake
to play God. But we can continue doing what is
right and necessary for us to do: our just part
to assure that the prisoners of hunger, of pov-
erty, of discrunination, come out of the long
shadow of social and economic injustice; that
they share in the benefits of modern medicine ;
that they get better schooling; that they get
enough to eat and become full partners in prog-
ress and full citizens of the world.

Even under tlie best of conditions, however,
and as the needs of the developing world keep
mushi'ooming, we can no longer fail to face up
to the fact that we must reach more funda-
mental decisions than just how many billions of
dollars' wortli of assistance we are prepared to
make available.

Indeed, no matter how much or how little
money is appropriated by Congress from year
to year for our foreign aid commitments, it is
still far too little to accomplish the overall de-
sirable objective of helping the countries of
Asia, Africa, and Latin America help them-
selves to achieve full economic self-support. If
this objective is to be realized, I believe, private
capital must join hands with our Federal Gov-

374

DEPARTMENT OF STATE BtJIAETIN

J

ernmont to make the imjiact of foreign aid more
meaningful and more realistic.

Former President Dwight Eisenhower once
said that the main problem of our foreign aid
program is that it "lacked a constituency." I
believe this is no longer entirely true. I think
that the problem today is that the constituency
is incomplete. Since the orientation of the for-
eign aid program under the Marshall Plan, it
has moved toward economic development rather
tlian reconstruction and rearmament; and this
requires a much greater degi-ee of long-term
investment.

It requires, I believe, the deeper involvement
of America's business and labor communities,
and those who have confidence in them, to act
on the conviction that the economic growth of
developing nations is a necessity to the United
States and therefore to them. Their added sup-
port is vital if foreign aid is to achieve a pri-
mary goal of encouraging international free
enterprise in which the developing nations take
their rightful places in the world's markets.

Foreign Aid and Long-Range Security

In evaluating foreign aid it is important that
we also understand its Ibnitations. It is not a
means of buying allies or lifelong friendships
for the United States ; nor is it an effort to cre-
ate a miiversal pax Americana. Critics who
claim that it does not purchase the friendship
of the recipient nations therefore are exactly
right. It was never intended that it should. The
loyalty and gratitude of sovereign nations is not
for sale — or purchase.
|! What are we purchasing with our aid dollars,
then?

President Jolinson answered that question in
his budget message last month ^ when he re-
quested the Congress to appropriate $2.5 billion
in new obligational authority during fiscal year
1969 for economic assistance to the needy world :

Tlirijugh its international programs the United
States seeks to promote a peaceful world community in
which all nations can devote their energies toward im-
proving the lives of their citizens. We dhare with all
governments, particularly those of the developed na-
I tions, responsibility for mailing progress toward these
goals.

In the light of the work to be done, I can but

' For excerpts, see tftiV?., Feb. 19. 19G8, p. 245.

hope the Congress will heed the President's re-
quest. It is a minimal request. It is an urgent re-
quest. At stake is the bettering of the hiunan
condition. At stake is the long-range security of
the United States — a security that no less than
the security of democracy itself depends upon a
viable community of free developing nations
with strong, independent economies.

New Ways of Thinking Required

But if we would speed the growth of tliis
community, we must also speed changes in our
own ways of thinking, changes perhaps, in our
traditional methods of diplomacy.

Our thinking must recognize that, even in a
day of "wonder drugs," "mstant relief," and
"miracle cures" we are dealing with nations
which, economically speaking, are still centuries
behind the times.

It must recognize that foreign aid, as we
know, is not limited to development alone. There
are the immediate problems which concern
us deeply liere: the problems of food and
population.

And if we are to survive the population-food
crisis, we must think not in traditional diplo-
matic terms of influence and power but in terms
of fertilizer, new seed varieties, irrigation, pes-
ticides, family plamiing, protein eni'icliment of
diets, improved health and hygiene, farm-to-
market roads, improved crop yields, bigger and
better catches of fish. We must think in terms of
education for the illiterate, credit for farmers so
they can purchase needed farm inputs, vastly
enlarged child-feeding programs.

Every 10 to 15 years our store of scientific and
technological knowledge doubles. Unfortu-
nately, we cannot say the same thmg for himian
wisdom. And the difference between what is
technologically feasible and what is i)olitically
possible may spell the difference between world
plenty and mass starvation.

As of now, in 1968, the United States and the
other developed nations possess the knowledge
and the teclinology to solve the food-population
gap. They can, at some sacrifice, amass the capi-
tal required to solve it.

But the big question remains : Have we — and
the other developed and aflBuent nations — the
will and the tenacity and the courage it will take
to do so ?

Are we up to waging this war on hunger in

MARCH IS, 1968

375

tlie knowledge that it will be long and costly ?
Do we understand there is no guarantee that
it will wia friends or influence people; that it
may very well, in fact, win us short-term criti-
cism and rancor? And do we imderstand that
if the war on hunger can be won, the human
race can survive on tliis planet — and that is a
goal worth striving for?

Happily, the prospects for averting serious
famine and human tragedy are brighter than
they were even a year ago. As you have heard
here, new food products of high protein content
have been develoijed. New strains of rice, wheat,
and corn have greatly increased the food-pro-
ducing ability of land in several of the emerg-
ing nations. Intensive famDy planning pro-
grams have been inaugurated in 26 developing
nations, and 30 more are prepared to start
similar programs or have them under serious
consideration. Worldwide grain forecasts indi-
cate that the United States and the other food-
abundant nations will have the capacity for
preventing widespread himger at least until
1980.

We are, furthermore, on the right track. We
have learned much in the past 20 years. We
know what works, and equally important, we
know what won't work. We have seen the ex-
citing progress made by coimtries which have
"graduated" from the need for assistance from
the United States and are now well on the road
to economic self-sufficiency. Above all, in the
last 20 years we have learned patience.

We have sometliing else, too. Call it freedom,
call it capitalism, call it the American way, call
it the profit motive — the name isn't important.
What is important is that it works.

We have wrought something of an economic
miracle in this country over the last century in
agricultural production. We feed 200 million
Americans and 700 million other people around
the world from the abundance of our farmlands,
with a mere 6 percent of our people. The world
has never seen its like.

Alfred North Wliitehead has observed that
"the vigor of civilized societies is preserved by
the widespread sense that high aims are worth-
while. Vigorous societies harbor a certain ex-
travagance of objectives, so that men wander
beyond the safe provisions of personal gratifica-
tions."

In our concentration on the war on hunger,
in all our foreign aid programs, we do have high

aims. And possibly, when we say that our task
is to revolutionize agriculture tliroughout the
developing world and to help the effort to deal
with rapidly growing population rates, we are
being extravagant in our objectives.

For we are faced with the biggest manage-
ment job in history. Economic management on
a global scale is the problem of channeling capi-
tal into plants to make fertilizer to exploit the
newly developed strains of rice and wheat and
corn. It means tailoring research to fit local situ-
ations. And it is the problem of containing
human fertility within the framework of
orderly growth.

We must therefore continue our programs of
food aid to the underdeveloped nations until
their economies become stronger. We must press
forward diligently in modernizing agricultural
practices in the needy nations. We must help in
the effort to attain wider acceptance of family
planning programs in those countries where
population growth overwhelms every advance
in the economy.

U.S. Sense of Political and Social Justice

And most importantly, we must demonstrate
our dedication, our willingness to support un-
stintingly and imceasingly the battle against
mankind's ancient enemies, hunger, poverty,
disease, ignorance, and despair — the battle
against the starvation, the lack of opportunity,
the brute conditions of life that we know must be
changed for the sake of us all. For in this mini-
world of giant extremes in living standards, we
dare not forget that "the poorest he hath a
life to live as the greatest he."

That we have done so in the past spontane-
ously, as a natural reaction to tlie needs of our
neighbors, is not only recorded history; it is a
living policy, a basic philosophy that has guided
the United States since World War II. It is
philosophy that speaks clearly and unmistak-
ably of America's desire for a peaceful world,
one governed by the rule of law, one in which
every man can live in dignity. It is this desire —
one that has shaped American foreign policy
for a quarter of a century — that now motivates
President Johnson's policy in helping the under-
developed world catch up with the 20th century.

And this fact adds, I believe, an essential in-
gredient to all the dissent and debate we hear
today about American foreign policy. It tells

376

DEPAKTMENT OF STATE BUUJSTIN

us truly and accurately the kind of nation we
are and what we are about: a nation possessed
with a sense of political and social justice un-
matched in human history.

And I would go further, too, and say that
United States policy in fighting the war on
hunger — in every aspect of our foreign aid —
is nothing less than an expression of national
dissent and protest : dissent with the inequalities
of the status quo and protest against the harsh
cruelties of underdevelopment, a protest that
will affirm and indeed utilize the tools, the pro-
cedures, and the resources we possess to help
abolish poverty and injustice in all their forms.
It is a protest in which I would ask all Ameri-
cans to join their Government.

I ask them to protest as individuals properly
dissatisfied with the human condition and seek-
ing to improve it.

I ask them to protest against having two-
thirds of humanity lead lives that are "nasty,
brutish, and short."

I ask them to protest against the disease and
illiteracy that affect the overwhelming mass of
people.

I ask them to protest against the hovels in
which millions of himian beings are compelled
to live.

I ask them to protest against the lack of op-
portunity and hope which confronts the millions
on this earth.

I ask them to protest against the malnutrition
that is slowly starving at least one-fourth of
humanity, against babies being bom retarded

because mothers were starving during their
pregnancy.

I ask them to protest against life as usual in
the face of imspeakable human tragedy.

There is no simple answer, no magic formula
that will in a blazing flash right all wi-ongs.
But if we can spark a constructive program for
the future — if you will, assert a protest that will
build creatively for the future — then we may
help prevent any future Viet-Nams and, indeed,
make them anachronisms of history. For our
success will show that peaceful revolution,
peaceful change, can be the key to the future.

It can also be our answer to all the preachers
of hate and violence, to all who fear becoming
a good neighbor to the man in Latin America,
in Africa, in Asia — or in Harlem, Watts, New-
ark, or Detroit — to all who blindly seek shelter
in a world that no longer exists. In short, it is
our answer to all who want to stop the world
and get off. It is our answer that we want to
stay on and that we know the best way of doing
so is to become a vital part of the world and
add our own contribution toward making it a
little better, toward showing that we really
mean what we say when we talk about the im-
portance of democratic institutions as the an-
swer to the challenge of our age.

This way we can prove our willingness to ac-
cept the charge of history and meet our respon-
sibilities with the imagination and compassion
befitting the wealthiest and most powerful na-
tion on earth.

And we can do it.

377

Assistant Secretary Bundy Interviewed on "Meet the Press"

Following is the transcript of an interview
with William P. Bundy, Assistant Secretary
for East Asian and Pacific Affairs, on the
National Broadcasting Com,pany''8 television
and radio -program '■'■Meet the Press" on Fehni-
ary 25. Interviewing Mr. Bv/ndy were John
Hightoiver of the Associated Press, Joseph
Kraft of the Publishers Newspaper Syndicate,
Peter Lisagor of the Chicago Daily News,
James Eohinson of NBC News, and Edwin
Newman of NBC Neios, moderator.

Mr. Rohinson: Mr. Bundy, the United Na-
tions Secretary-General, U Thant, urges this
Government to accept Hanoi's good faith that
negotiations would begin nearly immediately
if the bombing were to stop. How do you inter-
pret this?

Mr. Bv/ndy: Well, I think the key to our
position remains what the President said at San
Antonio.^ We, of course, are very interested in
what U Thant has reported ; and what he said
in his statement conforms to what he told us,
and it does not meet the San Antonio formula.
He has the impression that they would act in
good faith and that the talks would be mean-
ingful. We have no useful response from Hanoi
on several elements in the President's San An-
tonio statement, and I think we are bound to
ask whether they really mean to respond to
those points ; and we have liad a serious channel
of communication which hasn't produced any-
thing serious at this point.

Mr. Rohinson: Well, do you think North
Viet-Nam is starting a propaganda — is tliis
purely propaganda on Hanoi's part, these ini-
tiatives toward negotiations?

Mr. Bundy : I think there is a heavy element
of that. I am bound to conclude that as a long-

' For an address by President Johnson made at San
Antonio, Tex., on Sept. 29, 1967, see Bulletin of
Oct. 23, 1967, p. .519.

time watcher in this sphere. When you see a
public interview — in this case their Foreign
Minister had an interview on February 8, and
thereafter we have been getting the substance
of that interview through a whole series of
foreign governments whom they have ap-
proached. Now, that is not the way you do
serious business in diplomacy. You do serious
business quietly and through, usually, a single
channel that both sides have put some trust in,
and that is what we were doing during January
before this major offensive on the other side's
part.

Mr. Rohinson: Do you still have channels,
diplomatic channels, with Hanoi?

Mr. Bundy: Yes, we do. Tlie channels remain
in existence. At the moment nothing is coming
on them.

Mr. Rohinson : Mr. Bundy, one thing I should
like clarified : Could this Government possibly
negotiate with the National Liberation Front,
recognizing it as a separate entity from Hanoi ?

Mr. Bundy : Well, our view is very clear that
the National Liberation Front, as an organiza-
tion, is controlled from Hanoi ; and you see to-
day that the order for this offensive was the New
Year's greeting of Chairman Ho— an order for
an all-out attack. In other words, the direction
of this whole operation is undoubtedly in Hanoi,
and that is pretty basic.

Now, what we have said is : In the negotiating
setting we could visualize some way for the
NLF to be heard from and present its views.
But you can't regard it as an organization, as
an independent entity. It is just contrary to
fact.

Mr. Lisagor: Mr. Bundy, Senator [J. W.]
Fulbright and several of his colleagues on the
Foreign Relations Committee seem to feel now
that they were misled by the administration's
accomit of events in the Gulf of Tonkin in Au-
gust 1964. You had a hand, quite a hand I would

378

DEPARTMENT OF STATE BTJIXETIN

judge, in the writing of that or the proposal
for a Tonkin resohition.^ Were you clear at the
time in your own mind about those events?

Mr. Bundy: Yes, entirely clear, Mr. Lisagor.

Incidentally, I didn't have a hand in the writ-
ing of the final resolution. I had worked on a
previous project, but it had no high-level con-
sideration at all — purely as a contingency. And
we started from scratch after these attacks, on
the question of a resolution.

But the key points are, did the attacks take
place, and I think there is absolutely no doubt,
first as to the attack on August 2 and then, fol-
lowing the very clear and strong warning that
President Jolmson sent, the second attack on
August 4. We knew that, we knew it the day
that we were working on the question of re-
taliatory action. We knew it from sources that
have now been revealed to the committee, and I
think it is beyond all doubt.

Now, the other question that seems to be on
the mind of Senator Fulbright and other mem-
bers of tlie committee is whether there was any-
thing in tlie activity of the two destroyers, the
Maddox and the Turner Joy, that could have
been considered in any way provocative; and
there I thiiik the facts as made public at the
time remain the facts. Basically, those two de-
stroyers were on a patrol, partly to observe
North Vietnamese naval craft that were, as we
believed and we now know, active in escorting
infiltration boats and so on to the South, partly
to pick up information on the electronic situa-
tion in Xorth Viet-Nam. Now, that can't be con-
strued as a provocative action ; and that mission,
incidentally, of visual and electronic reconnais-
sance was fully disclosed to the committees and
to the Congress at the time. The two vessels
were well off shore. They were way away from
the entirely separate — entirely separate — South
Vietnamese activity against some of the bases
that were being used for infiltration against
them, and Senator Fulbright said at the time
that he regarded that as an entirely justified
activity by the South Vietnamese.

I don't think you can see any essential change
whatever in the factual picture as it was pre-
sented to the Congress. If you regard this kind
of reconnaissance as provocative, all I can say
is it is being done against us every day all around
our coasts. We have done it in many other parts

- For background and test of H.J. Res. 1145, see i6J<f.,
Aug. 24, 10C)4, p. 258.

of the world, simply in order to get information
that might at some future time become
necessary.

Mr. Lisagor: Mr. Bundy, a good many people
interpret these hearings, and Mr. McNamara's
[Secretary of Defense Robert S. McNamara]
testimony before this committee, as meaning
that perhaps we went into this war in the deeper
way we are now in it for reasons which were
not entirely valid, so I'd like to ask you this
question in light of that: Would the situation
in Viet-Nam be any different in your judgment
today if there had not been a Gulf of Tonkin
resolution?

Mr. Bundy : I would say broadly now I think
the Gulf of Tonkin resolution was a justified
response of the Congress and the President,
worked out in consultation between the two,
to the fact that these attacks took place in the
circumstances they did, essentially, as I regard
them — unprovoked and in fully disclosed cir-
cumstances at the time.

Now, that was an important affirmation of
the view of the Congress which, in its first part,
discussed the question of further retaliation if
other incidents of the type took place, bat in
the second part — and fully worked out with the
Congress — stated a basic policy view that it was
of vital importance to this nation to defend
South Viet-Nam and that that might include
the use of force.

Now, I think that was a very important event.
It didn't stop the North Vietnamese from com-
ing, and I think what you have got to look at
all the time is that the North Vietnamese have
been determined to get this objective. They
were proceeding at that very time in '64 to start
up the infiltration of regular units, following on
the ones they had been sending before, which
were originally South Vietnamese who had gone
north; and I don't know that it would have
made any basic difference, Mr. Lisagor.

Major Step-Up and Change of Enemy Strategy

Mr. Kraft: Mr. Bundy, we seem to be on the
verge of a new input, a new increase of xVmer-
ican military effort in Viet-Nam. In the past
these increases on our part have always been
matched — indeed, more than matched — by ef-
foi'ts on the part of the other side. Is there any
reason to think that that pattern won't be
repeated now ?

Mr. Bundy: Well, let me say I don't want to

MARCH 18, 1968

379

speculate on what more we may have to do.
What you are dealing with at the present time —
it is now becoming more and more clear, in the
analysis of people who followed what they have
been saying and can put it together in the light
of events, and in the light of some of the inter-
rogations we are getting — you have a major
step-up and change of strategy on the other side
which probably dates, I would think, from last
summer. The interrogations indicate that about
that time they concluded that they were losing
as they were doing, and there may have been
some high-level disputes about it — the evidence
isn't altogether clear on that — but they decided
that they had to make a major push, which they
targeted, what they called the winter-spring
offensive. To do that, they have sent down a
great deal more equipment, a gi-eat many more
North Vietnamese men, and they have brought
the local Viet Cong up to concert pitch by bring-
ing in every man they could get into their units,
and that is what you are faced with.

Now, on your question "if," and I say "if"
because I don't know what the need will be —
that is what General Wlieeler [Gen. Earle G.
Wheeler, Chaii-man of the Joint Chiefs of Staff]
is out there for now — and of course we will be
studying this with care ; but if we do do more,
it has got to be adequate to meet this change in
their basic strategy.

Now, the element that I think cuts the other
way on what you are suggesting is that there
is a good deal of indication that they are push-
ing hard for some kind of a real victory or a
major position of strength in the course of the
next 2 to 4 months, something of that sort.

You saw the analysis by Douglas Pike, who
is a really very good and impartial expert on
their whole tactics and strategy ; and I would
be inclined to go with him that they are push-
ing for at least something of a climax in the next
few months, and I think that is the way you
have got to look at it.

Mr. Kraft: Would you expect that if this ef-
fort on their part is successfully resisted that
at that point the climate would become suitable
for negotiations ?

Mr. Bnruly: It might. It might. We certainly
will be keeping our ears open. At the moment
we are not persuaded that they are engaged in
anything more than a propaganda effort to de-
pict themselves as interested in peace. We don't
see in the total pattern of what they are doing,
plus their lack of response on the San Antonio

elements, any picture other than that they are
determined to force the pace militarily at this
point.

Mr. Newman: Mr. Bundy, just for our own
record, you mentioned Douglas Pike. I think
you'd better identify him.

Mr. Bundy : Yes. Douglas Pike used to work
for the U.S. Information Agency in Saigon and
is the author of a major book on the Viet Cong.
He has written this analysis of strategy purely
as an individual. It appeared in the Washing-
ton Post today.

Hanoi's Response to San Antonio Formula

Mr. Hightower : Mr. Bundy, you said on sev-
eral elements of the President's San Antonio
formula the response from the North Viet-
namese had not been adequate, sufficient, or in-
teresting to you. What sort of elements are you
talking about? What is it the United States
wants to know from North Viet-Nam that would
substantially improve the prospects for
negotiations ?

Mr. Bundy: Well, the elements in the San
Antonio formula, as you know, Mr. Hightower,
are that stopping the bombing would lead to
prompt discussions with every reasonable hope
of being productive. Those were the basic two
points, and then we go on to say that we assume
that after the bombing stopped the other side
wouldn't take military advantage.

What you have got at the moment is that in
this interview they have said they would talk
as soon as the stopping of the bombing is con-
firmed. But they refuse to be pinned down on
that time. They seem to be playing a rather coy
game on that one.

As to whether the talks would be productive,
they still say, "We will talk about anything
either side might raise" ; and that certainly is at
least a partial response on that point.

On the question of their at least understand-
ing absolutely clearly our assumption that they
are not going to take militai-y advantage, they
insist that this is a condition and they again
and again say, "We reject that."

In other words, we are faced with a situa-
tion where if we were to stop the bombing
on the present diplomatic record, we would be
taking it utterly on faith as to whether they
would not do what their own doctrine says
they would do in similar circumstances, which
is to step it up to the maximum.

380

DEPAETMENT OP STATE BULLETIN

Mr. Hightower: In the light of the massing of
Communist troops around the area of Ivlie Sanh
and of the offensive wlxich was started at the
end of January, would it be fair to say that
the really critical element of what you are ask-
ing from Hanoi is some kind of an assurance
that they would in fact scale down the war
somewhat?

Mr. Bundy: No, we have talked in terms of
not taking advantage, as [Secretary of Defense-
designate] Clark Clifford put it in his con-
firmation hearing, not precluding their sending
down a normal, a reasonable, normal — whatever
there might be; it is hard to determine — level
of men and supplies. And there are other actions
that could be taking advantage, other than an
excess over the normal, and that is a good part
of it.

Let me say it is not only a question of their
not meeting the San Antonio formula. The San
Antonio formula lays down certain points
which certainly at the time it was stated might
have given us clear reason to hope that stopping
the bombing would produce discussions with
a real hope of moving toward peace.

Now, we are bound to take account at the
present moment of the fact that they are en-
gaged in a major offensive. We may be about
to see a second phase of it.

General [Vo Nguyen] Giap, the North Viet-
namese general, has made a major statement
saying "We will press on under the leadership
of Ho," and so on, and it simply doesn't look
at the present as though their interest was a
serious one in moving toward peace.

Situation After Tet Attacks

Mr. Hightower: General Giap also said in
his statement — I assume you refer to what he
said at the Soviet Embassy in Hanoi yester-
day?—

Mr. Bundy : That is correct.

Mr. Hightower : — said that his people had
won extremely great victories in both military
and political spheres in the South. Now, how
do you assess what has happened ? Tlaere is an
unidentified American official in Saigon who
was quoted as saying there had been a con-
siderable setback to the pacification program.
So what is in process here?

Mr. Bundy : I think you are in the middle of
a tough fight.

They inflicted a lot of damage in the cities.

they got into Hue and have now effectively been
driven out except for a few snipers — and that
is a major achievement — in a very tougli fight
that has just come through in the last 24 hours.
But they did cause a lot of damage. Tliey did
shake people's faith in the Government's ability
to maintain security in the cities, which hitherto
have been immune. And there have been about
a third of the Provinces where the protective
forces — mostly South Vietnamese — had to be
withdrawn to defend the cities ; and that is what
has caused this disruption of the pacification
program to a significant degree in about a third
of the coimtry and to some degree in another
third of the country, particularly in the delta
and in the northern areas, what we call First
Corps.

Now, that is the starting point of the balance
sheet. These are concrete results for which they
paid a very heavy price. About 40,000 is the
latest estimate of killed in action, and the weap-
ons figures — over 11,000 — seem to tally roughly
with that. Of coiu'se, it is an estimate.

Now, the real question at this point, as tliis
same briefing that you speak of on the pacifica-
tion thing pointed out, you've got this partial
vacuum in the coimtryside. If the Govenunent
can get out there aggressively and act and catch
the Viet Cong with their forces depleted, in
the open, then that could be a major plus. On
the other hand, if the Viet Cong are able to re-
cruit and so on — and there are some indications
this is what they are trying — it wouldn't be so
good.

And then the major questions also revolve
around the second phase. It is pretty clear they
are going to keep hitting. Maybe at Khe Sanh,
maybe in the northern cities, maybe in the cen-
tral highlands, Kontum, Pleiku, Dak To, maybe
down in the delta against some of the Province
capitals, maybe at Saigon itself.

Now, we are ready this time. There won't
be any repetition of the Tet letdown and the
wide assumption that they just wouldn't do it
in Tet. But there are just too many variables;
and another big one, of course, is whether the
Government takes hold, gets — galvanizes the
considerable elements of strength that it has
got: the fact that it stuck through this thing
and performed on the whole very well, the fact
that it's got much wider and more active popu-
lar support, this big coalition of political figures
that was annoimced last week, all the rest. There

MARCH 18, 1968

381

are too many variables at this point to say. I
can only say it is going to be a vei-y tough period.

Mr. RoUnson: I would like to get back to a
question I asked some time ago about the Na-
tional Liberation Front, which cannot help but
play a key role in any possible negotiations. I
would still like to know if this Government
would ever negotiate with the NLF, recognizing
it as a political entity on its own.

Mr. Bundy: I have given you the answer, Mr.
Eobinson. We have always said we could visu-
alize ways for them to present their views, but
an independent entity we do not believe them to
be. Now, the other side of that picture is the pos-
sibility that at some point — and President Thieu
has suggested this possibility — elements of the
NLF may be ready to talk to the Government
about assuming their role in the sense of a
peaceful acceptance of the Constitution in South
Viet-Nam. Now, that's the way to look at it,
I think. The organization is run from Hanoi.
There may be elements in it — and I have
said this often — that would prefer to be
genuine southerners in the crunch and to try
their luck politically ; and tliis is something that
the South Vietnamese have said they would wel-
come, and it is something we have said we would
welcome.

Pressures Elsewhere in East Asia

Mr. Rohinson: Mr. Bundy, to go further
afield, there are presently Communist military
pressures ranging from Burma to South Korea
— this would mclude Laos, Indonesia, the
Philippines, Thailand, the other countries in
Southeast Asia. Do you view this military pres-
sure as a coordinated master plan headed by
Peking or Moscow, or are these more nationalis-
tic uprisings?

Mr. Bundy: Weil, you sound as though there
were great things gohag on in all these areas,
which really isn't the case. You have got some
pressures against Burma; those are Chinese.
You have got distinct threats of significant at-
tacks in the southern areas of Laos; those are
North Vietnamese and probably in aid of im-
proving their supply routes so that they can
send more stuff down to South Viet-Nam.

You have got the North Koreans, who for 16
months have been engaged in this rising inci-
dent rate and terror and assassination and sabo-
tage. They are not getting an inch of public

support in the South by this straight terror
campaign. And of course the Pueblo seizure
ties into that. These are individual efforts. I
think there is a degree of helping the other fel-
low by causing some pressure, but I wouldn't
describe it as a single master plan.

Mr. Lisagor: Mr. Bundy, in your answer to
Mr. Hightower you seem to have left open the
question of whether the Viet Cong control much
of the countryside or not. You have talked about
a third of the Provinces having some kind of a
setback or being in a vacuum situation. Now, as
you know, Hanoi claims that the Viet Cong do
control large parts of the countryside. They
claim that the Saigon Government has com-
pletely broken down. Now, why don't we know
more about what is going on out in the village-
hamlet level than we seem to?

Mr. Bundy: Well, at this point we are getting
much more reporting, just within the last week,
Mr. Lisagor ; but you have had great difficulty
in getting around. There has been the job of
reconstruction. The other side is keeping up
these mortar attacks to make people nervous.
It has been hard to get aroimd ; but we are get-
ting a much fuller picture, and that is what tliis
briefing was based on.

Mr. Lisagor: Now, one other question in this
connection, Mr. Bundy : You spoke of the need
perhaps to fight and protect the cities and fight
and protect Khe Sanh and other places. Does
this not mean we are really fooling ourselves
about the military manpower that is going to
be necessary eventually in Viet-Nam? And let
me be more specific: It was once said to meet
all the things we would have to do, we would
need upward of a million men. Do you see us
coming to that point?

Mr. Bundy: Mr. Lisagor, I can't talk about
this field, because as I said in response to Mr.
Kraft, it is a matter we undoubtedly will be
looking at. General Wlieeler has been out there
to look at it, and I can't take it further than
that at this point.

Mr. Kraft: Mr. Bundy, in the San Antonio
formula, as I read it, the statement is that we
assume that the other side will not take advan-
tage of a cessation of the bombing. Now, you
are saying, and I think Secretary Rusk said
earlier, that we need some sign from the other
side that they won't take advantage of it. Isn't
that a step backward? Isn't that not assuming
it?

382

DEPARTMENT OP STATE BULLETIN

Mr. Biindy : Well, you've got to have a clear
picture of what they have in mind at any rate
in this regard. We are not saying anybody has
to sign on the dotted lines; but their insistence
that tliis is a condition — which it isn't — their
insistence on rejectmg it suggests very strongly
that they would saj', ''We are free to do any-
thing we want." Now, that is not an acceptable
condition. We just can't take this one on faith,
pure and simple.

Mr. Hightoicer: You have another very trou-
blesome problem in your area, Mr. Bundy : the
problem of the Pueblo. Wliat progress are you
making in negotiations to win the release of
the ship and the crew?

Mr. Bundy: Those talks are going on, and the
fact that they are going on and that issues are
being joined is, I think, ground for modest
hojae, ilr. Hightower. I think we have got to
pursue it a little while longer. I just don't know
how long this can go on, because obviously we
are very anxious that that ci'ew at least, and
the vessel also, be released. At this point I can
report no progress.

Mr. Hightower: There has been an increase
of tension in that whole area. Is there a serious
danger, as you see it, that the war might erupt
in Korea again?

Mr. Bundy: Well, if you are talking about
a major conventional thrust, I think the North

Koreans would be out of their minds to attempt
that. The military balance is strongly against
them, and I don't see any signs of the Chinese
acting with them in that sort of thing. I do
think you are going to see, or may see, more
incidents; and that is a significantly serious
situation in itself and one that we take very
seriously indeed.

Mr. Newman: I have to interrupt at this
point because our time is up. Thank you, Mr.
Bundy, for being with us today on "Meet the
Press."

U.S. Lifts Final Restrictions on Travel
to Middle East

Department Announcement

Press release 43 dated February 28

United States passports are now valid, with-
out special endorsement, for travel of United
States citizens to the Syrian Arab Republic.
With this announcement, effective today [Feb-
ruary 28] , all travel restrictions placed on coun-
tries in the Middle East as a result of the
June 1967 hostilities have been removed.

MARCH 18, 1968

383

Understanding in the Home Hemisphere

hy Covey T. Olwer

Assistant Secretary for Inter-American Affairs ^

I would like to outline some problems as to
understanding that we have in the home hemi-
sphere.

First, there is the need for mutuality in under-
standing. We should imderstand our neighbors
better ; they should understand us better. In this
connection, I believe our nearest neighbors to
the south know us very well. I do not believe
there is a group of leaders anywhere else in the
world who know our country and what makes
it go, and know our people and what makes
them act, any better than do our Mexican
friends. I only wish other Latin Americans
knew as much about us, and I hope that the
Mexicans can help t«ach them about us. How
useful it would be for living together in the
home hemisphere if a Mexican would analyze us
for Latin America in 1968 as perceptively and
wisely as Alexis de Tocqueville analyzed us in
1835!

There are other things that can and ought to
be done. We ought to be sure that Latin America
sees our society not as static, affluent, and
brusque but as evolving, challenged, and gener-
ous, as questing, experimenting, openminded,
and humanitarian. We ought to bring out little-
known facts about ourselves.

For example, I have imagined a documentary
film — a horror film, some may say — on the Big
Income Tax. I have the scenario in my mind,
but there is no time to go into that here. The
main point would be to explain North America's
tremendous engine of social justice, public wel-
fare, and development — including a little for
foreign development^-a machine that works

'Excerpts from an address made before the Pan
American Roundtable of Laredo at Laredo, Tex., on
Feb. 17. (For complete text, see press release 34.)'

and that this year will collect and redistribute
about $158 billion. Think of it: one himdred
fifty-eight thousand million dollars ! Talk about
peaceful revolution ! With us it began on March
1, 1913, before I was born, when the income tax
law was passed by a Democratic administration.
A film like this could do much to increase Latin
American understanding of what we have done
and what they may be able to adapt to their own
needs.

Pan- Americanism also stands for cultural un-
derstanding. . . .

Thanks to the meeting of the Presidents of
the Pan American countries at Punta del Este,
Uruguay, last April and to one of many fine
proposals made there by President Johnson,^
there is in session right now at Maracay, Vene-
zuela, a meeting of the Cultural Council of the
Organization of American States. I go there
from here. Out of that meeting, through mutual
financial and intellectual support, will come
great new advances in the improvement of edu-
cation and in the application of science and
technology to total development.

Just the other day I had one of the greatest
satisfactions of my life, as I stood to the right
of the President of the United States, amid the
Benito Juarez Scholars, brought to the United
States under a program initiated by President
Johnson and President Diaz Ordaz. Mr. John-
son spoke to them, with deep and sincere belief,
of the importance of educational exchange. . . .^

We are not doing enough for cultural ex-

' For statements by President Johnson and text of
the Declaration of the Presidents of America signed
at Punta del Este on Apr. 14, 1967, see Bulletin of
May 8, 1967, p. 706.

" For text of President Johnson's remarks, see White
House press release dated Feb. 9.

384

DEPARTMENT OF STATE BULLETIN

chan<ie. Our cultural affairs program in the
Government is always short of the money we
need to show the best that we have to offer. We
ouglit to do better as to Government support.
Meanwhile — and always, for Government
should never do it all — we need you and like-
minded groups throughout our society.

I come now to understanding the Alliance
for Progress. At Pimta del Este in 1961, follow-
ing President Keimedy's magnificent call that
in turn was based on what thoughtful and pur-
poseful Latin Americans had been ti-ying for
some time to get us to understand, tlie countries
of this hemisphere banded themselves together
to achieve total development: social, institu-
tional, and cultural, as well as economic* This
was done by mutual assistance. Our motivations
were moral and in our own national interest.
We cannot live in a home hemisphere half rich
and half poor ; we might exist, but we could not
live in peace, harmony, and understanding that
way.

That there is misimderstanding about the Al-
liance in this countiy and elsewhere is mifortu-
nately all too true. It is as much my job to
help correct these misunderstandings as it is
to try to administer our part of the Alliance
wisely, hmnanistically, and effectively. These
misiuiderstandings run both ways. Let us look
at some key ones.

Misunderstanding 1. ^^U.S. support for the
Alliance is a political gimmick, soon to end."

Wrong. It is the keystone of our foreign
policy toward Latin America. We have already
left Castro and other extremists far behind,
and we expect to continue to assist Latin
America toward total development until a Latin
American common market is in operation in
1985, according to the timetable of the Presi-
dents at Punta del Este last April.

Misunderstanding 2. '•''The Alliance is an
American handout."

Wrong. Most of it is in loans, and these loans
are negotiated in a contractual framework that
makes the U.S. contribution contingent upon
the assisted country's doing its part in a mu-
tually acceptable development job. Some Latin
Americans, but not very wise ones, say that our
aid should be a handout. They, too, are wrong ;

* For background and texts of the documents signed
at Punta del Este on Aug. 17, 1961, see ibid., Sept. 11,
1961, p. 459.

for assistance on that basis would be demeaning
and would not get the development job done.

Misunderstanding 3. '■''The Alliance is con-
cerned only with economic development."

Wrong. See the 12 goals of the Punta del Este
charter. They liighlight social reform, modern-
ization of institutions, and effective democracy.

Misunderstanding 1^. '•'•Trade., not aid, is what
Latin America needs."

Partly wrong, partly right. Wlien Latin
America is able to make more to trade and we
and they develop wider and fairer world market
conditions for her products, there will be less
need than there is now for developed-coimtry
capital to finance Latin America's moderniza-
tion and reform. We are working very hard and
making some sacrifices ourselves to help Latin
America earn more in foreign markets. Our
participation in the International Coffee Agree-
ment and our present efforts to get industrial-
ized comitries to agree to extend temporary
trade preferences to the products of all develop-
ing countries prove this. There are many other
examples. Finally, trade alone, without willing-
ness to distribute the benefits of trade more
fairly, will not improve lives for all the people
in the terribly short time at hand.

Misunderstanding -5. '•'■The U.S. part of the Al-
liance is socialistic."

If tills means that AID helps only govern-
ments and not private enterprise, the answer is,
"Wrong." AID technical assistance helps train
Latin Americans for better business manage-
ment. AID finances studies of the feasibility of
various business projects. AID (for a moderate
fee) guarantees private investment against cer-
tain risks. AID loans help finance dollar im-
ports by private concerns that need capital
equipment and essential raw materials. AID, in
conjunction with the government of the aided
country, also helps to build highways, dams,
bridges, and other public-sector projects. Even
this, however, does not detract from the fore-
going; construction projects themselves are
very largely carried out by private concerns
imder public contracts. Beyond this, we must
remember that private enterprise could not do
its job if governments did not build the neces-
sary infrastructure.

Misunderstanding 6. '•''Latin Americans with
money do not keep it at home."

Private capital outflow from Latin America

MARCH 18, 1968

385

is a problem for the area and for the achieve-
ment of the goals of the Alliance for Progress,
but it is not nearly as large as it has sometimes
been reported to be and is dwarfed by capital
flowing into Latin America at a rate of about
$1.5 billion per year. Additionally, some 89 per-
cent of the gross investment that has been made
in Latin America during the Alliance years
came from Latin American sources. It is elemen-
tary economics that money invested in a build-
ing or a machine cannot just get up and walk off
to Switzerland or New York.

Misunderstariding 7. ''''Latin Americans do
not tvant change.''''

Wrong. Most of them do want change so
badly that if it does not come through peaceful
revolution, there will be bloody chaos, probably
entling up with serious intrusion into the hem-
isphere by the all too well known beneficiaries
of chaos in the modern world. As the Foreign
Secretary of Mexico, a man I have known and
admired since 1942, has pointed out: In 1910
Mexico saw no alternative to violent revolution ;
the cost of that revolution was terribly high;
today there is an alternative. But the fact that
there is an alternative does not mean that it
will be chosen if peaceful revolution is sabotaged
by blind reactionaries, irresponsible radicals,
scheming agents of foreign despotism, or even
by well-meaning people.

Misunderstanding 8. '•'•The U.S.A. can dictate
change.''''

Very, very false, and we should never forget
it. Unfortunately, some of our fellow Ameri-
cans have trouble overcoming an inclination to
Manifest Destiny, although they may have
come to cast it in a new foi-m. We can help;
occasionally we can sharpen alternatives and
indicate our preference based on experieaice
or science; we can enter into appropriate
dialogs, in and out of Government. But we
cannot take over, either physically or in thought
and deed. First, we would be resisted to the
death. Second, we do not know enough. Third,
we would not want to ; we are still, thank God, a
moral people.

Misunderstanding 9. '•'•The United States can-
not cooperate^ it can only coexist, with Latin
America.''''

I have heard one scholar take this position re-
cently, and perhaps we will hear more pro-
ponents of this approach as the urgency for
change ia Latin America grows and leads some

to feel greater frustration and despair. The

scholar, in part, has written :

Let us be altogether honest with ourselves: there
has been something psychologically degrading to the
Latin Americans in the way we have customarily in-
teracted with them, whether in the cultural sphere or
any other. Even if all that we had conveyed to them
of our wisdom through our preaching, chastising,
cajoling had been useful and relevant — and we know,
of course, that much of it has not been — the relation-
ship has been intrinsically an unhealthy one.

Coexistence rather than cooperation, therefore, is
the likely pattern in the future. That does not mean,
naturally, that United States influence in Latin
America will rapidly and significantly diminish. First,
that influence cannot diminish so long as Latin
American newspapers are overwhelmingly dei)endent
upon our wire services; so long as The Reader's Di-
gest, Time, Good Housekeeping are journals of mass
circulation in the region ; so long as the United States
sets the styles in consumption goods, so long as produc-
tion and marketing techniques developed in the United
States maintain their appeal. But the tone of the re-
lationship will change.

I do not accept the inevitability of this ap-
proach. In fact, I consider the difficulties he
mentions as a challenge for us to develop that
deep mutual understanding that cooperation
requires and that simple coexistence does not. I
believe that all of us in the United States, es-
pecially those of us in public life and including
those in our Congress, should realize that the
problems noted by this scholar are very real. We
all must be more sensitive to the psychological
effects of what we do and convince our neigh-
bors that by making them stronger we do want
to end the overwhelming nature of North
American preponderance in Latin America. If
we can develop that amistad that for Latin
Americans covers so many faults and if we can
shake off the present mood of cynicism and pes-
simism that all too often emanates from our TV,
our radio, our press, and too many of our idea-
makers, we can cooperate. Our President be-
lieves we can. Deep down in our American spirit
of courage and optimism, we all really think we
can.

Neither can I agree with the Latin American
bishop quoted by the scholar in the same paper
that "The problem of Latin America is not to
have more but to be more." If anything, to be
more is our national problem. For Latin Ameri-
cans it is both to have more and to be more. We
can and are helping Latin America to meet both
needs, and they are helping us with our problem
in return. This is the beginning of that true un-
derstanding which comes from sharing a great
exijerience.

386

DEPAKTMENT OF STATE BULLETIN

ij United States Policy Toward International Efforts
To Improve Conditions of Commodity Trade

hy Antlumy M. Solomon

Assistant Secretary for Economic Affairs '

I -welcome and appreciate this opportunity to
discuss United States trade policy with you.
The chamber is to be commended for its efforts
to dispel the prevailing ignorance about Africa
and to facilitate the role of this country in
Africa's development. It is a privilege to follow
the many distinguished speakers who have ap-
peared before you.

I propose to talk to you about one aspect of
our trade policy that unfortunately is little un-
dei-stood in the United States but looms large
to the countries of Africa as well as other devel-
oping coimtries: our policy toward interna-
tional efforts to improve conditions of com-
modity trade. I want particularly to discuss two
commodities of crucial importance to Africa —
coffee and cocoa — and our efforts through the
International Coffee Agreement and a proposed
international cocoa agreement to deal with the
difficult problems of these commodities. And let
me make no bones about it : I want to enlist your
help for this part of our trade policy. It badly
needs greater understanding and support in the
United States.

In New Delhi, the second United Nations
Conference on Trade and Development —
UNCTAD-II, as it is frequently called — is now
underway. This largest of all international con-
ferences takes place against a background of
lagging economic progress in too many of the
developing countries, which understandably
gives rise to acute frustrations. The conference
seeks a consensus on measures to help accelerate
this program. The developing countries, partic-
ularly those in Africa, place great hopes on
the results of this conference. T\Tiile the nature

'Address made before the African-American Cham-
ber of Commerce, Inc., at New York, N.Y., on Feb. 21
(press release 37).

and size of the conference — some 130 nations
with more than 1,500 delegates participating —
preclude the negotiation of definitive and bind-
mg action on specific issues, we hope that the
conference will produce constmctive and prac-
tical proposals for action to be taken by nations
collectively and individually. Our delegation
is participating fully toward that end.

The range of problems and the measures im-
der consideration at New Delhi cover the whole
scope of development. There will be discussions
on the voliune, terms, and conditions of aid, on
shipping, on increasing earnings from invisible
transactions, on the promotion of regional
groupings, on food supply difficulties, and so
forth. The overall preoccupation, however, will
be with ways and means of expanding the ex-
port earnings of developing comitries.

These countries need growing imports of
capital equiipment and other goods if they are to
succeed in increasing production and raising
per capita income. Foreign aid and private in-
vestment will help and indeed are critical, but
paying for their import needs will depend in the
main on their own export earnings. And these
earnings in turn depend upon markets for pri-
mary products such as coffee and cocoa. The
simple fact is that despite the progress many of
these countries have made in modernizing
their economies, 85-90 percent of their export
receipts comes from the sale of prunary com-
modities.

This figure, moreover, understates the full
dimensions of dependence on commodity ex-
ports. Some 30 developing countries rely on one
commodity for at least lialf llioir eaniinjjs, and
another 10 on two commodities. Tliis depend-
ence on one or two products, which leaves devel-
oping countries vulnerable to world market de-
velopments beyond their control, is particularly

MARCH 18, 1968

387

striking in Africa with regard to coffee and
cocoa.

Coffee provides almost $700 million, or one-
fourth of the total export revenues of 19 sub-
Saharan African countries. It provides 57 per-
cent of Uganda's foreign exchange, 77 percent
of Burundi's, 56 percent of Rwanda's, 56 percent
of Ethiopia's, 40 percent of Ivory Coast's, 49
percent of Angola's, and 30 percent of Kenya's.
Many of the 14 Latin American producers are
similarly dependent on coffee.

Cocoa provides 68 percent of Ghana's total
export revenues, 20 percent of Ivory Coast^s,
40 percent of Cameroon's, 35 percent of Togo's,
and 20 percent of Nigeria's.

The intense feeling of helplessness this de-
pendency often produces in developing coun-
tries is brought home if we picture the United
States relying on cotton for more than half its
export earnings and 'facing a recession in the
European textile industry.

The commodity trade of developing countries
is beset by nvunerous problems. In the short term
there is a tendency toward frequent and sharp
price fluctuations brought on by changes in
weather and yields in producing countries and
variations in economic activity in the main con-
suming countries. In periods of high prices seri-
ous internal inflationary pressures develop ; and
when prices drop, so do government revenues,
investment, imports, and the level of economic
activity. Because the developing economies lack
flexibility and their economic alternatives are
few, this instability feeds upon itself with high
prices leading to overproduction, overproduc-
tion to glut and low prices, low prices to under-
production, and so on, in a roller coaster cycle.
More serious than short-term price instability
is the fact that with a few exceptions world
demand for primary products is growing slowly.
For products such as coffee and sugar, per capita
demand in developed countries is generally
saturated. A number of commodities, such as
rubber and the hard fibers, face growing compe-
tition from synthetics. Finally, agricultural
protection and rising production in developed
countries have seriously eroded the markets for
sugar, fats and oils, and certain other agricul-
tural items produced for export by developing
comitries.

In siun, the market situation for commodities
often seems to reflect the story of the Ghanaian
cocoa farmer who was asked "How are things,

Kofi?" "Average," Kofi replied. "What do you
mean average?" "Well, worse than last year but
better than next."

Varied Approaches to Commodity Problems

The developing countries seek to raise the
average, and at UNCTAD priority attention
will be given to commodity problems. The de-
veloping countries want the elimination of
tariffs and quota restrictions on their products.
They want an assured share of the increase in
consumption of commodities, like sugar, also
produced in developed coimtries. They also want
better and more stable prices for a wide variety
of products, and they regard international com-
modity agreements or other international ar-
rangements as the primary means to those ends.
The developing comitries urgently ask our
help to solve their commodity problems. We ac-
cept the need for cooperation. The United States
cannot disregard the impact of diificulties in
world markets for coffee and cocoa or rubber and
tin on the economic and political stability of
Africa as well as Latin America and Asia. We
cannot be oblivious of the extent to which ad-
verse conunodity trends can offset the benefits
of even the best laid foreign aid programs. We
want to help these countries help themselves,
and finding means to expand trade is one way
to do this. Commodity trade is an obvious place
to begin.

In pursuing this objective we should also be
mindful of the benefits to U.S. export trade
which accrue from larger and more stable ex-
port earnings by developing countries. These
countries already provide an outlet for almost
$9 billion of our commercial exports. What they
earn from exports to the developed world by
and large goes back to advanced countries like
our own to buy capital imports and other
essentials for economic development. Over the
long term, economic development in the poorer
countries is also the basis for expanded pros-
perity in the richer ones.

Unfortimately, effective action to solve the
problems of commodity trade is not easy. Tliere
are so many commodities and their problems
are so varied that no one solution or approach
is possible. Action must be pursued on a variety
of fronts. One way is to increase consumption
and enlarge the market. Thus we have elimi-
nated all our duties on tropical products— cocoa,
coffee, tea, bananas, et cetera— and have urged

388

DEPARTMENT OF STATE BULLETUST

other developed countries to do the same. To
help developing countries cope with the prob-
lem of -wide and destabilizing swings in their
export earnings, we have supported arrange-
ments in the International Monetary Fund to
provide prompt balance-of -payments assistance
to those countries experiencing severe export
shortfalls because of factors beyond their con-
trol. In the past year this facility provided some
$165 million in assistance to seven developing
countries.

International agreements to regulate produc-
tion, trade, and prices for individual commodi-
ties ai'e the most renowned and contentious of
the efforts to meet the pressing economic diffi-
culties I have just described. We believe we must
cooperate with other governments in examin-
ing sympathetically and on their merits all pro-
posals for commodity agreements, hopefully
contributing a measure of leadership in clarify-
ing what is and is not feasible and economically
sound. On the other hand, I frankly have seri-
ous doubts as to the scope for such agreements.
Our experience suggests that economic and tech-
nical factors severely limit the number of com-
modities for which agreements are practical.
In addition, agreements have proved compli-
cated to negotiate and difficult to keep in smooth
running order. Nevertheless, there are cases
where an agreement can constructively contrib-
ute to the solution of commodity problems. The
Coffee Agreement has already established its
utility, and the right kind of cocoa agreement
could also be beneficial.

Before examining these agreements with you
in some detail, let me stress that in entering
negotiations for any commodity agreement we
must, and do, make certain that our own trade
interests and the needs of our consiuners are
safeguarded. The responsibility we officials in
the executive branch share with the Congress in
considering such agreements makes this manda-
tory. Xot only the range of prices provided for
in an agreement but the controls and adminis-
trative mechanism can have an impact on our
trade and industry. Wlien your Government
participates in negotiation of an agreement, it
seeks the active advice of the trade and makes
every effort to insure that the noi-mal market
mechanism is preserved to the maximum extent
possible. We insure that prices, while accept-
able to producers, are in line with market reali-
ties and reasonable and acceptable to our
consiuning public.

Now to coffee. I have already underlined the
importance of coffee to the developing countries
of Africa and Latin America. It is the second
most important agricultural product in world
trade. A drop of 1 cent in the price of coffee
costs the developing coimtries an estimated $70
million.

In the early 1960's the coffee world was in
great difficulty. Surpluses were piling up. An
arrangement among producing countries to
control exports was ineffective, and there was
worldwide clamor for help. A real possibility
existed that prices would collapse, nullifying
the effects of the newborn Alliance for Prog-
ress and undermining African economies. Under
United Nations auspices and with active United
States support and participation, an agreement
was negotiated in 1962.

The International Coffee Agreement

The Coffee Agreement is a milestone in inter-
national cooperation. Through a system of ex-
port quotas for each' of the now 40 producing
member countries, wMch keeps exports roughly
in line with demand, the agreement has pre-
served a price structure that is reasonable to
consumers but still remunerative to producers.
Coffee earnings of developing countries have
stabilized around $2.2 billion per year, com-
pared to an average $1.8 billion in the 2 years
before the agreement. Average import prices in
1967 were about 10 percent above the average
of the 2 years preceding the signing of the
agreement but about 10 percent lower than the
price in 1964 (when U.S. participation in the
agreement was being debated) and 30 percent
lower than the average in the period 1953-1959.
In effect the agreement has provided short-term
measures to stabilize prices and buy time for an
attack on overproduction.

Keeping the agreement going and effecting
improvements in it has been a difficult and time-
consimiing task, and I personally confess that
sometimes the problems have been so perverse
and the negotiations so vexing that in a quiet
moment I have occasionally wondered whether
there might be an easier way. The agreement
was marred in its early years by large-scale eva-
sion of export quotas, with a consequent threat
to price stability. There has been protracted
conflict among producers as to the size of their
shares of the world coffee market; in fact, it is
probably fair to say that with the exception of

MARCH 18. 1968

389

our recent well-publicized instant-coffee dis-
pute with Brazil, major disagreements in the
Coffee Organization have not been between pro-
ducing and consuming countries but among the
producers themselves.

Happily, problems have been handled in a
pragmatic fashion, and the agreement has sur-
mounted or moderated many of these difficulties.
The United States and other importing coun-
tries have cooperated in developing a control
system that appears to be successful in prevent-
ing large shipments above export quotas; we
have evolved a mechanism for adjusting sup-
plies of the various types of coffee to consumer
tastes, which has also helped to alleviate the
differences among producing countries ; we have
preserved a significant measure of competition
in the coffee market and maintained the usual
channels of commerce. In the last few days our
instant-coffee dispute with Brazil was satisfac-
torilj' resolved, with assurances that fair com-
petition will prevail while the agreement is in
force.

All this, I submit, is no mean achievement for
5 years. For Africa it has meant an increase in
export earnings from coffee from $360 million
in 1962 before the agreement to almost $700
million in 1966.

Renegotiation of the CofFee Agreement

Despite its success in stabilizing prices the
agreement is still beset by one basic problem:
More coffee still is being produced than the
world drinks, albeit to a lesser extent than before
the agreement. If we are eventually to move to
a situation where the agreement may be put on
a contingency basis, we must get at the root
cause of the coffee problem — overproduction—
and we are M-orking hard on this.

Over the past 6 months the United States has
actively participated in renegotiating the agree-
ment for another .5 years after its expiration
September 30, 1968. The proposed new agree-
ment provides a number of revisions and im-
provements which give it a developmental cast
and which illustrate the possibilities of a
comprehensive and constructive approach to a
commodity problem through an international
agreement.

First, a mechanism has been established
whereby each producing country is required to
establish realistic controls over production and
production goals so that by 1973, the last year

of the proposed new agreement, production in
each country should approximate its own con-
sumption and permitted exports. There are seri-
ous penalties for noncompliance.

More important and truly innovative, coffe«
l^roducers have agreed to use some of the re-
sources made available by the agreement to
directly attack the problem of surpluses. They
will contribute to a diversification fund a mini-
mum of 60 cents out of each bag of coffee ex-
ported. Over 5 years these contributions will
amount to about $150 million, which will be
used to finance sound proposals for moving re-
sources out of coffee into production of badly
needetl food and other more economic products.
We expect the World Bank to participate in the
administration of this fund to insui'e that proj-
ects are technically and financially sound. To
assist in this new but promising cooperative
venture, the United States has made clear its
willingness to lend up to $15 million to such a
fund as soon as it becomes fully operative and
to lend up to an additional $15 million to match
the assistance of other coffee-consunimg coun-
tries to the fund.

Wliat are some of the objections to the
agreement ?

1. "It hurts the consumer." In fact, except for
1964, when a Brazilian frost sent prices up, re-
tail prices have remained fairly stable during
the life of the agreement. They have averaged
about 70 cents per pound, compared with an
average price of 83 cents in the 9 years preceding
the agreement.

2. "All the money goes to rich planters." Cer-
tainly there are rich planters in a number of
countries who benefit from the agreement, but
small farmers predominate in most pi-oducing
countries, particularly in Africa. They receive
the bulk of coffee receipts, with a sizable por-
tion also going to general economic development
programs.

3. "It freezes production patterns and penal-
izes the efficient producer." This is an admitted
drawback in quota agreements. However, there
has been a revision of quotas in the new agree-
ment; and with the mechanism for adjusting
supplies of types of coffee to changes in con-
sumer tastes, market shifts can occur.

Probably the best defense of the agreement is
to visualize what would be the situation if it
did not exist. The export earnings of developing
countries might drop by as much as one-half
billion to a billion dollars. The Alliance for

390

DEPARTMENT OF STATE BTJLLETIN

Progress would be in deep trouble, and the frag-
ile stability of many African countries endan-
gered. Some producer governments might be in
serious political straits. In this period of declin-
ing foreign aid I am loath to think of the dam-
age that may be caused if the agreement is not
continued.

We expect to present the new agreement to
Congress in the near future. Outside of a limited
production in Hawaii based on the excellent
Kona coffees, there are no coffee farmers in this
country; and the agreement is without widely
based interest groups favoring it. However, the
majority of our coffee trade supported the first
agreement, and we hope they will join us in
working for approval of the new agreement. We
believe we have a much improved agreement
and a sound case to present to Congress.

Progress Toward Cocoa Agreement

Tlie case of cocoa is somewhat different. The
number of countries producing it — all of them
developing nations — is far smaller than those
producing coffee, and thus the political and eco-
nomic ramifications are less extensive. Never-
theless, cocoa provides developing countries
with some $500-600 million per year in foreign
exchange. It is vital to five of our good friends
in West Africa — Ghana, Ivory Coast, Nigeria,
Cameroon, and Togo — and is also of importance
to Brazil and Ecuador. The African coimtries,
and Ghana in particular, see an agreement on
cocoa prices as essential to their long-term plan-
ning and development. They view our willing-
ness to participate in a cocoa arrangement as a
crucial test of our friendship.

Cocoa also presents somewhat different eco-
nomic problems than does coffee. At present
there is no surplus of cocoa; in fact, quite the
opposite is true. We are now in our third year
of consumption exceeding production, and
prices are firm. However, cocoa is notoriously
subject to wide price swings, primarily because
supply varies from year to year due to weather
and insect attack. In 1964 prices hovered around
24 cents per pound. In 1965 they plummeted to
11 cents. In 1967 they reached 30 cents and are
now about 27 cents. The impact of these changes
on production planning, on the use of resources,
and ultimately on the producing coimtries' polit-
ical and economic staljility can be profound. A
floor under cocoa prices could protect producers
and at the same time encourage governments

to maintain support prices for cocoa, thus help-
ing to assure that production will meet growing
demand.

Since 1962, the United States has actively co-
operated in the search for realistic and accept-
able stabilization measures to protect against
precipitous price declines. These negotiations
frankly have been difficult and protracted, and
the U.S. position has often been severely criti-
cized by developing countries. Two full-scale
negotiating conferences, in 1963 and 1966, failed
over several issues, particularly the question of
the price levels to be defended by the arrange-
ment. Producers wanted a price range which we
believed would encourage overproduction, sad-
dle the market with burdensome stocks, and
check consiunption. It would have been easy
for us to gain some short-term international
popularity by accepting the producer demands.
In doing so, we actually might have harmed
their basic interests. Unless we can demonstrate
fairly conclusively that a cocoa agreement is
economically sound, that it effectively protects
prices without encouraging overproduction, and
that it does no harm to our own consumer and
commercial interests, Congress will certainly,
and quite rightly, reject it. Such rejection could
permanently damage the chances for an agree-
ment.

In the past year, however, we have made much
progress toward the goal of a workable agree-
ment. In mid-1967 the United States responded
to an initiative by Ghana to hold bilateral talks
on the essential principles which should govern
a cocoa agreement. An understanding on these
principles was reached by the two nations and
later generally accepted by the major producing
and consuming countries. Basically, these prin-
ciples call for a system of annual export quotas
when prices require it, supplemented by use, if
necessary, of a buffer stock to defend a minimixm
price of 20 cents per poiuid and a maximum
price of 29 cents. Built into the buffer-stock
mechanism are disincentive features which pro-
tect against the agreement being an inducement
to overproduction. The buffer stock is to be
financed by a 1 cent per pound levy on cocoa-
exporting countries.

Another negotiating conference was held in
December 1967, but the time allotted was too
short to permit resolution of all issues. We ex-
pect the conference to be resumed in the near
future and are hopeful that a successful con-
clusion can be reached.

MARCH 18, 1968

391

An agreement, if it is successfully negotiated,
will also be submitted to Congress. As with the
Coffee Agreement, we anticipate another care-
ful re\new and evaluation by Congress, probably
even more searching than with coffee, because
a cocoa agi'eement would be new and would in-
volve a different approach. We believe, however,
that an agreement negotiated along the lines of
the principles that have been accepted will be
an effective and sound instrument with protec-
tion for the interest of the U.S. trade and
consiuner.

Let me conclude by saying commodity agree-
ments are no panacea. They have serious limita-
tions, and there is much to be said for allowing
market forces to work themselves out. The
myriad clash of interests makes the negotiation

of them difficult and often impossible. However,
in approaching those products for which effec-
tive international cooperation is possible, we
must rid ourselves of outworn dogma and avoid
a meaningless exchange of doctrinal arguments.
Instead, we must attack the problems prag-
matically, fuDy aware of their economic and
political ramifications and guided by our over-
all national interest. The cases of coffee and
cocoa offer opportunities for constructive action
on an international basis. We believe that in both
these cases we have worked out, or will soon
work out, agreements that can make a real con-
tribution to developing coxmtries without harm
to our own basic economic and commercial inter-
ests. We hope they will command your support
and that of other interested parties.

German-American Economic Interdependence

iy George C. McGhee

Ambassador to the Federal Republic of Germany '

I was pleased to have your invitation to meet
with you here today. Those of us who represent
the United States abroad benefit greatly by
opportunities such as this to review with our
constituents what we are doing, where we are
going, and why. President Jolinson's recent ac-
tions to improve our balance of payments serve
to illustrate the need for our Government to
maintain close contact with the business
community.

Indeed, the distinction between the business of
government and of private business is becoming
more and more blurred. It is in the interest of all
of us to sort out our common goals and to dis-
cuss them frankly and openly. Both of us learn
something in the process, and both of us are the
beneficiaries.

I want to talk to you today about the German
economy and German-American economic in-
terdependence. This is a subject which I am sure
is of direct interest to most of you here today.

' Address made before the Economic Club of Detroit
at Detroit, Mich., on Jan. 15.

Indeed, many of you here in Detroit, the auto-
mobile capital of the world, have very substan-
tial investments in Germany.

The Federal Republic of Germany, with a
gross national product of over $120 billion, is
the world's third largest industrial power.
Equally important, the Federal Eepublic is the
second lai-gest trading nation in the world, with
over $38 billion a year in impoi'ts and exports —
not too far behind our own $55 billion. Our
exports to Germany during 1967 were about $2
billion, our imports about $1.9 billion. This
makes us Germany's largest single siipplier and
the third largest market for German goods.
Germany in turn is our fourth market.

The magnitude of the German role in the
world economy is not only reflected in the over-
all figures but is especially striking for certain
sectors. The Federal Republic exported some
$4.3 billion worth of machinery in 1966, up
from $3 billion in 1962. Expoi-ts of motor ve-
hicles and aircraft were valued at $2.8 billion
in 1966, up from $1.7 billion in 1962. Exports
of electrical equipment almost doubled during

392

DEPAHTMENT Or STATE BTjr.LETTN'

that period. On the import side the Federal Ee-
public bought $8 billion worth of finished prod-
ucts. Between 19G2 and 19G6 the import of
finished j)roducts almost doubled in value.

According to Fortune magazine, the largest
single German company, Volkswagen, was in
1966 the fourth largest company outside of the
United States. Volkswagen had sales valued at
$2.5 billion in that year, a figure which is, I
suspect, respectable even in Detroit. The 13th
largest firm was also a German motor vehicle
manufacturer, Daimler-Benz, with sales of
about $1.5 billion. Tlie German electrical giant,
Siemens, was ninth on the list, with sales of $2
billion. Out of the first 50 foreign firms on For-
tune's list, 15 were German. Included were
producers of iron and steel, chemicals, and elec-
trical goods. The export market is important
for almost all of them.

The figures on trade between our two coun-
tries are impressive; however, they do not tell
the full storj'. In addition, our companies have
over $3 billion in investments in Germany —
about 4 percent of total industrial investment
and 40 percent of all foreign investment in the
country. American investment in Germany has
gi-eatly expanded since World "War II. In 1933
there were 41 American subsidiaries operating
in Germany ; according to our most recent rec-
ords, there are now more than 400. These range
from giants such as ESSO, IBM, Ford, and
General Motors to a small manufacturer of arti-
ficial teeth on Lake Constance.

On the other side of the ledger, we would
certainly like to see more German investment in
this country. I am sure that there are many
American communities which would welcome
subsidiaries or participation of German firms.
So far, however, the value of German interests
here is only some $300 million.

German investment is, however, growing.
Large German chemical firms already have sub-
stantial interests in partnership with U.S. com-
panies. BASF produces polyester fibers right
here in Michigan with Dow Chemical, and their
joint operations will shortly be expanded in
South Carolina. Farbwerke Hoechst has a joint
production facility with Hercules Powder, and
Bayer has recently agreed on the establishment
of a joint subsidiary with the Schering Corpo-
ration.

In fields other than chemicals there are sig-
nificant German investments in collaboration
with U.S. firms in the field of paper products
and aluminum. In the latter instance the United

Aluminum Company of Germany has recently
acquired a plant in EUenville, New York, which
is capable of producing 35,000 tons of semifin-
ished products yearly.

We would, however, like to see more U.S.
companies include foreign capital in their ex-
pansion plans. In addition to the teclinological
advantages Germans and other Europeans can
offer, it would help our balance of payments.
What we need to encourage additional German
investment are more particulars from those of
you who are active in the U.S. economy and
either seek German participation or know the
investment opportunities here. If you can give
us sufficient details, our Embassy will be glad
to serve as an intermediary in seeking out po-
tential German investors.

These investments do not necessarily have to
be large. You yourselves are aware that almost
half of the industrial output of the United
States is produced by small firms — those with
less than 500 employees. It is often just such
firms which have the most difficulty in raising
capital and which, because of their size, are
more attractive to the smaller European
investors.

Common Interests

From this sketch, you can readily appreciate
the importance of Germany to us in the suc-
cessful pursuit of the President's balance-of-
payments program announced on January 1.^
The Germans share with us a large stake in
maintaining high levels of trade and invest-
ment. Their Central Bank holds a large per-
centage of its resources in dollars, which gives
them a vested interest in keeping the dollar
strong.

I also believe that American industry has an
interest in the economy of Germany. To put it
another way, as President Kennedy said in
Frankfurt in June of 1963 : »

Today there are no exclusively German problems, or
American problems, or even European problems. There
are world problems — and our two countries and con-
tinents are inextricably bound together in the tasks
of peace as well as war.

An important common interest between our
two countries is that of aid to developing coun-
tries. The Federal Eepublic is now engaged in
economic and technical assistance to over 90

' Bulletin of Jan. 22, 1968, p. 110.
• Ibid., July 22, 1963, p. 118.

MARCH 18, 1968

393

counti'ies, which parallels and complements our
own efforts. The $i50 million Germany spends
for this purpose each year is comi^arable, in re-
lation to gross national product, to our own aid
efforts. It is, therefore, inevitable that we main-
tain almost daily consultation with our German
colleagues on these matters.

We should also recognize that our economic
cooperation with Germany involves a great deal
more than the day-to-day problems of our direct
relations. The Federal Republic is, for example,
the most important member of the Common
Market ; we cannot ignore its stand on matters
under discussion within that important orga-
nization. We must also deal with the Germans
on matters related to the international monetary
mechanism both within and outside the Inter-
national Monetary Fund. We must take into
account the attitude of a country which holds
one of the most important monetary reserves in
the world.

Condition of German Economy

It would perhaps at this point be worthwhile
to examine the present state of the German
economy and how it affects us. After sustaining
an average rate of growth of about 6 percent per
year in constant prices for many years, the Ger-
man economy experienced in 1966 and 1967 what
they tenn a "downturn to their upturn." In the
latter year there was a slight decline in GNP in
constant prices. The German Government re-
sponded with some cautious "pump priming"
of the economy, based on the teachings of Jolui
Maynard Keynes. The German Central Bank
also aided these efforts by following an easy-
money policy during 1967.

On the foreign trade side there was in 1967 a
decline in the demand for imports, as a part of
decreased internal demand as a whole, and a
surge in export sales. For the year as a whole, in
fact, the Federal Eepublic had the largest trade
surplus in its history — approximately $4.2 bil-
lion. There was, during the same period, a cor-
responding deterioration of our own trading
position with Gennany. German sales in this
country in 1967 were up 7 percent from the year
before; whereas our sales in Germany were
down 4 percent.

Many of you will also be aware of another re-
cent event of importance to our economic rela-
tions with the Federal Republic: the shift by
the Germans from their former system of turn-
over taxes to the value-added tax. This change,
which became effective January 1, is one of a

number of measures, some already taken and
some still planned, to bring their economic sys-
tem into closer conformity with those of other
members of the Connnon Market. This shift has
necessitated a rise in tax rates to insure the same
revenue under the new system — generally from
a former rate of about 4 percent to a new rate of
10 percent, although there are some exceptions.

The introduction of this new tax system was
accompanied by corresponding changes m bor-
der taxes levied on imports and rebates granted
by the Government to exj^orts. It means that
U.S. exports now face a higher charge when
they enter Germany and that German exports
entering this country (and other countries as
well) now receive higher rebates from their
Govermnent. It is the contention of the German
Government that there will be no impact on
trade resulting from this change in taxes ; how-
ever, we continue to be concerned about the
exact effect on our trade with Germany. This
problem has been discussed in the OECD [Or-
ganization for Economic Cooperation and De-
velopment] and GATT [General Agreement on
Tariff's and Trade], and we intend to have
further discussions.

The outlook for 1968 is for a resumption of a
healthy growth in the German economy, which
should mean an increase in American exports
to Germany. However, this is no sure thing, as
you know ; and the American exporter will not
be able to relax and just wait for the orders to
flow in. We are faced in Germany with heavy
competition from other suppliers, especially
from within the Common Market. The impor-
tance of the German market, however, can
readily be appreciated when you realize that in
1967 we exported nearly $600 million in agri-
cultural products, about $200 million each in the
categories of raw materials and chemicals, and
over $100 million each in the categories of
electrical equipment and aircraft.

Opportunities for U.S. Exporters

The coincidental developments of a 40-percent
cut in tariffs by European comitries on most in-
dustrial products, which will take place on
July 1 as a result of the Kennedy Round, plus
the expected recovery of the Gennan and other
European economies, should make 1968 and the
following years a period of excellent opportuni-
ties for U.S. exporters. It is my hope that those
of you already selling in Europe will intensify
your efforts and that those not yet abroad will
decide to explore this vast market. You can in

394

DEPARTMENT OF STATE BULLETIN

this -way help assure the success of the Presi-
dent's balance-of-payments program.

As a businessman myself, I recognize that in-
creased U.S. exports depend far more on the
efforts of individual firms which have com-
mitted themselves to foreign trade than on any
program our Government can undertake. Never-
theless, I would like to jwint out that a consider-
able part of the activity of our Embassy in
German}' is devoted to easmg the way for
Americans intei-ested in selling there.

Our commercial officers are located in eight
cities in the Federal Eepublic. Tliey are pre-
pared to assist you in estimating the market;
makuig individual contacts with potential
agents, distributore, and buyers; and providing
infonnation about your potential customers.

I Often, a letter to our offices in advance of your
European trip or a visit to us after arrival in
Germany can help you in appraising the
competitive situation you face.

A phase of our work of gTeat importance is
our promotion of U.S. exports tlii'ough Govern-
ment-sponsored exliibitions of American j^rod-
ucts in Germany. One way we do this is through
almost monthly exhibits in specialized fields at
the U.S. Trade Center in Frankfurt. On a less
regular basis, the Department of Commerce and
the Embassy sponsor large official exhibitions
devoted to particular product themes at major
German trade fairs. As examples, in 1967 we
I sponsored exhibitions on tourism, chemical
equipment, and materials handling.

These trade fairs are of major importance to
those who wish to sell in Germany, since Ger-
man businessmen tend to emphasize the sales
aspect of their trade fairs more heavily than we
do in the United States. I personally attended
all three U.S. official exhibitions at major Ger-
H man trade fairs in 1967. My talks with the U.S.
exliibitors convinced me of the great opportimi-
ties offered, even to those with no previous
experience in Germany.

Wliether the U.S. Government is sponsoring
a special exhibition or not, it is in the interests
of American business to be represented at major
international fairs in the Federal Republic. Be-
cause they bring together buyers and sellers in
one specialized area, they are extremely impor-
tant not only for sales but also for sizing up
the competition and finding out what the mar-
ket prospects are for particular commodities.

Having mentioned our interest in increased
trade, I must also point out that tliere is at the
present time considerable sentiment on both
sides of the Atlantic for greater protectionism

and away from the liberalizations of the Ken-
nedy Round. As President Jolmson said on De-
cember 16,^ the Kennedy Round reductions will
"give rise to many demands for protectionism
here and abroad. We must all stand firm against
shortsighted protectionism."

I would therefore like to emphasize to you
here today what I tell my European friends:
that protectionism, like its mirror image, lib-
eral trade, is a two-way street. Protectionist
sentiment in one country feeds upon similar
attitudes in other countries. AVe are in daily
contact with European govermnents discussing
proposals which could affect U.S. exports
unfavorably.

Our message to these governments, and to the
peoples of Europe as well, is that both of us have
a conunon interest in Ireeping protectionist pres-
sures at a minimiun. And more specifically, it
does not aid the current admhiistration m its
efforts to dissuade the U.S. Congress fi'om en-
acting restrictive legislation on trade that simi-
lar steps are being considered in Europe.

We Americans must keep in mind that the
reverse is also true.

U.S. Investment in Germany

Our "commercial image" in Gennany and in
Europe is reflected not only in our trade but in
our direct investment. Tliere has been much talk
m recent months about the subject of American
investment in Europe. As you may know, a
Frenchman, Jean-Jacques Servan-Schrieber,
has recently written a book on this subject — Le
Def, Americain — which has attracted even
greater interest to what he calls "the American
challenge."

American investment in Germany has a proud
and venerable tradition. Ai\ investment by Yale
and Towne in 1868 is often cited as the first
American investment there. Some of our com-
panies, such as Opel of General Motors and
Standard Lorenz of IT&T, have been there so
long that most Germans do not realize that they
are American. Total United States direct indus-
trial investment in Germany stood last year at
just over $3 billion, or about 4 percent of all
German industry. Today American subsidiaries
account for a large part of American exports
to Germany. They also make possible about $1
billion a year in German exports.

The German Government officially welcomes

*/6»U, Jan. 15, 1968, p. 1

MARCH 18, 1968

395

foreign investment. The German Economics
Minister, Karl Scliiller, in a speech at the open-
ing of the new IBM plant in Mainz on Octo-
ber 4, 1967, said : "Let me again emphasize at
this point my unconditional and unequivocal
support of foreign investments in the Federal
Republic."

We must, of course, be reconciled to a decrease
in the rate of U.S. investments in Germany in
the period immediately ahead. The President's
balance-of-payments program announced Janu-
ary 1 has very obvious implications for those
who have invested in Germany or who plan to
do so. This will, however, be only a temporary
limitation until we have made progress on our
balance-of-pajmients problems. In the mean-
time, some investments can still be made from
funds borrowed in Europe or, as allowed under
the President's progi-am, from depreciation and
earnings. And plans can be laid for the future.

It is important, in the meantime, that we con-
duct ourselves in Germany in such a way as to
assure that our firms will continue to be wel-
come. There are, of course, people in Germany
who raise questions about American investment.
Many say that it is overly concentrated in cer-
tain industries. In the petroleum industry, for
example, foreign companies account for about
70 percent of all investment, of which 36 percent
is U.S.

Here the basic problem is, of course, that little
crude oU is produced in the Federal Republic
and that the Germans, partly as a result of tbe
loss of foreign concessions and capital in two
World Wars, have not yet established interna-
tional oil companies. It is not a question of
whether Germans do busmess with foreign oil
firms — but with which firms. Our oil companies
fully justify the position they hold in Germany,
not only because of the magnitude of their
world oil reserves and the scope of their organi-
zations and facilities but because of their record
of keeping oil flowing to Germany despite dis-
locations elsewhere, such as during the recent
Middle East crisis.

Electronics is another sensitive area. It is esti-
mated that American companies control about
80 percent of the computer industry in Ger-
many. I tell my German friends that there is no
reason why they should not consider IBM Ger-
many— which employs in Stuttgart alone 15,000
Germans and no Americans — as a German com-
pany. IBM produces computers — based on the
latest technology — within the German currency
area, provides employment to Germans, pays
German taxes, and adds to German exports —

not to mention the benefit to other German in-
dustry through purchases of fabricating ma-
chinery, raw materials, and computer software.

As for automobiles, about 40 percent regis-
tered in Germany are produced by American
companies. Even so, Volkswagen is by far
the largest automobile producer in Germany
and dominates our own smaU-car field, with
about 450,000 sold here last year. Automobiles
manufactured by U.S. subsidiaries in Germany,
in addition to their strong appeal to the Ger-
man purchaser, have played an increasing role
in German exports, particularly to the Unit«d
States.

The areas I have mentioned are especially
sensitive; however, in general our influence on
German industry is greatly exaggerated. Of the
100 largest German companies in 1966, the top
American company — ESSO — ranks only 16th.
Opel and Ford are 17th and 24th, respectively.
In many large industries, such as chemicals
and steel, there is almost no American |
representation. |

There are occasionally complaints that our '
firms do not do a proportionate share of their j
research and development in Germany. Our |
Embassy recently made a siirvey of 82 major i
American subsidiaries and found that most do
a substantial amount of research in Germany. i
For example, take the case of IBM. It has six ;
research and development centers in Germany,
employing about 700 scientists and teclmicians.
During 1964 and 1965, the firm contributed al-
most $4 million to Gennan universities and in-
stitutes to promote science and research.

It is sometimes alleged in Germany that
American companies there are not sufficiently
"German." It is said that American subsid-
iaries do not have German managers, that
American managers do not speak German, and
that they have little understanding of German
business and social customs. Complaints are
heard about overly centralized direction from
head offices in the United States. Fmally, it is
sometimes said that the American firms try to
impose their operational methods on their sub-
sidiaries and that this leads to high-pressure
sales measures.

How can these reactions — even though not in
many cases justified — be avoided? It is prob-
ably impossible, given human nature, to do so
entirely. On the other hand, it does not help any-
body's business to create ill will. To avoid such
problems in Germany, it seems to me that the
American investor should encourage as much

393

DEPARTMENT OF STATE BULLETIN

Germ.in participation as possible, perhaps
through a joint venture. There is also much to
be said for listing the stock of the American
company on the German exchanges so Germans
can at least become partners in the jjarent
company.

German management should be used when
feasible. Deference should be paid to German
business customs and sensitivities. Actually, our
surveys show that of the 298 most important
U.S. firms with direct investment in Germany,
61 percent do have German managers. Many of
our largest firms there employ no Americans at
aU.

In closing, I believe that the maintenance of
a sound basis for our business relations with
Germany, as with Europe as a whole, is impor-
tant to both sides. I believe it represents a great
challenge to Americans engaged in interna-
tional trade.

As we increase our economic ties with Ger-
many and Europe we strengthen the ability of
the free world, of which we together constitute
the citadel, to protect and enliance the freedom
that has made our way of life possible.

Steps Recommended To Increase
Foreign Travel to United States

White House Announcement

White House press release dated February 19

The President on February 19 received the
report of the Industry-Government Advisory
Commission on Travel.

The Commission was appointed by the Presi-
dent on November 16, 1967, to make specific
recommendations on means of increasing for-
eign travel to the United States. Eobert M.
McKinney, former U.S. Ambassador to Switzer-
land, acted as Chairman.

The original target date for the report was
midsimimer of 1968. In his message to the Na-
tion on January 1,' however, the President
asked the Commission to step up its schedule in
view of the urgency of the Nation's balance-of-
payments problem. He asked the group to sub-
mit immediate recommendations within 45 days
and to make long-term proposals witliin 90
days. The two are combined in the present re-
port— completed ahead of schedule.

' For text, see Bullettin of Jan. 22, 1968, p. 110.

The Commission concentrated its first efforts
on reducing the cost of travel to the United
States. For example, subject in certain cases to
approval by the appropriate regulatoi-y agency,
the following cost reductions for travel in the
United States will be offered foreign tourists:

— 50-percent reduction in regular domestic
airline fares, effective April 28, making these
fares the lowest available anywhere in the
world.

— 25-percent discounts in railroad fares.

— 10-percent discounts on charter coach rates
on trips involving 400 miles per day, effective
May 1.

— 10-percent discounts in rates by the three
largest United States car rental companies,
effective immediately.

— up to 40-percent reductions in regular rates
in seven major hotel-motel chains, effective
immediately.

In addition, the following reductions in inter-
national travel fares to the United States have
been proposed and are under consideration in
international regulatory bodies :

— 25-percent discounts on round trip fares
to the United States on tickets purchased in
Europe.

— reduced steamsliip fares to the United
States.

The Commission also recommended a sub-
stantial increase in the budget of the U.S.
Travel Service of the Department of Commerce,
the simplification of visa and customs regula-
tions, and the creation of a national tourist office
to coordinate the promotion of foreign travel
to the United States.

The President commended the Commission
for "doing a difficult job fast and thoroughly."

"The steps recommended," he said, "wall help
achieve our goal of reducing our travel deficit
by $500 million this year. They wDl have a
gi-owing impact in future years."

"But promoting travel to the United States
will do more than ease our balance-of-payments
problem. It will encourage international under-
standing. It will give Americans the chance to
open their hearts and their homes to travelers
from foreign lands."

The President said these recommendations
"will receive prompt attention. The actions and
recommendations to increase travel to the
United States are an essential part of our pro-
gram to reduce the Nation's travel deficit."

MARCH 18, 1908

397

Mr. Vass Named U.S. Member
of Ryukyuan Advisory Committee

The Wliite House announced on February 15
the appointment of Laurence C. Vass as U.S.
Representative on the Advisory Committee to
the High Commissioner of the Eyukyu Islands.
(For biographic details see White House press
release dated February 15.)

The Advisory Committee was recently estab-
lished pursuant to an agreement between Presi-
dent Johnson and Prime Minister [of Japan
Eisaku] Sato ^ and will develop recommenda-
tions leading to a further identification of the
Ryukyuan people and their institutions with
Japan proper and the promotion of the eco-
nomic and social welfare of the Ryukyuan peo-
ple. Jiro Takase will represent the Government
of Japan on the Committee, and Hiroshi Senaga
will be the representative of the government of
the Ryukyu Islands.

United States and Mexico Agree
on Fishery Zone Boundaries

Department Announcement, February 15

Press release 33 dated Feb.jary 15

The International Boundary and Water
Commission, United States and Mexico, meet-
ing at El Paso, Tex., on January 4, adopted a
minute delineating provisional boimdaries be-
tween \}l\'& exclusive fishery zones of the United
States and Mexico in the Gulf of Mexico and
the Pacific Ocean. These boundaries were delin-
eated to implement the fisheiy agreement of
October 27, 1967, between the United States and
Mexico, by which the two countries granted
reciprocal privileges to United States and Mex-
ican fishermen to continue fishing in waters be-
tween 9 and 12 nautical miles off each other's
coasts for 5 years commencing January 1, 1968.
Both the United States and Mexico enacted leg-
islation in 1966 reserving the right to fish with-
in 12 miles of their coasts exclusively to their
own citizens except when fishing privileges are
specifically granted to fishermen of other coun-
tries by international agreements.

The provisional boundary agreed upon by the

' For text of a joint communique issued at Washing-
ton, D.C., on Nov. 15, 1967, see Bulletin of Dec 4
1967, p. 744.

Commission for the Gulf of Mexico runs
straight out to sea 12 nautical miles along the
parallel of latitude which passes through the
middle of the mouth of the Rio Grande, which
at present is the parallel of 25°57'15" N.
latitude.

The provisional boundary delineated by the
Commission in the Pacific Ocean is what is
known as a median line, which means that
each point on it is equally distant from the near-
est points on the baselines of the territorial seas
of both comitries. For its first 5% nautical miles
the line is a straight prolongation of the land
boimdary and iims from .32^32'0.3" N. latitude,
117°07'24" W. longitude, to .32°.31'29" N. lati-
tude, 117°14'10" W. longitude. It then turns
approximately northwestward for 214 nautical
miles to a point midway between Point Loma
and the Coronado Islands, at 32°33'12" N. lati-
tude, 117°15'51" W. longitude. From the latter
point it rims straiglit to"32^35'32" N. latitude,
117°27'46" W. longitude, which is 12 nautical
miles from both Point Loma and the Coronado
Islands. The provisional boimdaries have now
become effective, with the approval of the Com-
mission's minute by both Governments.

U.S., Japan Hold Second Round
of Talks on Softwood Log Trade

DEPARTMENT ANNOUNCEMENT

The Department of State announced on Feb-
ruary 16 (press release 35) that representatives
of the Governments of the United States and
Japan would meet in Tokyo February 20-22 for
the second roimd of intergovernmental discus-
sions looking toward mutually acceptable solu-
tions to the problem of reconciling conservation
and trade interests included in the use of timber
resources of the Pacific Northwest.

The United States delegation will be headed
by Eugene M. Braderman, Deputy Assistant
Secretary of State for Commercial Affairs and
Business Activities, and will include representa-
tives of the Departments of Agriculture, Com-
merce, and Interior. There will be advisers to
the delegation representing a cross section of
industry, labor, longshoremen, public ports,
exporters, and other interested groups.

The Japanese delegation will be headed by
Kiyohiko Tsurumi, Director of the Bureau of

398

DEPARTMENT OF STATE BtTLLE'TIN

Economic Affairs, Minis! rv of Foroifni Affairs.

Representatives of Japan and the United
States previously held discussions on this sub-
ject in Washington December 11-13, 1967.^

The following is the agenda for the Tokyo
meeting :

1. Introduction and summary statement.

2. Eeview of the discussions at the December
Washington meeting.

.3. Cooperative industr\' and government
efforts to expand trade in processed wood
products.

4. Adjustment of mix of forest products
trade to better meet the demand and supply
situation.

5. Possible U.S. domestic measures to allevi-
ate the log problem in the Pacific Northwest.

6. Feasibility of expanding sources of log
supplies.

7. Arrangements for annual meetings of
forestry experts.

JOINT U.S.-JAPANESE STATEMENT ^

In accordance with the imderstanding
reached during a meeting in Washington De-
cember 11-13, 1967, representatives of the Goa'-
ernments of the United States and Japan held a
second meeting in Tokyo February 20-22 to dis-
cuss problems relating to the forest products
trade between the two countries.

The United States delegation was headed by
Eugene M. Braderman, Deputy Assistant Sec-
retary of State for Commercial Affairs and
Business Activities, and included representa-
tives of the Departments of Agriculture, Com-
merce, and Interior. The Japanese delegation
was headed by Kiyoliiko Tsurumi, Director of
the Economic Affairs Bureau of the Ministry
of Foreign Affairs, and included representa-
tives of the Ministries of Agriculture and For-
estry, and International Trade and Industry.
Observers from the related industries of both
countries also attended the meeting.

The United States delegation emphasized the
urgency in developing mutually accaptable solu-
tions to deal with the softwood log export prob-
lem in the Pacific Northwest. The Japanese
delegation, while maintaining that there are
many factors other than the export of logs

' For text of a joint statement, see Bulletin of
Jan. 1, 1968, p. 15.

' Issued at Tokyo on Feb. 22 (press release 39 dated
Feb. 23).

contributing to the difficulties of the forest
products industries in that area, expressed
willingness to cooperate to the extent possible
with the United States in an effort to ameliorate
those difficulties.

The two delegations jointly examined co-
operative industry and government efforts to
expand on a competitive basis trade in processed
wootl products and possible adjustment in the
mix of forest products trade between the United
States and Japan to better meet the supply and
demand situation. Parallel with the meeting,
representatives of the private United Stat«s
forest products industry mission visiting Japan
held useful discussions with Japanese trade and
industry representatives on the prospects for
expanding United States processed wood
products sales in Japan.

The Japanese delegation stated that for the
further expansion of forest products trade be-
tween the two comitries it is the intention of
the Japanese Government to encourage imports
on a com]^x;titive basis of processed wood prod-
ucts from the United States. The United States
delegation and industry representatives re-
sponded that every effort would be made to ex-
pand exports of processed wood products on a
commercially feasible basis by better meeting
Japanese price and specification requirements
and by improving collection and shipment
procedures.

It was agreed that through cooperative efforts
of the Governments and industries of the two
countries there could be a substantial increase
in trade of processed wood products.

The United States delegation explained the
measures that were under consideration to as-
sure to the forest prodticts industry of the
United States an adequate supply of softwood
logs on a continuing basis. It indicated further
that it would take into consideration the Japa-
nese need for a continuing supply of logs at a
reasonable level. The Japanese delegation, em-
phasizing the importance of log imports to
Japanese economic well-being, expressed the
hope that no measures would be ta,ken that
would seriously affect the position of its forest
products industries.

The two delegations also discussed the feasi-
bility of expanding sources of log supplies and
agreed to the desirability of giving further
attention to this subject. They also agreed to
initiation of annual meetings of foresti-y experts
of the two countries.

The two delegations agreed that the softwood

MARCH 18, 1968

399

log export problem in the Pacific Northwest
and the rising import needs of Japan for logs
and other wood resources require continuing
and close consultation and cooperation between
representatives of both Govenunents and their
industries.

TREATY INFORMATION

Current Actions

MULTILATERAL

the moon and other celestial bodies. Opened for
signature at Washington, London, and Moscow
January 27, 1967. Entered into force October 10, 1967.
TIAS 6347.
Ratification deposited: Austria, February 26, 1968.

Telecommunications

International telecommunication convention, with an-
nexes. Done at Montreux November 12, 1965. Entered
into force January 1, 1967 ; as to the United States
May 29, 1967. TIAS 6267.

Ratifications deposited: Liechtenstein, December 12,
1967; Sweden, January 8, 1968; Trinidad and
Tobago, Zambia, December 13, 1967; Yugoslavia,
December 22, 1967.
Partial revision of the radio regulations (Geneva,
1959), as amended (TIAS 4893, 5603), to put into
effect a revised frequency allotment plan for the
aeronautical mobile (R) service and related infor-
mation, with annexes. Done at Geneva April 29, 1966.
Entered into force July 1, 1967; as to the United
States August 23, 1967, except the frequency allot-
ment plan contained in appendix 27 shall enter into
force April 10, 1970. TIAS 6332.
Notification of approval: Guinea, December 12, 1967.

J

CofFee

International coffee agreement, 1962, '^th annexes.
Open for signature at United Nations Headquarters,
New York, September 28 through November 30, 1962.
Entered into force December 27, 1963. TIAS 5505.
Accession deposited: Guinea, January 31, 19t>8.

Consular Relations

Vienna convention on consular relations. Done at
Vienna April 24, 1963. Entered into force March 19,

1 QfiT ^

Ratification deposited: Chile, January 9, 1968.
Accessimi deposited: Nigeria, January 22, 1968.

Cultural Relations

Agreement on the importation of educational, scientific
and cultural materials, with protocol. Done at Lake
Success November 22, 1950. Entered into force for
the United States November 2, 1966. TIAS 6129.
Continues to he lound: Malta, January 19, 1968.

Diplomatic Relations

Vienna convention on diplomatic relations. Done at
Vienna, April IS, 1961. Entered Into force April 24,
1964.'

Ratification deposited: Australia, January 26, 1968.
Accession deposited: Tunisia, January 24, 1968.

Optional protocol to the Vienna convention on diplo-
matic relations concerning the compulsory settlement
of disputes. Done at Vienna April 18, 1961. Entered
into force AprU 24, 1964.'
Accession deposited: Australia, January 26, 1968.

Narcotic Drugs

Single convention on narcotic drugs, 1961. Done at
New York March 30, 1961. Entered into force De-
cember 13, 1964. TIAS 6298.
Ratification deposited: Chile, February 7, 1968.

Space

Treaty on principles governing the activities of states
in the exploration and use of outer space, including

' Not in force for the United States.

BILATERAL

China

Agreement amending the agreement of April 9, 1965,
concerning disposition of the New Taiwan dollars
generated as a consequence of economic assistance
furnished to China (TIAS 5782). Effected by ex-
change of notes at Taipei February 2, 1968. Entered
into force February 2, 1968.

Colombia

Agreement amending the agreement of Jime 9, 1965,
as amended (TIAS 5832, 6029), relating to trade
in cotton textiles. Effected by exchange of notes at
Washington February 20, 1968. Entered into force
February 20, 1968.

Ghana

Agreement amending the agreements for sales of agri-
cultural commodities of October 27, 1967 (TIAS
6370), and January 3, 1968. Effected by exchange of
notes at Accra February 9 and 21, 19(>8. Entered into
force February 21, 1968.

Greece

Agreement amending the agreement of July 17, 1964,
as amended (TIAS 5618, 6009), relating to trade in
cotton textiles, with annex. Effected by exchange of
notes at Washington February 23, 1908. Entered into
force February 23, 1968.

Korea

Agreement amending the agreement for sales of agri-
cultural commodities of March 25. 1967 (TIAS 6272).
Effected by exchange of notes at Seoul February 24,
1968. Entered into force February 24, 1968.

Viet-Nam

Agreement amending the agreement for sales of agri-
cultural commodities of September 21, 1967 (TIAS
6351 ) . Effected by exchange of notes at Saigon Feb-
ruary 19, 1968. Entered into force February 19, 1968.

400

DEPARTMENT OF STATE BUIiLETIN

INDEX March IS. 19US Vol. LVlll. No. l.'fOO

Agriculture. Tlii' War on Hunger tHumiihrt'}',
Linowitz) 309

Developing Counties

United States Tolicy Toward International Kf-
forts To Improve Conditions of Commodity
Trade (Solomon) 3S7

The War on Hunger (Humphrey, Linowitz) . . SCtt

Economic Affairs

German-American Economic Interdeiiendence

(McGhee) 3!J2

I Steps Kecommended To Increase Foreign Travel

to United States (Johnson) 307

I United States and Mexico Agree on Fishery Zone

1 Boundaries 3DS

U.S., Japan Hold Second Round of Talks on Soft-
wood Log Trade (Department announcement,

joint statement) 398

I United States Policy Toward International Ef-
I forts To Improve Conditions of Commodity
' Trade (Solomon) 387

Europe. German-American Economic Interde-
pendence (McGhee) 39:i

Foreign Aid. The War on Hunger (Humphrey,
Linowitz) 3C9

I Germany. German-American Economic Inter-

I dependence (McGhee) 392

1 Japan

U.S., Japan Hold Second Round of Talks on Soft-
wood Log Trade (Department announcement,
joint statement) 398

Mr. Vass Named U.S. Member of Ryukyuau
Advisory Committee 398

Korea. Assistant Secretary Buudy Interviewed
on "Meet the Press" (transcript) 37S

Latin America. Understanding In the Home
Hemisphere (Oliver) 384

Mexico. United States and Mexico Agree on Fish-
ery Zone Boundaries 398

, Near East. U.S. Lifts Final Restriction on Travel

) to Middle East 383

I Passports. U.S. Lifts Final Restriction on Travel

to Middle East 383

1 Ryukyu Islands. Mr. Vass Named U.S. Member of

Ryukyuau Advisory Committee 398

Syrian Arab Republic. U.S. Lifts Final Restric-
tion on Travel to Middle East 383

Travel

Steps Retommended To Increase Foreign Travel

to United States (Johnson) 397

U.S. Lifts Final Restriction on Travel to Middle
East 383

Treaty Information

Current Actions 400

United States and Mexico Agree on Fishery Zone
Boundaries 398

Viet-Nam. Assistant Secretary Buiuly Inter-
viewed on "Meet the Press" (transcript) . . . 378

Name Indcv

Hundy, William P 378

Humphrey, A'ice I'resident 369

Johnson, President 397

Linowitz, Sol M 369

JIcGhee, George C 392

Oliver, Covey T 384

Solomon, Anthony M 387

Vass, Laurence C 398

Check List of Department of State
Press Releases: Feb. 26-Mar. 3

Press releases may be obtained from the OflSce
of News, Department of State, Washington, D.C.
20520.

Relea.ses issued prior to February 26 which ap-
pear in this issue of the Bulletin are Nos. 33 of
February l.j ; 34 and 35 of February 16; 36 of
February 20 ; 37 of February 21 ; aud 39 of Feb-
ruary 23.

No. Date Subject

*40 2/28 Re sworn in as Assistant Secretary
for Educational and Cultural A£-

^ fairs (biographic details).

i41 2/26 U.S.-Greece cotton textile agreement.

t42 2/26 U.S.-Japan agreement on cooperation

in peaceful uses of atomic energy.

43 2/28 Restriction lifted on travel to Syria.

*Not printed.

tHeld for a later issue of the Bulletin.

U S. 60VEBNMENT PRINTtNG OFFICE. I9S8

Superintendent of Documents
U.S. government printing office

WASHINGTON. D.C. 20402

OFFICIAL BUSINESS

I

POSTAGE AND FEES PAID
U.S. GOVERNMENT PRINTING OFFICE]

i

THE OFFICIAL WEEKLY RECORD OF UNITED STATES FOREIGN POLICY

THE

DEPARTMENT

OF

STATE

BULLETIN

UNITED STATES, UNITED KINGDOM, AND SOVIET UNION

PROPOSE SECURITY ASSURANCES RESOLUTION

Statement by W'dliain C. Foster Before Geneva Diswnnatnent Conference 401

WHAT KIND OF REVOLUTION IN THE HOME HEMISPHERE?

&y Assistant Secretary Oliver 416

DEPARTMENT EXPRESSES VIEWS ON EAST-WEST TRADE
Stateimnts hy Deputy Under Secretary Bohlen and Assistant Secretary Solomon 421

"A CERTAIN RESTLESSNESS" ABOUT VIET-NAM

by Under Secretary Rostow Ifi5

For Index see inside back cover

THE DEPARTMENT OF STATE

BULLETIN

Vol. LVIII, No. 1500
March 25, 1968

For sale by the Superintendent of Documents

U.S. Qoverament Printing Office

Washington, D.C. 20402

PRICE:

B2 issues, domestic $10, foreign $16
Single copy 30 cents

Use of funds for printing of tins publication
approved by the Director of the Bureau of
the Budget (January 11, 1966).

Note: Contents of this publication are not
copyrighted and items contained herein may be
reprinted. Citation of the DEPARTMENT OF
STATE BULLETIN as the source will be
appreciated. The BULLETIN is indexed in
the Readers' Guide to Periodical Literature.

The Department of State BULLETIN,
a weekly publication issued by the
Office of Media Services, Bureau of
Public Affairs, provides the public and
interested agencies of the Government
ivith information on developments in
the field of foreign rela tions and on
the work of the Departnmnt of State
and the Foreign Service,
The BULLETIN includes selected
press releases on foreign policy , issu4?d
by the White House and the Depart-
ment, and statements and addresses
made by the President and by the
Secretary of State and other offi<:ers
of the Department, as well as special
articles on various pliases of interna-
tional affairs and the functions of the
Department. Infornuttion is included
concerning treaties and international
agreements to ivhich the United
States is or may become a party
and treaties of general international
interest.

Publications of the Department,
United Nations documents, and leg-
islative material in the field of inter-
national relations are listed currently.

United States, United Kingdom, and Soviet Union
Propose Security Assurances Resolution

Statement hy William G. Foster '

I wish to speak today on the question of
security assurances, a subject of vital interest
to many countries. The statements to be made
today by the cochairmen and the representa-
tive of the United Kingdom are, I believe, of
liistoric significance, in terms of both their re-
lationship to the nonproliferation treaty and,
in the longer term, their contribution to inter-
national security and world order.

The United States fully appreciates the desire
of many non-nuclear-weapon states that ap-
propriate measures be taken to safeguard their
security in conjunction with their adherence to
the treaty on the nonproliferation of nuclear
weapons. This is a difficult and complicated
•problem, and we have searched for a solution
that would be practical in a world in which na-
tions have differing interests. We have searched
for a solution which would be credible, and
therefore effective, in the face of unforeseen
circumstances.

We have therefore examined this matter in
the context of action relating to the United
Nations, outside the treaty itself but in close
conjunction with it. This is proper; for it is
the United Nations which is responsible for the
maintenance of international peace and security,
and it is under its charter that each of our
icoimtries has assumed a solemn obligation to
cooperate in the maintenance of peace.

Accordingly, the United States, the Soviet
Union, and the United Kingdom have agreed

' Made before the Conference of the 18-Nation Com-
mittee on Disarmament at Geneva on Mar. 7 (U.S./
U.N. press release 34). Mr. Foster is Director of the
U.S. Arms Control and Disarmament Agency and head
of the U.S. delegation to the conference.

to sponsor a resolution on security assurances
for consideration by the United Nations Se-
curity Council, the organ of the United Nations
bearing the primary responsibility for the main-
tenance of mternational peace and security. We
would propose that the text of the resolution
appear in an annex to our draft report to the
General Assembly, on which report we expect to
consult the Committee shortly.

I shall now read the text of the draft
resolution :

The Security Council

Noting with appreciation the desire of a large num-
ber of States to subscribe to the treaty on the non-
proliferation of nuclear weajjons, and thereby to
undertake not to receive the transfer from any trans-
feror whatsoever of nuclear weapons or other nuclear
explosive devices or of control over such weapons or
explosive devices directly, or Indirectly; not to manu-
facture or otherwise acquire nuclear weapons or other
nuclear explosive devices ; and not to seek or receive
any assistance in the manufacture of nuclear weapons
or other nuclear explosive devices,

Taking into consideration the concern of certain of
these States that, in conjunction with their adherence
to the treaty on the non-proliferation of nuclear weap-
ons, appropriate measures be undertaken to safeguard
their security.

Bearing in mind that any aggression accompanied
by the use of nuclear weapons would endanger the
peace and security of all States,

1. Recognizes that aggression with nuclear weapons
or the threat of such aggression against a non-nuclear-
weapon State would create a situation in which the
Security Council, and above all its nuclear- weapon
State permanent members, would have to act Im-
mediately In accordance with their obligations under
the United Nations Charter ;

2. Welcomes the intention expressed by certain
States that they will provide or support Immediate
assistance, in accordance with the Charter, to any
non-nuclear-weapon State party to the treaty on the
non-proliferation of nuclear weapons that is a victim

MAKCn 25, 1968

401

of an act or an object of a threat of aggression in
which nuclear weaiions are used ;

3. Reaflirms in particular the inherent right, recog-
nized under Article 51 of the Charter, of individual
and collective self-defense if an armed attack occurs
against a member of the United Nations, until the
Security Council has taken measures necessary to main-
tain international peace and security.

This Security Council resolution will lay a
firm political, moral, and legal basis for assur-
ing the security of nonnuclear countries.

In addition, Mr. Chairman, it will be noted
that a key paragraph of this i-esolution envis-
ages declarations of intention in support of the
provision of assurances to parties to the treaty.
Accordingly, the Government of the United
States will make a declaration of its intention
in conjunction with Security Council action on
the resolution. This statement, together with
declarations that will be made by other states,
will give increased significance to the action
of tlie Security Council.

In its statement the United States will take
note of the desire of states adhering to the
nonproliferation treaty to have appropriate ac-
tions undertaken to safeguard their security and
will affirm that any aggression accompanied by
the use of nuclear weapons would endanger the
peace and security of all states. The United
States will declare that aggression with nuclear
weapons, or the threat of such aggression,
against a non-nuclear- weapon state would create
a qualitatively new situation. We will declare
that in this situation the nuclear-weapon states
whicli are permanent members of the United
Nations Security Council would have to act im-
mediately through the Security Council to take
the measures necessary to counter such aggres-
sion or to remove tlie threat of aggression in
accordance with the United Nations Charter.
The charter calls for taking "effective collective
measures for the prevention and removal of
threats to the peace, and for the suppression of
acts of aggression or other breaches of the
peace."

Tlie United States will declare, therefore, that
any state whicli commits aggression accom-
panied by the use of nuclear weapons, or which
threatens such aggression, must be aware that
its actions are to be countered effectively by
measures to be taken in accordance witli the
United Nations Charter to suppress the aggres-
sion or remove tlie threat of aggression.

In addition, Mr. Chairman, tlie Government

of the United States will in its declaration affirm
its intention, as a permanent member of the
United Nations Security Council, to seek im-
mediate Security Council action to provide as-
sistance in accordance with the charter to any
non-nuclear-weapon state party to the treaty
on the nonproliferation of nuclear weapons that
is a victim of an act of aggression or an object
of a threat of aggression in which nuclear weap-
ons are used.

The United States will reaffirm in particular
the inherent right recognized under article 51
of the charter of individual and collective self-
defense if an armed attack, including a nuclear
attack, occurs against a member of the United
Nations, until the Security Council has taken
measures necessary to maintain international
peace and security.

The United States will also indicate that its
vote for this resolution and its statement of the
way in which the United States intends to act in
accordance with the Charter of tlie United Na-
tions are based upon the fact that the resolution
is supported by other permanent members of the
Security Council who are nuclear-woapon states
and are also proposing to sign the nonprolifera-
tion treaty. The declaration of the United States
will state that our vote for this resolution is
based on the fact that these states have made
similar statements as to the way in which they I
intend to act in accordance with the charter.

Mr. Cliairman, I believe it is fair to say that
there have been few days in the life of this Com- i
mittee as important as this one. The full sig-
nificance of the Security Council action we are']
proposing must be seen in the light of the pres-
ent world situation. It reflects the determination >l
of the nuclear- weapon states which intend to
become parties to the nonproliferation treaty
to have assistance provided in accordance with
the Cliarter of the United Nations to any party
to the treaty which is a victim of an act of ag-
gression or the object of a threat of aggression
in which nuclear weapons are used. This action
will enhance the security of all parties to the
treaty, and in particular of those who find them-
selves confronted by a direct nuclear threat to
their security. It is in the light of these con-
siderations that the governments of all members:,
of this Committee will want to give careful y
study to the statements made here today.

The action we contemplate for the Securitylj
Council will, we believe, constitute a heartening

402

DEPARTMENT OP STATE BITLLETIN

reafllnnation of the basic purpoge of the United
Nations and of tlie responsibility of tlie Secu-
rity Council for the maintenance of peace. The
achievement of a nonproliferation treaty and
the implementation of the proposal on security

assurances set forth today will mark a turning
point in man's efforts to achieve a firmer basis
for lasting peace and international security in
a world in which man will be the master, rather
than the victim, of the atom.

•'Great Power Involves Great Responsibility"

Following arc excerpts from remark'^ made hy
President Johnson, at Marietta, Ga., at a rollout
ceremony for the new 0~5A cargo plane on
March 2.

White Uouse press release (Marietta, Ga.) dated March 2

It was about 23 years ago this very month,
less than 100 miles from where we are standmg
today, an American President wrote the last
words of his life — for a speech that he never got
to deliver. His words carried counsel for his
I country as it was just emerging from world war
and surveying its new obligations.

Franklin Roosevelt's final paper, written
at Warm Springs, Georgia, contains this great
message that we could all well afford to remem-
'ber:". . . great power," he said, "involves great
responsibility."

In the troubled time since those days, xVmerica
has learned much about strength and a great
deal al)out responsibility.

We have come here this morning for the
rollout of a new era in our nation's strength.

The exciting adventure which produced this
plane began just a few years ago.

America was then developing its capacity to
meet any danger that threatened it. One critical
element was very much missing. Our country
just could not move a fighting force quickly
over long distances. Now, with this plane, this
'crucial need is met.

'j On such an occasion it is well to look back
over the development of our awesome strength
land the responsibility that that strength has
placed upon all of us.

The gtms of World War II had hardly si-
lenced when this country made the historic com-
mitment that binds us today.

In the wake of war, we were the only real
eft'ective force left in the free world. The road
that we set out to travel was without precedent
or parallel in all our history. Before then, mili-
tary strength had always cleared a path to em-
pire.

We pledged our strength to work with others
to deter aggression and to help build the insti-
tutions of peace. Our strength became a shield
behind which men could find their way back to
stability — and some could begin the long work
of freedom and justice for their people.

The road has not been an easy one for Amer-
ica. The exercise of strength has brought an-
guish to the Nation when her sons have had to
fight in distant places, as many are fighting
today.

But looking back over the long road that we
have come, we can ask : Wliat other road could
America have traveled? How would history
judge us if we sat by and let freedom die be-
cause we feared to use our strength in freedom's
defense ?

Since Franklin D. Roosevelt, four Presidents
have kept America's course firm.

An entire generation of Americans have sup-
ported them in the decision to walk the path of
responsibility, in partnership with our friends
and our allies. Since we have never used our
might for empire, we never measure our effec-
tiveness in conquests.

— We see its success in the fact that a third

MAKCJI 25, ]9fiS

403

world war, so freely predicted just 10 years ago,
has not inflamed the globe— at least as yet.

^\Ve see success in a Europe that was once

in shambles and is now vital, progressive, and
growing strong.

—We see it in a Latin America which once
faced the threat of complete Communist take-
over—they actually still have Cuba. It now has
an opportunity— the other nations in this hem-
isphere— to grow in freedom.

—Violence has flamed in new states in Africa,
but many of them today are moving toward

stability. . , -rr- . tvt

—In Asia the agony of battle m the Viet-Nam
nation, where so many of our people are stand-
ing now, clouds the fact of progress in that area.
In Viet-Nam itself a people under savage at-
tack from outside aggression have held three
elections, have adopted a Constitution, have
elected a President, a Vice President, a Senate
and a House, and are slowly— if with great dif-
ficulty—building a nation, despite the enormous
destruction that is being imposed by an outside
aggressor.

These are the rewards of the responsible use
of strength for more than 20 years by responsi-
ble men.

Today we are no longer alone m strength
among our friends. But United States strength
is still essential to the preservation of peace and
freedom and order in this world. Without
United States strength, the forces of aggression
would triumph and the security of the United
States would be imperiled— as surely as it was
when we faced the danger just a few years ago
across a ravaged Europe.

Then our responsibility was new and it was
uncertain. Today we know its cost. But we also
know the much larger cost that we would pay
if we cut and ran, or if we turned our back, or
if we sought the easy way of appeasement.

Letters of Credence

India

The newly appointed Ambassador of the Ee-
public of India, Ali Yavar Jung, presented his
credentials to President Johnson on March 5.
For texts of the Ambassador's remarks and the
President's reply, see Department of State press
release dated March 5.

Israel

The newly appointed Ambassador of the
State of Israel, Yitzhak Rabin, presented his
credentials to President Johnson on March 5.
For texts of the Ambassador's remarks and the
President's reply, see Department of State press
release dated March 5.

Nigeria

The newly appointed Ambassador of the Fed-
eral Republic of Nigeria, Joe lyalla, presented
his credentials to President Johnson on March
5. For texts of the Ambassadors remarks and
the President's reply, see Department of State
press release dated March 5.

Panartm

The newly appointed Ambassador of the Re-
public of Panama, Jorge T. Velasquez, pre-
sented his credentials to President Johnson on
March 5. For texts of the Ambassador's re-
marks and the President's reply, see Department
of State press release dated March 5.

Somali Republic

The newly appointed Ambassador of thei
Somali Republic, Yusuf Omar Azhari, pre-
sented his credentials to President Jolmson on
March 5. For texts of the Ambassador's remarks
and the President's reply, see Department of
State press release dated March 5.

404

DEPAKTMENT OF STATE BDLLETIS|

"A Certain Restlessness" About Viet-Nam

iy Eugene V. Rostow

Under Secretary for Political Affairs '

In his state of the Union message, President
Johnson remarked "in the land a certain rest-
lessness— a questioning." In one sense, we are
always a restless, questioning people, never
satisfied with things as they are and generally
skeptical of our public men. But there is a
particular urgency in our restlessness and ques-
tioning this year. It arises, the President sug-
gested, "Because when a great ship cuts through
the sea, the waters are always stirred and
troubled."

TVe all understand, I think, how the Presi-
dent's metaphor applies to our domestic affairs.
The progress we are making toward equality for
the Negro revives pains which are older than
the Nation.

I propose tonight to talk about the other
dimension of our restlessness and questioning:
Viet-Xam and the challenge it presents to every
American's notion of our country and its role
in the world.

The debate over Viet-Nam is one of a series
we have had with each other about what na-
tional security requires of us in world politics.
One round took place after the First World
War, when we repudiated President Wilson and
sought refuge in the 19th century. Another oc-
curred during the thirties, when we refused to
believe that Hitler and his allies threatened the
safety of the United States. President Truman
faced a third stage of the argument, over the
Truman doctrine, the Marshall Plan, and the
hostilities in Korea.

Now we are engaged in another cycle of the
same effort to accept the facts of life in the sec-
ond half of the 20th century. It is necessarily a

'Address made before the Indianapolis Junior
Chamber of Commerce at Indianapolis, Ind., on Jan.
26 (as-delivered text; for advance text, see press re-
lease 20).

difficult process, requiring a confrontation be-
tween reality and cherished concepts of self
built up over generations. It takes a high level
of moral imagination to realize that the world
no longer corresponds to images and ideals
which are a powerful part of our collective
memory. The tradition of isolation, enslirined
in President Washington's famous Farewell
Address, is deep in our national psyche. Viet-
Nam is difficult for us, I suggest, because it re-
quires lis finally to conclude that our old isola-
tionist vision of ourselves as a nation apart,
one among the many, is no longer relevant.

Our four Presidents since 1945 have faced a
task completely new in American history: the
necessity of major involvement in world poli-
tics. It is a task for which we were not prepared
either by our educational methods or by our
national experience.

Until 1914 we could and did ignore the
problem of national security. Our foreign pol-
icy dealt only with peripheral affairs: We had
no voice in the central problems of world poli-
tics. We lived in a reasonably stable world
where the balance of power was maintained by
the principal European nations.

American public opinion was unaware of the
forces guarding our security. A professor would
have been hooted down for pointing out that the
safety of the Republic and even the Monroe
Doctrine depended on the British fleet. And a
politician's career would have come to an end
if he were suspected of such a subversive
thought. In the American language, "power
politics" and "the balance of power" are reac-
tionary ideas evokiiig all that is evil in imperial-
ism.

Tlie historical conditions which promoted
these illusions came to an end in 1917. Belatedly
we intervened in the First World War to pre-
vent a threatening hegemony in Europe. But

MARCH 25, 1968

405

after tlie war we took refuge in the past — as
soon as possible and all too soon. All through
the 1920's and 1930's our isolationism kept
America from doing what was necessary to pro-
tect its own security. As a result, Hitler's power
could not be contained; our influence was not
felt in time to head off the Second World War.

By 1945, the Concert of Europe had gone the
way of IIumpty-Dumpty. It had prevented gen-
eral war for a century before 1914. But the na-
tions of Europe were exhausted by two wars and
by the tragedies and follies of the years between
the wars. Vast new powers and new political
forces were emerging in the world. Russia,
China, Japan, and the United States were coun-
tries on a new scale. The nuclear weapon had
been born. Time had transfonned the problem
of equilibrium. It was altogether beyond the
reach of the old entente.

We came to imderstand, but not quite to ac-
cept, the fact that in the small, unstable nuclear
world in which we have no choice but to live,
the security of the United States depends on
maintaining a tolerably stable balance of power
not merely in the Western Atlantic, in Europe,
and in the hemisphere, but in the world as a
whole. And we began to perceive as well that if
the security of the United States was to be
protected, we were gomg to have to undertake
a major part of the job ourselves.

This fact has determined both the tasks we
have had to imdertake abroad since the war and
the recurrent spasms of domestic political con-
flict we have experienced in facing them.

For many Americans, our international exer-
tions since 1945 have been accepted as tem-
porary and transitional efforts. They tend to
think the First World War was an aberration
and the Second a unique phenomenon caused by
Hitler. If we did a good enough job with the
Marshall Plan and aid programs and fended
off aggression in Berlin, Greece, and Korea,
the Soviets and the Chinese would come to ac-
cept the reasonableness of peaceful coexistence ;
Europe, the Middle East, and Asia would re-
cover their capacity to defend themselves; then
we could bring the boys home and return to
"normalcy."

The Presidency of Lyndon B. Johnson marks
the end of these illusions. We see that the world
we have known since 1945 is not a temporary
period of postwar disturbance but our normal
condition, at least until rules of peaceful co-
existence can be accepted and new groupings
formed to guarantee them. And we realize fi-

nally that it will take a long time and a great
deal of patient, restrained effort to create a
system that might effectively maintain order in
a world that contains so many breeding grounds
for hostility and violence and so many invita-
tions to aggression.

This is the root of the revulsion of public
opinion about Viet-Nam which President John-
son has had to confront. Other aspects of the
war in Viet-Nam heighten the feeling of revul-
sion : the distaste for bombing as a form of war-
fare and for any conflict between a small country
and a big one. But the decisive element in Amer-
ican concern about Viet-Nam is resistance to the
bleak fact with which the President lives every
day : the fact that the protection of our national
security requires not a sprint, a one-shot effort,
followed by the relief of a withdrawal, but a
permanent involvement in the politics of every
part of the globe based on a strategy of j^eace
that seeks to achieve order and to make progress
possible.

The Necessity To Resist Aggression

We are in tJie process of accepting these facts
with our feelings as well as our minds. The ne-
cessity to resist aggression when it concerns the
general equilibrium does not require us and our
allies to be the universal policemen of the world.
There are many conflicts which do not involve
the risk of confrontation with the Soviet Union
or with Communist China or otherwise threaten
our national interests or the world balance of
power. But the struggle in Viet-Nam, like
earlier probes in Greece, in Iran, in Turkey, in
Berlin, and in Korea, does concern the overall
relations between the free world and the Com-
munist states. These probes occur at the bound-
aries of the two systems. Change there could
trigger chain reactions and call into question
the credibility of the wliole network of security
arrangements on which tlie hope of world order
depends. Until the Soviet ITnion and China can
be persuaded to accept the principle of live-and-
let-live, we shall have to continue to be vigilant
and organize coalitions of peace in each region
of the world to lielp resist aggression, direct or
indirect, whatever its form.

Our obligation to act in this sense is an obli-
gation we owe to ourselves, not to others. It is
an obligation to protect our national security in- ^
terest in preserving — in creating — the only kind
of world in which we ourselves can flourish, a
woi-ld of peace and of wide horizons, committed

406

DEPARTMENT OF STATE BULLETIN

to pro<rro?s and based on the aspiration to seek
the freedom of man as a good in itself.

This interest does not require the elimination
of any social or jjovernnicntal system in the
world which is unlike our own. AVe are not en-
gaged in an ideological crusade. We have no
quarrel with communism in China nor in North
Viet-Nam. "We could live with these realities as
we do with the reality of communism in the
Soviet Union. We have not made, and do not
wish to make, an enemy of any state because its
social sj'stem is difTerent from ours. The menace
to peace is aggression, not ideology.

It is not remarkable that it has taken time for
us to accept this truth. Our isolationist tradition
rebels at the very idea. It resisted President
Roosevelt's efforts to persuade the American
people that thei-e could not be a free "fortress
America" in a world dominated by totalitarian
and expansionist Axis Powers. After the Sec-
ond World War ended. President Truman saw
there could be no turning back. Another aggres-
sive power was on the scene, and there was no
hiding place for us. President Truman had the
courage to present these realities to a nation
in the face of 150 years of contrary tradition.
In place of "no entangling alliances," he built
XATO : in place of classical precepts about self-
reliance, he developed the Marshall Plan and
Point 4 programs of aid. Alliances and economic
assistance have be«n part of the program of
every administration. Republican and Demo-
cratic, ever since.

We adopted NATO and the Marshall Plan
because we knew that a gross imbalance of
power existed between the European states and
the Soviet Union. Left to itself, Europe would
have been neutralized and reoriented, at the
least. In our own interest, we provided enough
American military power and economic assist-
ance to rebuild Europe and a more stable
balance of power.

Threat of Expansionism in Asia

The same principle of equilibrium applies to
the Pacific as well as to the Atlantic. We have
been a Pacific power, after all, longer than we
have been one in the Atlantic. Commodore Perry
took his famous voyage to Japan at a time when
we regarded European politics with aversion,
as a game far from our concerns.

In Asia today, new nations have emerged
from the chrysalis of empire, and old nations
are pursuing new goals. Most of them are

militarily weak. Many are vulnerable to sub-
version as well as to invasion.

They are pursuing programs of moderniza-
tion with varying degrees of success, and social
goals as diverse as the peoples themselves. They
are also beginning to establish relationships
with each other for purposes of development.
The road which stretches out before these
nations is not an easy one. If an open and stable
world order is to be achieved, their independence
and security are of fundamental importance.

Unfortunately, there are forces which would
deny these nations even the chance of advancing
in their own ways. Practically all of the .states
of Southeast Asia have experienced a threat
from a power or group of powers which do not
welcome this development in diversity. They
are in the shadow of expansionist powers who
can see only one path for development — the
dreary road of communism — and who do not
hesitate to use every weapon available to force
others to follow this road. The imbalance in
power between these states and the world of
Asian communism is considerable — and meas-
ures their danger.

In the north of Asia, to be sure, a considerable
degree of balance has already been restored,
especially in terms of social stability and eco-
nomic strength. Japan is the world's third
industrial power; Taiwan is no longer in need
of our economic assistance; and South Korea
is rapidly becoming a progressive industrial
state. Each is a community capable of with-
standing anything short of external aggression.

Thus our programs of economic assistance in
the area have diminished. INIilitarily too, the
balance in Northeast Asia has been somewhat
restored. Local forces have taken over much of
what was once our almost exclusive responsi-
bility for the defense of the area. But North
Korean attacks on South Korea have increased
in number and boldness during the last year.
This pattern and the capture of the U.S.S.
Puehlo a few days ago raise new issues of
security for the United States, for Japan, and
indeed for the whole free world.

But in the south of Asia, the situation is dif-
ferent. Militarily, the disparity of power be-
tween the free nations and those under Com-
munist control is far greater in Southeast Asia
than in the North Pacific. Most of the countries
of Southeast Asia are not making economic
progress comparable to tliat of Japan or Tai-
wan. And they have not yet achieved the degree

407

of internal stability and cohesiveness which
would make guerrilla in-urgencies prohibitively
difficult. On the contrary, Southeast Asia has
become the testing ground for the strategy of
aggression which the Communists call "wars of
national liberation."

In the "national liberation war," or giierrilla
insurgency, the expansionist powers of Peking
and Hanoi have found a formidable weapon,
and with it they have placed the nations of
Southeast Asia in peril. In this effort Hanoi, at
least, has had the steady support of the Soviet
Union. Without outside help, not even the most
determined of the free governments of South-
east Asia could long resist the. combination of
external pressure and internal Communist sub-
version. Indeed, as most of them frankly recog-
nize, there would be no point in resisting such
pressure singlehanded. If this strategy should
succeed, most of Southeast Asia would soon be
under the control of one or another of the Com-
mimist sects — which one hardly matters. Han-
oi's would be just as oppressive to the Lao or
Cambodian as Peking's to the Burmese or
Malaysian. India, Indonesia, and the Philip-
pines would confront grave dangers. And, fac-
ing us, an alliance of Peking and Hanoi and
other states in their pattern would be quite as
hostile and quite as closed to us as any single
concentration of power over the same area. The
United States would be confronted, in a con-
tracting world of jets and missiles, with the
threat of a hostile Asia— a threat comparable at
least in potentialities to the threat we recog-
nized 30 years ago as a grave menace to our own
security.

The Essential "Why" of Vief-Nam

The conflict in South Viet-Nam is not a civil
war but an attack from without disguised as a
civil war. But even if we consider the conflict
against the Government of South Viet-Nam as
a civil war, the regime in North Viet-Nam and
other governments have no right to assist the
rebels. International law has been clear for cen-
turies that wliile friendly governments have a
right to assist a government in putting down a
rebellion, it is an act of war against that gov-
ernment to give support to an insurrection
against it. When France helped the American
revolutionaries, she was thereby committing an
act of war against Great Britain.

The SEATO Treaty of 1954'' defined the
danger of such attacks as a risk the signatories
were determined to prevent — a danger to the se-
curity of each of them and to the general peace.
It declared : "Each Party recognizes that ag-
gression by means of armed attack in the treaty
area against any of the Parties . . . would
endanger its own peace and safety. . . ." And
it committed the United States to join with the
other signatories in developing "their indi-
vidual and collective capacity to resist armed
attack and to prevent and coimter subversive
activities directed from without against their
territorial integrity and political stability."

This commitment does not mean that we must
hold military bases everywhere, nor does it re-
quire intervention everywhere and anywhere in
the area. Indeed, our willingness to assist, if it
remains credible, is the best assurance that we
and the Asian peoples themselves can have that
the point of physical intervention will not be
reached. If both the smaller free nations and
the Communist states are convinced that the
United States can and will honor its SEATO
obligations, each of the free nations of South-
east Asia should be able to face up to Hanoi
and Peking and deal with its own internal prob-
lems, including insurgency. This process is, in
fact, underway today — in Burma, in Indonesia,
in Thailand, Malaysia, and the Philippines, in-
deed, even in Cambodia. Attacks are being con-
tained and resisted without the involvement of
U.S. combat troops in these countries. It will
continue to happen — because the Asians want it
to — as long as our willingness to assist remains
intact and credible. That credibility is what is
being tested in the bitter, tragic fighting in
Viet-Nam today.

This is the essential "why" of Viet-Nam. We
are not there because of willful or whimsical acts
on the part of Lyndon B. Johnson, John F. Ken-
nedy, or Dwight D. Eisenhower. We were
obliged to draw the line in South Viet-Nam not
only by the SEATO Treaty, but because suc-
cessful aggression against South Viet-Nam
would lead to basic change in the world balance
of power. The SEATO Treaty recognizes the
reality. It does not create it. The interests we are
defending in Viet-Nam, like those we defended
in Greece, Berlin, and Korea, are national inter-
ests in a system of world order. They are exactly

" For text, see Bulletin of Sept. 20, 1954, p. 393.

408

DEPARTMENT OF STATE BULLETIN

the same as the interests which led us to say
"Thus far, and no farther" in Western Europe
and Korea.

Many who supported Government policy in
Europe and in South Korea elect not to sup-
port it in Viet-Nam. That comfortable option
is not open to those who bear responsibility for
the safety of the United States.

The Enemy in Vief-Nam

There are differences between tlie attack on
South Korea and the attack on South Viet-Nam.
The campai<rn in Viet-Nam is a political-mili-
tary war, a "war of national liberation," novel
in conception and in tactics, and requiring an
effort on our part, unlike any we have ever made.

But the difference in tactics between Korea
and Viet-Nam does not conceal the identity of
strategy. The attack on South Viet-Nam is an
attempt to unify one of the countries left
divided by the cold war. Its political significance
is the same as that of similar attempts to change
the status of Berlin or Germany or Korea by
force. It is an act which calls into question the
possibility of peaceful coexistence.

Let us, then, recognize our enemy for what he
is and what he is not. It is, it seems to me, the
lack of clarity on this point which is one of the
most serious obstacles to general public under-
standing of our effort in Viet-Nam.

Our enemy in Viet-Nam is aggression con-
ducted by a Communist govermnent and sup-
ported by other Communist governments. In
Viet-Nam, in Laos, and in parts of Thailand,
this aggression is directed by Ho Chi Muih,
the leader of North Viet-Nam. In Burma, in
Malaysia, in Indonesia, and elsewhere, insur-
gencies are directed by China itself. Peking and
Hanoi are allies; that arrangement is, after all,
just as possible in the Communist world, divid-
ed as it is, as in the free world.

No one pretends that Hanoi is a satellite of
Peking. But neither is it a rival — much less, as
some of our friends would like us to believe,
a bulwark, or even the only bulwark, against
Peking's expansion. Of course. Ho Chi Minh
wants to be master in his own house — which he
sees as being all of Indochina. And Chairman
Mao has no reason to dispute it. Ho, on the
other hand, is unlikely to object to Chinese
domination over other parts of Asia. So they
are a team. They share the same weapons; the

"national liberation war" is an integral part of
the catechisms of both Peking and Hanoi.
Therefore when we assist an Asian country,
South Viet-Nam, in resisting this aggressive
weapon when wielded by Hanoi, the lesson is
not lost in Peking.

So much, then, for the war as it relates to the
question of China. Wliat about Hanoi itself,
what about Ho Chi Minh? No one denies he is
a Vietnamese nationalist. Indeed, his resistance
to the French will always insure him a place in
his coimtry's history — just as we have not for-
gotten the early heroism of General Benedict
Arnold. Both betrayed the nationalist spirit
which gave them their place in history. Benedict
Arnold distrusted American nationalism and
went back to the British. Ho Chi Minh distrusts
any Vietnamese nationalism other than his own
and has therefore tried to subject it to his own
Communist system. Just as there was no Conti-
nental soldier who was not proud of having
fought under General Arnold at the battle of
Saratoga, so, too, there is no Vietnamese nation-
alist who will not admit with pride to having
been with the Viet Minh in 1946 or even '49.

But the Vietnamese nationalists were be-
trayed. They came to realize that Ho Chi Minh
was not fighting to gain for the Vietnamese the
right to choose their own future but was fight-
ing, fii'st and foremost, to impose one specific
system on Viet-Nam, a system which few Viet-
namese understood and fewer still supported —
the system we call communism. So determined
was Ho that this system prevail that by 1951 he
had excluded the last non-Communist national-
ists from the Viet Minh leadership. At that time,
too, the last of the genuine nationalists support-
ing Ho left the Viet Minli. These men are among
the finest leaders, from army officers to hamlet
chiefs, the free people of Viet-Nam have today.

In 1955 Ho Chi Minh gained control of the
northern half of his country. His intolerance
for everything Vietnamese not cast in his own
mold soon showed itself. By the conservative
estimate of the late Professor Bernard Fall, no
less than 50,000 Vietnamese lost their lives so
that Ho might consolidate his power. Twice that
number were sent to concentration camps. Other
estimates place the toll in purges much higher.
At least 840,000 people left the country alto-
gether— not because they didn't love their
homes, not because they didn't want independ-
ence, not because they loved the French or Ngo

409

Dinli Diem, but because Ho Chi Minh allowed
no place for them in his Viet-Nam.

In the South of Viet-Nam, a nationalist re-
public under Njro Dinh Diem was founded. The
two Viet-Nams began their existence. Under the
Geneva accord, there was to be a referendum
before 1956, through which the people would
freely express their will as to the possibility of
reunification. But Ho Chi Minh refused to con-
sider allowing a free election in North Viet-Nam
as required by the Geneva agreement. In the
face of this breach of the accord, the Govern-
ment of South Viet-Nam refused to acquiesce
in the holding of an election. Under these cir-
cumstances, facing a guaranteed vote of 99 per-
cent for Ho Chi Minh in the more populous
North, a referendum was an option the South
could not consider.

There is a steady drumbeat of criticism
against this decision as a "violation" of the
Geneva agreement. That criticism seems mis-
directed. The true breach of the agreement was,
and is, North Viet-Nam's refusal to allow free,
secret balloting under international supervi-
sion. The failure to hold elections, even if it had
been the responsibility of South Viet-Nam,
would not justify recourse to war, any more
than Communist refusal to hold elections in
Germany and Korea would justify us in unit-
ing those countries by force.

Hanoi's Control of the Viet Cong

At this point, once again Ho Chi Minh had
a choice. He miglit have recognized that while
the social systems of the two Viet-Nams con-
flicted, the economies of the two states com-
plemented each other. Following the interests
of the whole Vietnamese people, he might have
adopted a policy of coexistence with the South,
of commercial exchanges, of free travel between
the two new political entities. As a nationalist,
in short, he might have permitted all tlie Viet-
namese, not only those he could control, to
cooperate in a number of ways — that is, to co-
exist peacefully. As an Asian, he might have
made his contribution to the peaceful develop-
ment of the entire region. But for Ho Chi Minh
there is no coexistence. For him, there could not
be the kind of relations which now exist between
Tito's Yugoslavia and her "capitalist" neigh-
boi-s Austria and Italy, for example.

Rather, Ho chose to follow Mao Tse-tung. He
rejected the national interests of his people, and
pressed on with his dream of communizing

them — and all of what was once French Indo-
china. He did not pursue this goal by setting
up a legitimate Socialist or Communist party
in the South, to vie openly for the people's sup-
port in a democratic way. Like Mao, he feels that
politics comes better from the barrel of a gun.
Following Mao's textbook, he instructed some of
his followers to hide arms and to hide them-
selves among the people of the South until the
time came. Othei's of his followers he summoned
to the North. He trained them, and in a few
years they were returned to the South as his
stay-behind followers were instructed to take
up their weapons.

These were the beginnings of the Viet Cong ;
not as a simple foreign invasion army but equal-
ly not as a group of popular agrarian reformers
who wanted only to free their land from foreign
domination.

From the beginning, the Viet Cong leader-
ship has operated for, and under the command
of, the government of North Viet-Nam. Today,
Hanoi controls the Viet Cong, and their "gov-
ernment," the National Liberation Front,
through tlie Central Office for South Viet-Nam
(COSVN), which is a part of the North Viet-
namese government structure. The People's
Revolutionary Party, which dominates the
front, is likewise under the control of the Lao
Dong, or Labor Party, which is the Communist
party of North Viet-Nam. Overall command of
the Viet Cong troops is in the hands of a North-
ern Regular Army general. Northern army
units not only fight with the Viet Cong but are
used to beef up decimated "southern" Viet Cong
units. Equipment and supplies come from the
North, and in abundance.

The Viet Cong "Infrastructure"

This, then, is the role of Hanoi in the Viet-
Nam struggle. But, this point being made, let
us not forget that tiie Viet Cong also has roots
deep in the soil of South Viet-Nam. No respon-
sible observer of South Vietnamese politics has
doubted the existence of considerable Commu-
nist strength. It is not a large voting strengtii ;
no estimate runs as high as 20 percent. But it is a
powerful revolutionaiy force — a force of terror
and intimidation, and a military body capable
of inflicting political and military damage.

Tliis Viet Cong infrastructure, which is the
heart of the problem in Viet-Nam, remains en-
trenched in cities, hamlets, and villages through-
out the country, openly in some, elsewhere in

410

DEPARTMENT OF STATE BULLETIN

competition with the Government, and dormant
or dead in an increasing number of others. As
long as the infrastructure remains, the war in
Viet-Nam will not be won. When it is destroyed
or dissolved, victorj* in Viet-Nam will be as as-
sured as the victory over guerrillas in Malaya
or that in Korea.

"^Hiat is this infrastructure, and why is it
there? First of all, it is clear that the Viet Cong,
that is to say, the indigenous South Vietnamese
who are fighting for Ho Chi Minh and his sys-
tem, comprise a well-organized but- — and I
stress this — a small minority of the Vietnamese
people.

This fact is sho-\vn by the recent elections,
which were held in areas containing fully 75 per-
cent of the South Vietnamese people. These
areas, jou may note, extended well beyond those
in which resides the population nonnally con-
sidered under Government protection — roughly
67 percent at this pomt. In other words. South
Vietnamese officials took some risks to extend
the franchise even to people they knew to be
under some active Viet Cong influence. In those
elections, close to 60 percent of the entire adult
population of South Viet-Nam, regardless of
control or political affiliation, expressed their
loyalty to the South Vietnamese state by voting
for one of 11 candidates running under the Con-
stitution. They voted in the face of direct Viet
Cong orders not to do so, boycott orders backed
up by 190 Viet Cong-inspired political murders
during the 2 weeks preceding the election. And
who is to say how the 25 percent of the popula-
tion whom the Government could not reach at
registration and election time would have voted
if they had been free to do so ?

How can tlie Viet Cong minority continue to
have the grip on the country it has — with
roughly 17 percent of the peoi^le under its di-
rect control, a similar percentage under contest
with the Government, and some adherents in the
urban centers under direct Government control ?
It has the grip, first of all — in the historical
sense, at least — because it pretends to answer the
legitimate grievances of the peo]5le, grie\'ances
to which they think past governments of Viet-
Nam — mandarin, colonialist, Diemist, and
putschist — were indifferent, to say the least. Be-
cause of these grievances, the Viet Cong were
able to gain the support of manj' people, includ-
ing some who are not Communists.

The South Vietnamese Government has be-
gun to take significant steps to deal with these
grievances. We are assisting them in these ef-

forts, and we are encouraging them to expand
and accelerate their programs of social action.
I shall describe some of them in greater detail
later. The point I would make now is that the
"grievance factor," if you will, the degree to
which the Viet Cong support is based upon
popular discontent, is, by every measure we
have, constantly declining. It is declining be-
cause, on the one hand, local and national au-
thorities are making concrete efforts to meet
popular aspirations. On the other hand, it is
declining because the Viet Cong have become
demonstrably less and less able and indeed less
and less interested in carrying out the promises
which once brought them a degree of popular
support.

Growing Brutality and Terrorism

As the "grievance factor'' declines in signifi-
cance, the element of terrorism correspondmgly
grows in importance in Viet Cong tactics. We
are all familiar with Mao Tse-tung's metaphor
of the guerrilla as "a fish in the water." "Wlaat
this means is basically that the guerrilla should
remain in a friendly natural environment, draw-
ing his support from it but in no way harming
or molesting it. How different this is from to-
day's realities. The image of the pajama-clad
guerrilla sharing a bowl of rice with a friendly
peasant family scarcely exists today. It has been
replaced by that of a uniformed and heavily
armed foreign army, five divisions strong, which
can find enough food and enough porterage
only by making levies upon the population,
levies which resemble the demands of medieval
lords far more than the simple requests of pro-
gressive reformers.

Viet Cong "friendly persuasion" was never
really tliat. I have mentioned Chairman Mao's
dictum that "politics grows from the barrel of
a gun." At one time, perhaps, the Viet Cong
tried somewhat harder not to wave their guns
imder the noses of their hearers as they "per-
suaded" them. Now the scene is different. It may
be characterized by the recent massacre at the
refugee village of Dak Son.

I do not recall Dak Son to you because of the
particular horror of the 252 civilians who were
systematically destroyed there by Communist
flamethrowers and grenades. This is a bloody
episode — but the figure I gave you is 66 less
than the average number of innocent civilians
killed each month in South Viet-Nam by the
heroes of the Liberation Front and their north-

MARCU 25, 1968

411

em comrades. What is significant about Dak
Son, then, is not death alone, but that it typifies
the extremes to which the Communists must
now go in many areas to keep their grip on the
population.

The people who lived, and died, in Dak Son
were highland tribesmen, a minority group
which differs from the Vietnamese in its culture
and which had, at least until quite recently, few
reasons to support the national government. Al-
though the Viet Cong have not been successful
in drawing many highland tribesmen to their
ranks, the tribesmen have in the past generally
tolerated the Viet Cong. They have served them
as porters and laborers when required to do so.

The tribesmen of Dak Son, however, came to
have enough of this servitude. In late 1965 and
1966, they left their jungle homes for an area
under Government control and built themselves
a new village. In short, they chose freedom. The
Communists called them back; they did not
come. The Communists attacked them twice In

1966 and twice in 1967; the tribesmen beat them
back and inflicted heavy losses upon them.
Finally, on December 5, an entire regiment of
Communists attacked the hamlet. The 62 high-
lander development cadre and the platoon of
highlander village militia who were in the ham-
let resisted from midnight until morning, when
they were finally overwhelmed. You have all
seen the results. The villagers were pimished for
becoming refugees.

The point of the episode is not Communist
brutality alone. That is nothing new — it has
resulted in the death of 3,820 Vietnamese civil-
ians and the disappearances of 5,368 others in

1967 alone. What is significant is the resistance
these once "neutral" people have offered. Wliat
this means, and it has been happening through-
out the country, is that the "water" is rejecting
the "fish" — and the "fish" in turn cease to cir-
culate so confidently in the "water." They be-
come an increasingly insecure and therefore an
increasingly brutal force, which in order to
sustain itself must resort more and more to
terror, to forcible taxations of up to 50 percent,
to the draft of 14-year-olds and 40-year-olds.

This is the enemy we face: a largely local
force, organized, controlled, and supported by
an outside power in the North, but having its
roots in the South itself. This is the fact we
must never lose sight of. The struggle in Viet-
Nam is a struggle of and for the South. If vic-
tory is to be found, it will therefore be found in
the South — not in Peking, not in Hanoi, not on

the soil of Cambodia, but in the South of
Viet-Nam.

It is to be gained in the South not by setpiece
battles, not by an accumulation of statistics, not,
indeed, by any feat of arms or any program of
building alone, but by the relentless pursuit of
political ends by political means — behind a mili-
tary shield, to be sure, but always through
political as well as military methods and always
by military methods compatible with our po-
litical goals. Our military effort, to be sure, must
be adapted to the military threat. But it cannot
prevail alone. The free world must show that
it, too, can use the new weapon of national lib-
eration with which the Communists now chal-
lenge free people in many parts of the world.

Security the Common Purpose

We hear people talk of the political and
economic war in Viet-Nam as "the other war,"
as if it were apart from the military struggle.
To me, there is no "other war" in Viet-Nam —
there is only one war. The bombing of military
targets in the North, the battles in the DMZ
[demilitarized zone], and the construction of a
schoolhouse in the Mekong Delta are part of
the same effort and derive their validity from
their contribution to the same goal: success in
South Viet-Nam's nation-building effort.

All of the Allied soldiers — Americans and
Koreans, Australians, Thais, Filipinos, and New
Zealanders — who are fighting alongside the
Army of the Eepublic of Viet-Nam have a com-
mon purpose, a purpose absolutely essential to
success in that country. It is not what the De-
fense Department rather coldly calls kill ratios.
It is not victory parades and the booty of war
on proud display. It is, in a word, security —
security for the people of South Viet-Nam in
their cities and villages.

No political and economic program, no matter
how enlightened, how well administered, and
how well received, can achieve success in a sit-
uation of armed insurgency, such as that in
South Viet-Nam, if the people cannot be guar-
anteed a reasonable degree of safety in their
homes. Our men are fighting major units of the
North Vietnamese army to prevent large forces
from attacking in populated areas. Units of the
other Allied nations in Viet-Nam are likewise
carrying out this basic mission of keeping main-
force units at bay and away from the cities. In
the Mekong Delta the Regular Army of Viet-
Nam continues to perform this task. But in and

412

DEPARTMENT OF STATE BULLETIN

around the hamlets and villages, where most of
the people live, the responsibility of the Viet-
namese Armed Forces must remain primary.
This is why Vietnamese Regional Forces are
lighting in every Province. This is why hamlet
militia and cadremen gave their lives at Dak
Son.

Growth of New Institutions and Systems

Security is vital. But security has no meaning
by itself. There can be no security without the
collaboration of the people, and this cannot be
won without a political, economic, and social
program. Without a program and a responsible
and responsive government to secure it, there
would be only two armed bands contending, like
medieval robber barons, for so many towns and
so much booty.

But there is a program in South Viet-Nam,
and there is a government, drawing its mandate
of legitimacy from the consent of the governed.

There is an elected executive. There is a legis-
lature, which is asserting its prerogatives and
seriously contesting some of the proposals the
executive has put before it. There are legislators
who are learning the political game of fence-
mending in their constituencies. They have to.
They have seen how many proud incumbents of
the former Constituent Assembly were not re-
turned to Saigon because their electors felt they
hadn't done enough for the folks back home.

None of this comes as news to you — it has
been in all the papers and on television. Wliat
has not been so frequently mentioned — but what
undoubtedly means even more to the majority of
the Vietnamese people who live in the country-
side, as indeed it does to Americans, rural and
urban — is local self-government.

Throughout the year that has recently ended,
thousands of hamlet chiefs and village council
members have been elected all over Viet-Nam, in
every village where the Government can hope to
protect them. These local governments are not
just debating societies; for they have the one
power any local government must have to be
effective — be it Indianapolis, New York, or
Peru, Vermont — namely, the power of the purse.
Vietnamese villagers now have the power to as-
sess and tax land, to spend their revenues as they
see fit. They have the right to turn to their Prov-
ince chiefs, the representatives of the central
government, and request assistance for projects
which are beyond their means or go beyond their
village gates. The Province chief in turn now

has the power to call for the cooperation of all
the local teclmical service chiefs — agriculture,
education, health, public works — without refer-
ring every question back to their parent minis-
tries in Saigon. He has had, since the beginning
of the Eevolutionary Development program, a
budget of his own to support development ef-
forts in the Province.

All but the last of these institutions and sys-
tems are new, or newly restored, to Viet-Nam.
I have not mentioned them here to crow about
them. They are not the end, they are not them-
selves "the proof of the pudding." That re-
mains, as always, in the eating — in the manner
in which the Vietnamese use these new popular
institutions which they have created. They are
institutions of which any developing nation
could be proud; they are little less than phe-
nomenal for having been developed in a wartime
situation. But they are a beginning, and a good
one.

American Assistance to Vietnamese EfFort

This is the effort being made in Viet-Nam
and its potential for the future. It is a military
effort becau,se nation-building camiot exist with-
out military security; it is a political and eco-
nomic effect because security is meaningless
without nation-building. And it is, first and
foremost, and always, a Vietnamese effort.

On the military side, I need not make the
point that complaints that the Vietnamese have
"ceased to fight" are just as mistaken in Viet-
Nam as the same charges were 15 years ago in
Korea or earlier still in Europe. These conten-
tions are baseless, in fact; and they rest on a
basic fallacy common to both extremes of the
Viet-Nam aviary, the fallacy that somehow
Viet-Nam is an all-American war with a few
Vietnamese sitting somewhere on the sidelines.
These "few Vietnamese" are the men on guard
at every pacified hamlet, the men of the "Re-
gional Forces" militia units operating in every
Province of Viet-Nam, and the men of the Viet-
namese Regular Army who continue to bear
the brunt of almost the entire military effort in
the vital delta of the Mekong.

It is not unnatural that Americans want to
learn what Americans are doing in that distant
war. And national self -center edness tends al-
ways to exaggerate our own efforts and to
deprecate those of our allies. It is not unnatural
to see American headlines about major battles
in which a hundred or more American boys lose

293-084 — 68-

413

their lives. We xmderstand this. We understand,
too, that perhaps the hundred Vietnamese
militiamen and soldiers who, at the same time,
lose their lives in a hundred small engagements
protecting a hundred hamlets throughout the
country do not make as good copy. But they are
there fighting and dying just the same.

On the civilian, or the political and economic
side, the same holds true. Our civilian personnel
in Viet-Xam now number some 3,000. But let
us also remember the 35,000 Eevolutionary De-
velopment cadre, the tens of thousands of hamlet
and village officials, the unnoticed nmnber of
the Vietnamese civil servants who every day
are struggling against their inherited systems
of mandarin bureaucracy and corruption to help
develop new institutions. Of course South Viet-
nam has a problem of corruption. It is not an
unknown phenomenon in other parts of the
world, including our own country. In Asia, the
effort to eliminate corruption faces special
obstacles — obstacles of age-old habit. But the
effort is being made in Viet-Xam, and it is mak-
ing progress.

We Americans are assisting the Vietnamese
as they develop and defend these institutions.
We can, and do, give them important budgetary
and economic support : we furnish technicians,
logistical support, and commodities of all de-
scriptions. All this is American — ^but there is
not, there cannot be, an American program for
the benefit of the Vietnamese people and na-
tion. Tliere are not, there cannot be, American
refugee camps in Viet-Xam. An American
schoolhouse, or pigpen, built without an ex-
pressed Vietnamese need and built with no
identification with the Vietnamese Govern-
ment, is valueless. A hundred of these facilities
would make a handsome statistic, but they
would make no contribution at all to victory.

So we must watch our terms of reference. We
must ask ourselves, in evaluating the situation,
not only what the Vietnamese are doing to
collaborate with us. but what they are doing to
help themselves. We have shown, and we must
continue to show, our willingness to assist. But
in the end it is the nationalists of South Viet-
Xam alone who can and must fight and win their
own revolution. Their goal — and ours, we must
remember — is not to hear "Thank you America"
but rather "Long live free Viet-Xam."

I can be confident the Vietnamese will succeed
in their endeavors because all I have come to
know about their country shows me that the
progress being made there is real. This progress

does not come in any dramatic flash, not with
any great upsweeps on a chart, but slowly and
steadily. In 1965, there were only 41.2 percent of
the people under Government protection. Xow
67 percent of the people of Viet-Xam are
within areas controlled by the Government. The
Vietnamese Eevolutionary Development pro-
gram, the spearhead of the political-economic i
war in Viet-Xam, has set itself modest but en-
tirely realistic goals of expanding the areas of .
Government control, which they have substan- ji
tially attained. In addition, other large numbers
of people have fled their homes in Communist-
controlled areas for new homes and lands under
Government control or, as in every other coun-
try of the world, for new opportunities afforded
by expanding urban areas. The trend is clear.

Slow But Steady Progress

A word of caution, however. I have not given
you these figures so that you may set about
calculating in how many years they should add
up to 100 percent. Obviously, the answer is not
next year. It is difficult to calculate the time of
victory even in a purely military situation; to
do so in a political war, where intangibles are
infinitely more important, is sheer folly. There
wiU undoubtedly be setbacks as well as progress
in the period before us. Wliat I do want to leave
with you, rather, is the thought that the war in
Viet-Xam is not a military stalemate. It is
rather one of slow but steady military and
political progress.

Wliat this progress wlU lead to is what we
have seen liappen in Europe and in Xorth Asia.
Like the Koreans and the Taiwanese, the South
Vietnamese have begim to build their modem
nation in their own way, a nation with which
all the people of that land can identify. As this
goal is achieved, the political base of the Viet
Cong will continue to erode. Tlie popular sup-
port of the Viet Cong, whether voluntary or
inspired by terror, will diminish and disappear.
Wlien this happens, the guerrilla war will be
over.

The hard-core indigenous Commimists re-
maining will be what any other nonpopular
armed force is — a pack, or packs, of bandits.
Like any other bandits, they can be dealt with
by local police forces. Should Hanoi continue
even then in its policy of replacing lost southern
Communists by northern Eegular Army sol-
diers, they will find themselves — far more
than even now — as a hated foreign army. The

■il4

DEPAET3IEXT OF STATE BTXLLETIX

laws of guerrilla warfare would no longer
apply. And an army of comparable size, the
Army of the Republic of Viet-Xam, should be
quite capable of dealing with them. Under those
circumstances, nothing short of direct Chinese
or Soviet invasion could keep the Republic of
Viet-Nam from being free again — free to pursue
the goals it has set for itself, free to develop in
the paths determined by its own people.

As this process gains momentum, the need for
Allied assistance will decrease, as it has else-
where. The need for Allied combat troops to
reinforce the Vietnamese will also grow pro-
gressively less. In the end, the need will essen-
tially disappear. But when this process can
begin, and at what pace it will then accelerate,
depends upon too many factors for me to
attempt to calculate and especially on Hanoi's
program of infiltration and the Chinese and
Soviet ijrograms of support.

Tlie limited and prudent political and mili-
tary course in which we and the Vietnamese
are now engaged offers the best hope for vic-
tory. Any attempt to ignore the realities I have
presented, to ignore the vmique nature of this
political war, and to attempt to "get it over
with fast" with massive bombing attacks on
noimiilitary targets, invasion of the Xorth. or
other escalations totally unrelated to the effort
in the South is to risk, and to risk unnecessarily,
the world war which our effort in Viet-Xam is
intended to prevent.

On the other hand, any attempt on our part
to withdraw our support from South Viet-Xam
before the political process is over would not
only be a heavy blow to our own interests but
a grievous betrayal of those Vietnamese nation-
alists— from Saigon to the smallest hamlet — who
are fighting and winning their own revolution.
It would not bring peace but likely a bloodbath
which would make those wliich took place in the
Xorth following Ho's assumption of power look
like the Boston Tea Party.

I conclude, finally, that the process in which
we are now engaged offers the most realistic
hope available to us for a negotiated pe^ice in
Viet-Xam. Ho Chi ilinh is no fool. He knows
what his objectives are. He won't give iip his
political war just because a few hvmdred of his
men get killed on a moimtainside in this or that
battle or because this plant or that irrigation
dike is blown up in the Xorth. He won't give
them up either because all "reasonable public
opinion" abhors war and asks him. ever so
humbly, to help put a stop to it. Thus far he has

had no difficulty in ignoring and rejecting all
manner of proposals to seek a political solution
for the conflict.

But he may be expected to pull in his horns
when he sees, quite simply, that he is not suc-
ceeding at his own game — that the political tide
is not carrying his revolutionary "tish'" onward
but is moving steadily against them, pushing
them back to the rocks and sand, where they
caimot live. An aggressor's willingness to make
peace comes, after all, not because of any
dramatic defeats in a given sector, not because
of moral appeals, but out of the simple recogni-
tion of inexorable realities.

"We are always exhorted to make more deter-
mined efforts to initiate negotiations and to
exercise more imagination in proposing them.
I can assure you, after 15 months in this job,
that we pursue every opportunity for negotia-
tions, however faint, and invent a great many
ourselves. Thus far we have confronted a flat
refusal to discuss anything more serious than
procedures for turning South Viet-Xam over
to the control of the Viet Cong and for with-
drawing our forces and other forces assisting
the Government of South Viet-Xam. As the
President said in his state of the Union mes-
sage,^ we are now seeking to find out officially
what the latest press reports from Hanoi actu-
ally mean.

Our own position is clear. "We favor no in-
fringements whatever on the territory or the
sovereignty of Xorth Viet-Xam. TVe do not de-
sire American bases in South Viet-Xam or any
utilization of the territory of South Viet-Xam
against the Commvmist system in the Xorth or
agaiost the neutrality of Laos and Cambodia.
"What we must have, however, is the simple
guarantee from Xorth Viet-Xam to refrain
from interfering in South Viet-Xam's political
and economic development by force of arms.
And that is all.

All we are asking, all we are seeking, is that
South Viet-Xam be free to decide its own future
and develop itself according to its own plans.
This is, indeed, all we ask, all we need to ask,
in aU of Southeast Asia. If the free nations in
this part of the world do develop their resources
and the talents of their people, a strength and
self-confidence wiE develop which will make
the '"national liberation war* no more serious a
threat in Southeast Asia than it is now in the
north of that great continent. As this happens.

' For excerpts, see ibid.. Feb. 5, 196S, p. 161.

3IAKCH 25. 196S

415

the balance of po\Yer will again be righted in
that part of the world — and our own relations
with these nations wnll take other forms, as
they have in Europe and in North Asia.

These are the goals of our national interest

in Viet-Nam and in Southeast Asia. They are
not impossible dreams — provided we have the
patience and the will to shield the revolution
in South Viet-Nam until it achieves the suc-
cess it is on the way to attaining.

What Kind of Revolution in the Home Hemisphere?

by Covey T. Oliver

Assistant Secretary for Inter- American Affairs ^

This is the seventh in a series of major public
addresses I have made since my appointment
as Assistant Secretary in which I have out-
lined what I hope wDl be seen as a consistent
and clear philosophy of total development
under the Alliance for Progress. I delivered
the first in this series to this same council in
June 1967.^

In the course of developing this doctrine,
you will note I have used the term "home hem-
isphere" to describe the locale of the Alliance
for Progress. I use this term not only to con-
note the intimate relationship that exists among
the Americas but also because the Alliance no
longer is limited to the United States and Latin
America. It now embraces the English-speak-
ing island nations of Trinidad and Tobago and
Barbados.

Now, most of us who are concerned with the
future of our home hemisphere agree there is
an urgent need for radical and far-reaching
social, economic, and political refonn through-
out the area. A true revolution is imperative to
reform the unjust societal structures which
benefit a few at the cost of neglecting the great
majority and to reverse the erosion which for
decades has been reducing the region's share
in the world's economic and technological
growth. Government leaders, teclmicians, stu-
dents, intellectuals, and even Communists ac-
cept this premise. As a matter of fact, the revo-
lution has already begun.

' Address made before the World Affairs Council
of Philadelphia at Philadelphia, Pa., on Mar. 4 (press
release 44).

' Bulletin of July 24, 1967, p. 102.

The question, then, is not whether a revolu-
tion in our home hemisphere is necessary but
rather what kind of revolution will take place.
The question that today confronts our allies to
the south is : Can this revolution be peaceful, or
must it be violent ?

Almost everyone responsible in some degree
for the welfare of his nation and its citizens
believes or at least hopes it is possible to effect
the great changes that are needed in peace.
Despita the fact there are no rulebooks for the
rapid and peaceful transformation of such a
vast and diverse area and very few guides to the
right path, 22 nations have dedicated them-
selves to achieve this unique goal. Tliis great
effort, in which the United States participates,
is called the Alliance for Progress.

On the other hand, those who advocate a
violent overthrow of the existing systems in
the Americas can draw on an ancient and grow-
ing library which details man's experience with
bloody revolutions. Every step of the way has
been recounted and analyzed hundreds of times.
The violent revolutionary has but to choose
among a variety of theoreticians, many of
whom claim to be infallible, and follow the
easy-to-read directions to immediate success.
There is, of course, a wide divergence of opin-
ion on the details of the course which the vio-
lent revolutionary must follow, but the general
premise is the same : The existing system is evil
and must be completely destroyed and another
system imposed. In our home hemisphere, the
advocate of violent revolution contends that any
attemjit to change the existing systems peace-
fully, however well intentioned, will be sabo-

416

DEPARTMENT OF STATE BULLETIN

taged by an immutable oligarchy or military
that has always resisted sharing wealth and
power and always will.

The violent revolutionaries in the home hem-
isphere today can be separated mto roughly
three groups :

1. There are those who preach one of an in-
creasing nimiber of mutually exclusive Com-
munist dogmas, ixnd whose objective in foment-
ing destruction is the establishment of Com-
munist dictatorehip ;

2. There are the irresponsible radicals, pres-
ent in any society, who from protected plat-
forms call for the violent end of the existing
system regardless of its nature ; and

3. There are a growing number who have
personally witnessed the abject poverty and
degradation of millions of fellow Americans
and who have despaired that the complex prob-
lems underlying these conditions will ever yield
to peaceful efforts.

Often it is this last group, those who have
despaired, which strikes a responsive chord in
all who comprehend the urgent need for change
in our home hemisphere. No one can question
the truth of their very personal stories of wide-
spread poverty and injustice. Nor can one argue
with their contention that the forces resisting
change are still powerful and constitute a
serious threat to peaceful development efforts.
And, finally, perhaps many of us are sympa-
thetic witli those who have despaired because
we accept at least some share of the guilt they
feel for the centuries of neglect that have
spawned the conditions that threaten the well-
being of all Americans today.

As much as one can understand and sympa-
tliize, liowever, one must reject their conclusion
that violent destruction can resolve the prob-
lems of our hemisphere. That conclusion ne-
gates one of the fundamental beliefs that has
led this country to true greatness : that free and
enlightened men, through their own continuing
and constructive efforts, can mold societies to
meet their own needs and desires. To accept the
violent road to change, one would have to ig-
nore the overwhelming historical evidence that
violent change usually substitutes one tyran-
nical system for another and may even impede
true development. One would also have to ac-
cept the terrible consequences of increasing the
pain of those who already suffer too much.

Let us examine for a minute the violent revo-
lutionary's premise that the existing govern-

ments of Latin xVmerica are evil, that the ma-
jority of hemispheric leaders either belong to
traditional power groups or at least serve as
fronts for them.

Despite the real progress our Alliance na-
tions have made over the past 7 years m initiat-
ing social and political reform and economic
gro^vth, despite the courage shown by many
governments by launching programs which
strike directly at the imjust advantages en-
joyed by traditionally powerful and protected
sectors, too many in our home hemisphere — in-
cluding some right here in the United States —
too many are unable or imwUlmg to accept the
fact that things have changed. Too much of
what passes for intelligent and knowledgeable
comment on inter-American affairs is based on
the belief that Latin American leaders today
are no different from those of 25, 50, or a hun-
dred years ago.

This, very simply, is false.

More and more Latin American leaders to-
day are personally as well as officially dedicated
to the revolutionary goals of the Alliance char-
ter.' Their resolve to bring a better life to all
their peoples has been tested and strengthened
during the difficult years when we began to
understand the problems we were up against
and to forge the tools with which we would
change the face of half the world. Their dedi-
cation is not based on complete success, for we
all have suffered reverses. Yet the advances
that have been made are heartening. The ad-
vances are so encouraging that last year at
Punta del Este President Johnson and his col-
leagues not only called on their nations to con-
tinue the Alliance effort but said that effort
should be increased.*

Unlike the demagogs, honest and progressive
Latin American leaders do not promise that
ancient injustices can be righted overnight.
Tliey make no promise of immediate riches, nor
do they claim to have discovered an easy way to
human development. They call for greater effort
from more Americans, increased self-denial, and
more financial sacrifice. They demand unlimited
good will, understanding, and perseverance.

In effect, the Action Program outlined last
year at Punta del Este is a resounding reaffir-
mation of belief that the tremendous task ahead

* For text of the Charter of Punta del Este, see tMd.,
Sept. 11, 1961, p. 463.

' For background and text of the Declaration of
the Presidents of America, see ibid., May 8, 1967, p. 706.

MAECH 25, 1968

417

of the Americas can be accomiDlished in peace
as long as we continue to help each other and
ourselves.

But the advocates of violence point to the
unrest in many Latin and Caribtean American
countries today and say this is evidence that the
revolutionary words of the Alliance charter and
the Declaration of American Presidents are
empty promises. They shout that the Alliance
has failed to bring a better life to the dism-
herited millions of our hemisphere and that
these millions are disgusted.

I contend that the unrest we see today is
proof that the Alliance is working. The men,
women, and cliildren who once had no hope for
a better future now see that poverty, illness,
and illiteracy ai'e not unchangeable facts of life.
Alliance roads, schools, medical teams, and agri-
cultural projects in thousands of once-stagnant
areas have stirred new hope and new demands
for furtlier improvement. There is unrest in
those with power and wealth as they see that
the goveriunents mean to collect fair taxes or
to tear down trade barriers which guarantee
them captive markets.

Much of the unrest in the home hemisphere
today was planted and nurtured by the Alliance
for Progress. If we are successful, this unrest
will grow.

Unrest — social upheaval — is the force which
powers tlie continuous revolution that is charac-
teristic of all truly democratic societies. It is the
dynamic energy which forces a democratic sys-
tem to reform itself to meet the ever-clianging
attitudes, needs, and desires of its citizens. Over
the years, the United States has grown in power
and justice as a direct result of havmg evolved
a means of controlling the potential destruc-
tiveness inherent in social unrest and directing
this force into building an improved society.

The greatest threat to peaceful development
in our home hemisphere today does not come
from Castro's Cuba or from textbook Marxists
and Maoists. Time and again, their pompous,
dogmatic claims to infallibility and invincibil-
ity have been brought up hard against the
reality that their bloody theories are alien and
unwelcome in the Americas. They are unable to
find a sea of believers in which to hide. The
totalitarian leftist can impede, but he cannot
halt, the Alliance for Progress.

The real danger to the Alliance today is that
shortsighted or selfish men in the Americas may
try to damp the fires of hope, the incipient un-
rest which has been generated during the last 7

years. If these people are allowed to slow our
progress, the unrest we now welcome may grow
too fast for the changing systems to be able to
control. Old, unjust power structures which in
the past insured stable, if stagnant, societies
have been weakened. New and democratic insti-
tutions must be built to take their place. Alli-
ance leaders are well aware that unless the new
institutions grow rapidly, the unrest may turn
into violence. That is why they called for in-
creased development effort during the coming
years which President Johnson has called the
Decade of Urgency.

Today, for the first time in history, the home
hemisphere can choose its revolution. It can
either be fueled by the peaceful and constructive
ferment of awakened millions or it can be the
traditional bloodbath and terror. Unless we meet
the rising expectations of the poor, I am afraid
it will be the latter. If that is the case the peace
we now enjoy in this hemisphere alone will be
shattered. If our sister Americas suffer wide-
spread destruction, coups and countercoups, in-
tervention and coimterintervention, it will then
not be necessary to give speeches to convince
people in the United States that our own secu-
rity depends on the well-being of all of us. The
connection will be all too painfully obvious.

It is too late for any of us mei'ely to acquiesce
to change. All must now contribute to tlie effort.
Tlie changes that can be made by governments
alone have been carried out. Tlie Latin Amer-
ican landowner, businessman, and industrialist
must now support and even i:)romote his govern-
ment's efforts; for his wealth, knowledge, and
ability are sorely needed. Latin American stu-
dents must direct their intelligence toward de-
veloping the new skills and systems needed to
meet the changing needs of their new societies.

We ill the United States must be ready to
make available the increased financial and tech-
nical help our neighbors require to redouble
their own efforts during this critical period of
development.

There is no question but that the basic policy
of the United States under the Alliance for
Progress is the policy of assisting, encouraging,
and even urging peaceful revolution. But as we
all know, each society must, in the last analysis,
make its own value judgment. The United
States cannot force this decision on others. Too
much pressure, indeed, might well result in
hardening opposing positions that would lead
to misunderstanding and distrust and ulti-

418

DEPARTMENT OF STATE BXTLLETIN

mately to chaotic violence. Tlie fact that social
change is not instantaneous should not be con-
strued to mean that the covert policy of the
United States is to maintain the status quo in
other American Republics. Furthermore, Latin
Americans are not "lesser breeds without the
Law." They are our brothers in basic culture,
and they expect and deserve to be treated with
I consideration.

So V.G in the United States are involved in
what seems to be a paradox. We have a strong
sense of the urgency of change; yet we know
we cannot bring about change immediately. This
paradoxical position is not imusual in hmuan
or international relations. We must hold stead-
fast to the goals we have .set ourselves and al-
ways be patient and vigilant.

In a very real sense, the virtue of the United
States as leader and friend is at stake here. All-
or-nothing ultimata simply will not woi'k. We
must make clear what it is we stand for and do
everything we can to find effective and accept-
able channels through which our nations and
our peoples can work together. In many deli-
cate areas, these channels must be multipartite.
Yet when this country works through multipar-
tite development institutions we must function
as a team member. This means we cannot in
every respect get what we want at a given mo-
ment in time, for Providence has not given us
the power to work miracles on our own terms.

We must make up our owm minds on the help
we can give our closest neighbors.

Despite recent indications that the United
States may be weakening in its resolve to help
our neighlwrs, I cannot believe that the people
of this coimtry will turn away from our com-
mitment to their progress.

Our well-being and peace is so inextricably
tied to theirs, our close relationship so obvious,
that self-interest alone should insure our con-
tinued assistance. And beyond self-interest, we
in public office have always been able to depend
on the great strength of this nation's magna-
nimity and sense of justice.

If the Alliance for Progress is a viable alter-
native to a violent solution of the problems of
our home hemisphere today — and 7 years of
growth and increasing stability indicate that it
is — this nation cannot, must not, ally itself with
those who from ignorance, indifference, or de-
sign threaten its continued success.

We have foimd an American solution to
America's problems. We must not allow it to
fail.

Inter-American Cultural Council
Meets at Maracay

DEPARTMENT ANNOUNCEMENT

Tlie Department of State announced on Feb-
ruaiT 12 (press release 30) that Milton S. Eisen-
hower would be the United States representa-
tive and chainuan of the U.S. delegation to the
fifth meeting of the Inter-American Cultural
Council at Maracay, Venezuela, February 15-22.

Maurice M. Bernbaum, U.S. Ambassador to
Venezuela, served as an alternate representa-
tive and vice chairman of the delegation. Donald
F. Hornig, Special Assistant to the President
for Science and Technology, and Jacob Canter,
Deputy Assistant Secretary of State for Educa-
tional and Cultural Affairs, also served as al-
ternate representatives.^

The Inter-American Cultural Council is an
organ of the Organization of American States,
and all the OAS members are represented on
the Council, save Cuba, which has been excluded
from participation in the OAS since 1962. The
agenda of the Maracay meeting was approved
by the Council of the OAS on November 8,
1967.

A major topic on the agenda was considera-
tion of measures for carrying out the mandates
emanating from the meeting of American Chiefs
of State, - in the fields of education, science,
technology, and culture. These matters have
been given intensive study since the Summit
Meeting last April.

In a special meeting held in May 1967, the
Inter-American Cultural Council established
an a(l hoc committee on education to make rec-
ommendations on educational development pro-
grams and reorganization of the Council's
functions in light of the amended OAS Char-
ter. In the same meeting the Council appointed
a group of experts on science and technology
to consider the measures necessary for a re-
gional scientific and technological development
program which the American Presidents had

' For names of advisers on the delegation, see Depart-
ment of State press release 30 dated Feb. 12. ( Note : Dr.
pjisenhower returned to the United .States February
20; Covey T. Oliver, Assistant Secretary of State for
Inter-American Affairs, served as U.S. representative
and chairman of the delegation February 21-22.)

' For text of the Declaration of the Presidents of
America signed at Punta del Este, Uruguay, on Apr.
14, 1067, see Bulletin of May 8, 1967, p. 706.

MARCH 25, 1968

419

specifically called for in order "to advance
science and teclinology to a degree that they
will contribute substantially to accelerating the
economic development and well-being" of the
Latin American peoples. The report and recom-
mendations of the ad hoc committee and the
group of experts were completed late in 1967,
and there are now ready for the Cultural Coun-
cil's consideration program proposals amount-
ing to $25 million for regional programs in
science and teclinology and education, plus siz-
able expansion of certain OAS scholarship,
training, and cultural programs, and for the
operations of the Cultural Council.

Another major topic on the agenda is the
adaptation of the functions of the Inter-Amer-
ican Cultural Council and of its permanent
committee to enable the effective discharge of its
increased responsibilities and activities in keep-
ing with the spirit of the Protocol of Buenos
Aires amending the OAS Charter. Among the
most important of these new responsibilities is
the contribution of the Cultural Council to the
"country review" process carried on annually
by the Inter-American Committee on the Al-
liance for Progress (CIAP), so that greater
attention will be given to educational and
scientific development.

MESSAGE FROM PRESIDENT JOHNSON »

If man is to achieve his fullest potential, he
must have the freedom to learn — and he must
have learning to be truly free.

You meet to put into action the jDurposes of
the Punta del Este Declaration of Presidents.
There is no more important work facing our
hemisphere. Together, we must:

— Assure basic education for all our people ;

— Make our secondary schools and universities
centers of excellence; and

— Harness science and teclinology in the work
of education and development.

The largest share of what must be done, you
must do. But I want you to know that we in
the United States will help — with our resources,
our teclinology, and the enthusiastic support of
our people.

In preparing your programs you will use the
tools that are at hand. But I hope your vision

• Read by Dr. Eisenhower at the first plenary session
on Feb. 15 (White House press release).

also will extend to the tools of tomorrow. I am
particularly enthusiastic about the possibilities
of combining advanced technology with ad-
vanced methods of teaching and research. Edu-
cational television already points the way. We
are not far from the day when the satellite will
help us leap across the barriers that today deny
good education to millions of citizens and unlock
the doors to hidden natural resources on land
and the surrounding seas.

With warm and vivid memories of my meet-
ings with your Presidents last April, I send you
greetings and best wishes for success in your
deliberations.

U.S. and Japan Sign New Agreement
on Peaceful Uses of Atomic Energy

Press release 42 dated February 26

A new agreement for cooperation in the
peaceful uses of atomic energy between the
United States and Japan was signed on Febru-
ary 26 during a ceremony in the Department of
State. Secretary Eusk and Atomic Energy
Commission Chairman Glenn Seaborg signed
for the United States, and Ambassador Takeso
Shimoda signed for Japan.

This agreement, which is for a period of
30 years, continues cooperation in the peaceful
development of atomic energy begun with
Japan in 1955. The agreement provides for the
supply of enriched uranium from the United
States to fuel 13 large nuclear power reactors
to be built in Japan. This agreement also pro-
vides authorization for the transfer by the AEC
of up to 365 kilograms of plutonium for use by
the Japanese in their peacefid research and de-
velopment program. In keeping with the long-
standing policy of both countries, the Interna-
tional Atomic Energy Agency will continue to
administer safeguards under the new agree-
ment. The agreement will now be submitted to
the Joint Committee on Atomic Energy of the
Congress, where it must lie for a period of 30
days before coming effective.

Secretary Rusk and Chairman Seaborg in
signing the agreement hailed it as further
evidence of the determination of the two coun-
tries to use atomic energy for the benefit of their
peoples and as an indication of the spectacular
growth of Japanese industrial and technical
capabilities.

420

DEPARTMENT OP STATE BTILLETIN'

THE CONGRESS

Department Expresses Views on East-West Trade

Folloimng are statements made hy Deputy
Under Secretary for Political Affairs Charles
E. BoMen and Assistant Secretary for Eco-
nomic Affairs Anthony M. Solomon hefore the
Svhcommittee on Europe of the House Com-
mittee on Foreign Affairs on February 20,

STATEMENT BY MR. BOHLEN

Madam Chairman [Edna F. Kelly], first of
all, let me thank you for the kind words you
spoke with regard to my new appointment. I
certainly share your hopes, and I am convinced
that the previously pleasant, friendly, and
cooperative relations which I have had the
pleasure of having with your subcommittee wOl
continue.

I trust that you will bear with me in this task
of talking on East-AVest trade. I have only last
week returned to that subject, having been for
the last 5 years preoccupied with Franco-
American relations.

I would like to make a few general remarks
with regard to the political rationale of trading
with Eastern Europe, including the Soviet
Union, and then turn it over to Assistant Sec-
retary Solomon, who is much more familiar
with all of the details of the economic aspects
of this trade.

The first thing I would like to say is: The
term "East-West trade" is really a misnomer.
Wlien we talk about East-West trade, we really
mean trade with the Soviet Union and Eastern
European coimtries, the countries that have
Communist systems.

In regard to the other Communist countries
of the world, such as China, North Viet-Nam,
North Korea, and, I might add, Cuba, there is
virtually a total embargo on our trade with
them : so these do not figure in these hearings, I
would think.

In addition, when we speak of trade, we

really speak of only trade in peaceful items.
The strategic items, items of military value,
atomic value, are all prohibited, not only by
the U.S. lists but also by the COCOM [Coordi-
nating Committee] lists.

There may be a few items on the list which
we would clear for trade as nonstrategic which
some members of the committee might consider
strategic, but these are the normal differences
of opinion that arise on any question. So, in
general, what I think we are talking about here
is peaceful trade with the Soviet Union and
Eastern Europe.

Our allies in NATO join with us in COCOM
in accepting voluntarily a number of restric-
tions with regard to strategic items. Thus, I
think the figures that Mrs. Kelly referred to
really apply largely to peaceful trade and not,
strictly speaking, to strategic items; though
I think there may be some difference between
the U.S. list and the COCOM list.

In effect, with the Soviet Union we have
never — or with the countries of Eastern Eu-
rope— we have never applied any really major
trade restrictions of an embargo nature. There
were certain limitations put in during the
Korean war.

I think one of the reasons why we attach im-
portance to East- West trade from the political
point of view is because of its effect on develop-
ments in Eastern Eui-ope. If you will permit me
a little incursion into Marxist philosophy or
ideology, this relates very much to the subject
in question. One of the tenets of Marxist
thought was that national boundaries were
artificial and did not really have any validity.
Once you had a Socialist system installed in the
world or in part of the world, this would tend
to eliminate the importance of national bound-
aries. This theory was never put to the test in the
early days of the Soviet regime because the
Communist system, or the Socialist system, as
they called it, was in force only in one coimtry.

MARCH 25, 1968

421

It ill turn was in total control of the Communist
parties of all of the world, which followed
blindly the Soviet lead in every respect. It was
only after World War II when the Communist
system was installed^ — by force, really — in East-
ern Europe that the question really was put to
its test.

Tlie first sign that the theory was not valid
was the breakoff in 1949 of Yugoslavia from the
control of Moscow. Yugoslavia does not take
any orders or dictation in regard to her policies,
either domestic or foreign, from Moscow or any
other external center.

In the middle fifties there were the events in
Poland which you all know and in Himgary
which reflected the same desire of these coim-
tries, which we have been in the habit of term-
ing satellite countries, to reassert, their national
personalities. Romania has perhaps gone fur-
ther than any of the others; but Poland, to a
certain degree, has asserted her independence,
her right to act and think in Polish interests.
This, I believe, is true of all countries and is a
natural historical phenomenon. Far from being
imnatura], nationalism and national boundaries
continue to be perhaps the most important fac-
tors in tlie modem world. Anything we can do,
therefore, to help these countries reassert their
national personalities I think is in our interests.
It has always been a tenet of American foreign
policy to believe that a country should be inde-
pendent and in complete command of its own
policy, which it should be able to devise in ac-
cordance with its conception of its national
interest.

We feel that trade with these countries tends
to help along the process of expressing the na-
tional personalities of the countries concerned.

Furthermore, the domestic situation in a
country tends to respond to trade by producing
more in relation to demand, by having its prices
bear some relation to costs, and by taking more
into account the tastes and desires of the
consvimer.

_ Tliis tends to introduce a certain diversifica-
tion into the economic life of a country and to
weaken the overall control, the monolithic con-
trol, of the Communist Party over all phases of
national life.

Now, nnturally the question of trade with
Communist countries does raise a whole series
of questions, some of which are very important,
some of which are less important. Perhaps the
most important one at the moment is whether

or not peaceful trade with these countries makes
it easier for them to trade in military goods
with North Viet-Nam.

I would say that our answer would be that it
did not : that there is a sharp distinction between
the production of military items and the specific
needs of a given country and that no denial of
peaceful trade with any of these covmtries, par-
ticularly the Soviet Union, would have the
slightest effect on their ability and willingness
to supply military items to North Viet-Nam.

I also think it should be mentioned that trade
is a two-way street. I understand that our trade
with Eastern Europe as a whole, including the
Soviet Union, is roughly balanced. You carmot
shut off trade to the Eastern European coun-
tries, including the Soviet Union, without at the
same time harming the American exporter and
businessman who is engaged in what we would
call legitimate trade.

Mrs. Kelly mentioned the fact of the gi'eat
growth of Western European trade with East-
ern Europe, which is indeed a fact. It is true
that we are falling behind. I would agree with
that statement, and I believe we would on the
whole favor the removal of the existing restric-
tions that still operate on peaceful trade with
the Soviet Union and with some other Eastern
European countries.

I remember before the war when the recogni-
tion of the Soviet Union in 1933 came about,
one of the first things we did was a negotiation
of a trade agreement with them.

The only qiud pro quo we could get then was
a Soviet commitment to buy specific quantities
of goods in the United States, because you
simply did not have the commercial element in
the picture which would lead to a balanced
trade.

I personally think that trade is a normal thing
regardless of the organization of a country's
society. I must say I am in very full agreement
with the statement whicli was made by the three
Secretaries of State, Defense, and Commerce, I
think about 21^ years ago, that ". . . your Gov-
ernment regards commerce in peaceful goods
with the countries of Eastern Europe, including
the Soviet Union, as completely compatible
with our national interest." '

Now I think with your pennission I will turn
to Mr. Solomon to deal with the economic and
technical aspects of this trade.

' For background, see Bulletin of Nov. 1, 1965, p.
700.

422

DEPAETMENT OF STATE BTJLLETIK

STATEMENT BY MR. SOLOMON

I understand you would like me to summarize
briefly at the outset the responsibilities of the
Department of State relating to East-West
trade as they are set forth in existing legisla-
tion, how we are carrying out these responsibili-
ties, and what problems we have encountered.
After I have provided you with this summary,
I shall be glad to answer your questions on
these matters or on more general aspects of
East-West trade.

In terms of the State Department's operating
responsibilities, the two most significant pieces
of legislation are the Mutual Defense Assist-
ance Control Act of 1951, or the Battle Act, and
the ^lutual Security Act of 1954, as amended.

The Battle Act

The Battle Act represents an authoritative
statement of United States policy on the con-
trol of strategic trade with Communist coun-
tries. The language of section 101 of the act
makes it clear that our objective is an embargo
to Comm.unist countries, not only by the United
States but by other cooperating countries, on
the shipment of arms, atomic energy materials,
and items of primary strategic significance
used in the production of arms.

The Battle Act has served as the underpin-
ning for our negotiation with other countries
of strategic controls by them in parallel with
U.S. strategic controls. It provides the basis for
U.S. participation in the cooperative multilat-
eral strategic embargo program that is main-
tained through the 15-nation Coordinating
Committee, or COCOM, although the formation
of that Committee in 1950 antedated the Battle
Act.

The act also includes a sanction : the termina-
tion of all military, economic, or financial as-
sistance to any nation that fails to embargo
designated strategic commodities to the Soviet
Union and the other Communist countries
covered by the wording of the act. Because the
sanction is so severe, the act itself in section
103(b) provides carefully defined authority to
the President to make exceptions. This author-
ity permits the President, under certain cir-
cumstances, to direct the continuation of aid to
a country even though that country "knowingly
permits" a shipment of a listed commodity to
take place. This Presidential authority does not

extend to shipments of arms or atomic energy
materials.

Presidential determinations have been made
from time to time pursuant to the discretionary
authority provided in the act and have in each
case been reported to the designated congres-
sional committees, including the Committee on
Foreign Affairs. Aid has not been terminated
to any coimtry mider the Battle Act, although
the act has served as a bar to the initiation of
aid programs in certain cases until it was
possible to determine that the requirements of
the act were being met. We believe, as a general
matter, that the willingness of the President
to exercise discretion in administering the act
has strengthened rather than weakened the
hand of the Department of State in negotiating
controls with other nations.

I should make it clear that the Secretary of
State would have responsibility for negotia-
tions on strategic control policy whether or not
there were a Battle Act, but there are particular
responsibilities set forth in the act. Briefly, the
duties of the Battle Act Administrator include
the following:

1. The listing of commodities which, in the
Administrator's opinion after consultation with
other agencies, require inclusion on the Battle
Act strategic lists ;

2. Negotiating acceptance of an embargo
policy for Battle Act items by countries which
are, or which are expected to become, aid
recipients within the meaning of the act;

3. Making recommendations to the President
with respect to tlie continuation of aid to coun-
tries making shipments of those commodities
for which such discretion is permitted to the
President ;

4. Reporting to designated congressional
committees on all determinations made under
the act and on the status of trade with Com-
munist areas or countries for which determina-
tions have been made;

5. Making available technical advice and
assistance on export control procedures to other
nations desiring such assistance;

6. Coordinating those activities of the various
United States departments and agencies con-
cerned with security controls over exports from
other countries.

The Secretary of State is designated by the
President as the Battle Act Administratoi-. The
Assistant Secretary of State for Economic Af-

423

fairs performs the duties of the Administrator
by delegation and serves as Chairman of the
Economic Defense Advisory Committee, whicli
has representation from the Departments of De-
fense, Commerce, and Treasury, the Atomic
Energy Commission, the Central Intelligence
Agency, and such other departments or agen-
cies as may have an interest in particular ques-
tions. This Economic Defense Advisory Com-
mittee has a subsidiary Executive Committee
which considers questions not requiring resolu-
tion in the Advisory Committee. It also has two
active working groups: one dealing with
changes in, or interpretations of, the Battle Act
strategic lists; and the second dealing with en-
forcement and transshipment questions having
an international aspect. The agency representa-
tion on these working groups is drawn from the
EDAC agencies which have the most active in-
terest in the matters coming before the working
groups.

Mutual Security Act

The second legislative provision having spe-
cial importance from the standpoint of this de-
partment's operating responsibilities is section
414 of the Mutual Security Act of 1954. That
section authorizes the President to control, "in
furtherance of world peace and the security and
foreign policy of the United States," the export
and import of arms, ammunition, and imple-
ments of war, other than by a United States
Government agency. The President has dele-
gated his functions under this act to the Secre-
tary of State, including the authority to
designate those articles considered to be arms,
including technical data related thereto. Those
designations require the concurrence of the
Secretary of Defense. The Office of Munitions
Control of the Department of State also con-
sults closely with the Department of Defense
in its licensing actions.

From the standpoint of East-West trade, the
operations under the Mutual Security Act have
the effect of assuring an embargo on arms ex-
ports to Communist countries. We have also
prohibited imports of arms from those coun-
tries. This control complements the export con-
trol responsibility of the Atomic Energy
Commission for trade in atomic energy mate-
rials and of the Department of Commerce for
exports of most other commodities.

These three export control regimes — of the
State Department Office of Munitions Control,

of the Atomic Energy Commission, and of the
Department of Commerce — assure the preven-
tion of exports from the United States of stra-
tegic goods covered by the international stra-
tegic trade controls required by the Battle Act.

I would like to point out that, while the
responsibility for administering the Export
Control Act of 1949 is delegated by the Presi-
dent to the Secretary of Commerce, the Depart-
ment of State perfonns an important advisory
function under that act. Section 2 of that act
sets forth the policy of Congress that export
controls should be used to the extent necessary
to protect the domestic economy, to exercise
vigilance from the standpoint of the significance
of exports to the national security, and "to
further the foreign policy of the Unit«d States
and to aid in fulfilling its international
responsibilities."

Our advice on the latter aspect of export con-
trol policy is given through the interdepart-
mental Advisory Committee on Export Policy,
which includes other executive branch agencies
which the Department of Commerce nonnally
consults.

Trade With Cuba and North Viet-Nam

Section 620(f) of the Foreign Assistance Act
of 1961, as amended, prohibits any assistance
under that act to Communist countries, imless
the President makes certain findings. The Presi-
dential discretion to extend aid subject to such
findings has not been exercised. Accordingly,
there are no aid programs for any Communist
coimtry, including Yugoslavia.

In addition to prohibiting aid directly to
Communist countries, other provisions of the
act prohibit aid to any countries, Communist or
non-Communist, that trade with North Viet-
Nam or Cuba.

Section 620(a) (3) of the Foreign Assistance
Act prohibits assistance under that act to any
country that fails to take appropriate steps to
prevent ships or aircraft under its registi-y from
transporting anything to or from Cuba.

Section 620 (n) of the Foreign Assistance Act
prohibits assistance under that act or any other
act and prohibits sales under Public Law 480
to any country wliich provides or transports
anything to or from North Viet-Nam.

Sections 107(a) and 116 of the current
Foreign Assistance and Eelated Agencies Ap-
propriation Act prohibit assistance under the
Foreign Assistance Act to any country which

424

DEPARTKENT OF STATE BtTLLETTN

provides or carries to Cuba or North Viet-Nam
any strategic goods, including petroleum
products.

Finally, section 107(b) of the Appropriation
Act prohibits economic assistance under the
Foreign Assistance Act to any country which
"sells, furnishes, or permits any ships under its
registrj- to carry items of economic assistance" to
Cuba or North Viet-Nam.

Taken together, these provisions have the ef-
fect of prohibiting any programs of assistance
under the Foreign Assistance Act to any coun-
try which exports any goods to North Viet-Nam
or Cuba or which has ships or aircraft under its
registry engaged in trade with either of those
countries. "With respect to North Viet-Nam,
these provisions extend the ban to cover any
sales programs under Public Law 480 to any
comitries engaged in trade or shipping with
North Viet-Nam.

Section 103 of the Food for Peace Act of 19G6
extends the ban to cover nations having trade
and shipping with Cuba, as well as with North
Viet-Nam. However, this section includes a
provision permitting the President to determine
that sales agreements are permissible in the
national interest if the trade with Cuba involves
nothing beyond "medical supplies, non-strate-
gic raw materials for agriculture, and non-
strategic agricultural or food commodities."
This waiver authority does not apply in the
case of trade with North Viet-Nam.

Needless to say, the AID program has been
carefully administered in accordance with these
provisions. There are no progi-ams involving
Foreign Assistance Act or Food for Peace funds
for any govermnents trading with North Viet-
Nam. There are no aid programs for any gov-
ernments trading with Cuba or having ships in
trade with Cuba. Tliere has been a Presidential
determination resulting in an agricultural sales
program for Morocco, tlie determination being
taken in the light of sales by Morocco to Cuba
of nonstrategic raw materials for agi'iculture.

These provisions, moreover, have been the
legislative basis for extended and intensive
diplomatic eiforts to persuade other free- world
comitries to remove their ships from the Cuban
and N'orth Viet-Nam trade. We have had a large
measure of success in these negotiations. In the
case of North Viet-Nam, the shipping has been
reduced to a hard core of vessels operating only
in East Asian waters, registered in Hong Kong
but under effective Chinese Communist control,
plus an occasional voyage by a vessel under the

registry of Cyprus, Malta, or Italy. Arrivals in
North Viet-Nam averaged only six per month in
1967.

In the case of Cuba, the reduction has not been
so dramatic, but it has been substantial. In 1964
there were 394 calls by free-world ships at
Cuban ports ; in 1965 there were only 290 such
calls; in 1966, 224; and there were only 217
during 1967.

Before leaving the Food for Peace Act pro-
vision, I would like to point out for the sub-
committee that in practice the impact of the
section 103(d) (3) ban on trade with Cuba falls
on Yugoslavia. Yugoslavia is the only country
otherwise eligible for P.L. 480 purchases that is
precluded. It has no trade or shipping what-
ever with North Viet-Nam, but its ships call at
Cuba and carry commercial cargo not subject to
Presidential waiver.

I should note the inconsistency in the legis-
lative treatment of third-country trade with
North Viet-Nam. The Foreign Assistance Act
bans aid, P.L. 480 sales, and other assistance to
any country that trades with or transports goods
to or from North Viet-Nam "so long as the re-
gime in North Viet-Nam gives support to hos-
tilities in South Viet-Nam." The Export-Im-
port Bank bill in both the Senate and House
versions now under consideration has a similar
thrust. That is, it bans Export-Import Bank
transactions with countries whose governments
trade or aid nations that are "in armed conflict"
with the United States. But the Food for Peace
Act in section 103(d)(3) bans sales to third
countries trading with North Viet-Nam so long
as North Viet-Nam is "governed by a Com-
munist regime."

Trade Expansion Act of 1962

This act is not administered by the Depart-
ment of State, but I would like to mention pro-
visions which are of special interest to us.
Section 231(a) of the Trade Expansion Act
of 1962 directed the President, as soon as prac-
ticable, to suspend, withdraw, or prevent the
application of concessions, including reductions
or maintenance of duties proclaimed in carry-
ing out any trade agreement with respect to
products of any country or area dominated or
controlled by communism. The effect of this
directive is to prevent the extension of non-
discriminatory tariff treatment to Communist
countries. The only exception to this directive
is through section 231(b) of the Trade Expan-

MARCH 25, 1968

425

sion Act, which authorized the President to
continue such nondiscriminatory tariff treat-
ment for any Communist countries which were
receiving trade concessions as of December 16,
1963. The only Communist countries receiving
sucli concessions tlien were Pohind and Yugo-
slavia. Pursuant to Presidential determina-
tion, most-favored-nation trade treatment has
been continued for tliose two countries.

As you know, this administration proposed
to the 89th Congress the enactment of an East-
West Trade Relations Act ^ that would author-
ize the President to negotiate commercial
agreements with individual Eastern European
nations when he believed this to be in the na-
tional interest. These agreements would extend
nondiscriminatory tariff treatment in return
for eqiiivalent benefits to the United States. In
his Economic Eeport this year^ the President
again urged the Congress to provide the neces-
sary authority to expand trade with the coun-
tries of Eastern Europe and the Soviet Union.
We recognize, of course, that such legislation
raises serious issues at this time in the view
of some Members of Congi-ess.

Export-Import Bank Act

I do not believe it is appropriate for me to
discuss in detail the Export-Import Bank Act,
which is still under consideration by the Con-
gress, since you will be calling witnesses from
the Export-Import Bank itself. I would sim-
ply point out that if this act is extended in
such form as to preclude participation by the
Bank in financing exports to Eastern Europe,
it will be a serious limitation on the President's
policy of encouraging nonstrategic trade with
those countries on a normal commercial basis.
It will virtually rule out any possibility of
increasing the volume of our exports to that
area at a time when we are hopeful of getting
the greatest possible assistance to our balance-
of-payments problem from enlarging our fav-
orable merchandise trade balance.

Johnson Act

This act is administered by another agency —
the Department of Justice — but in general the
Johnson Act (18 U.S.C. 955) prohibits certain
financial transactions by private persons in the
United States involving foreign governments
which are in default in the payment of their
obligations to the United States. The prohibited
transactions include the making of "loans" to.

and the purchase or sale of "bonds, securities,
or other obligations"' of, a foreign government
which is within the statutory category.

The U.S.S.R. and all the countries of East-
ern Europe with the exception of Bulgaria are
governments in default in the payment of their
obligations to tlie United States within the
meaning of the Johnson Act. Yugoslavia is a
member both of the International Monetary
Fund and of the International Bank for Recon-
struction and Development and is thereby ex-
empted by the terms of the Johnson Act, as
amended, from the prohibitions therein.

The Attorney General has ruled that the
Johnson Act does not j^rohibit extensions of
credit "within the range of those commonly en-
countered in commercial sales of a comparable
character." The Attorney General has also
stated that the scope of the Johnson Act should
not be measured in terms of distinctions among
the various forms of financing export trade. He
determined that financing arrangements lie be-
yond the scope of the Jolmson Act "if they are
directly tied to specific export transactions, if
their terms are based upon bona fide business
considerations, and if the obligations to which
they give rise 'move exclusively within the rela-
tively restricted cliannels of banking and com-
mercial credit.' " Under section 11 of the Ex-
port-Import Bank Act of 1945, as amended,
transactions in which the Export-Import Bank
participates are exempt from the provisions of
the Johnson Act.

The effect of these interpretations is to clear
the way very substantially for private financing
of trade with Eastern Europe, although there
is the fact of the preference on the part of pri-
vate financing agencies for government guar-
antees or insurance — wliich goes back once
again to the question of the Export-Import
Bank legislation.

International Consideration of East-West Trade

Apart from the negotiations and activities
that stem from the specific legislative provisions
I have outlined, there liave been discussions of
East- West trade issues in several international
forums.

The Committee of Economic Advisers of the
North Atlantic Treaty Organization regularly
reviews general economic developments in Eu-
ropean Communist areas and coordinates ef-

' For background, see Hid.. May 30, 1006, p. S.38.
' For excerpts, see ibi<l., Feb. 26, 1968, p. 279.

426

DEPARTMENT OF STATE BULLETIN

forts to improve the bilateral economic and
other contacts of member countries with East-
ern countries. In addition, the NATO Commit-
tee has considered special problems, such as the
control of wide-diameter oil-pipe sales to the
Soviet Union and the question of credit policy
in East-West trade. NATO is the forum in
which we explore with our allies important as-
pects of our East -West policies — such as Cuban
or North Viet-Nam policies — including the
trade aspects of such policies.

The Organization for Economic Cooperation
and Development (OECD) has begun a discus-
sion of means of increasing nonstrategic East-
West trade. A working party met in Septem-
ber 1967 to review members' trade policies in
an etfort to identify obstacles both in the East
and the West. The discussions will continue in
1968 and will probably concentrate on trade ef-
fects to be expected from economic reforms go-
ing on in Eastern Europe, the specific effects on
trade of particular obstacles or of their removal,
prospects for industrial and technical coopera-
tion, future trade trends, and the role of prices
in trade between market economies and state
trading countries.

During 1967, discussions of ways to increase
East -West trade were continued in the Econom-
ic Commission for Europe. At its 22d session
in April, the ECE agreed on a declaration
which, among other points, stated the following :
"The member countries of the Economic Com-
mission for Europe shall also continue their
common efforts towards the expansion of trade
and to this end shall seek to remove the econom-
ic, administrative and trade policy obstacles to
the development of trade." Followmg the lines
of the resolution, a group of governmental ex-
perts met in October to prepare practical pro-
posals for the removal of economic, adminis-
trative, and trade policy obstacles to the devel-
opment of trade. That session was less than
wholly successful because some of the Eastern
European countries pressed for resolutions
obliging Western countries to extend both un-
conditional most-favored-nation tariff and non-
discriminatory quota treatment in all cases.
Some progress might still be possible in such
discussions if an approach of objective analysis
could be maintained.

In conclusion I would like to emphasize that
within the framework of applicable laws, we
intend to continue to carry out our responsi-
bilities for negotiating adequate multilateral
controls over strategic trade on the one hand,
as well as for encouraging nonstrategic trade

with Eastern Europe and the Soviet Union with-
in the intent of the President's policy on the
other hand. We do not have in mind special fa-
vors to encourage East- West trade. We propose
only to make it possible for jieaceful trade to
be carried on without special burdens or en-
cumbrance on our side when American com-
panies find it to their advantage to engage in
such trade. At this point in time while we are
engaged in hostilities in Viet-Nam, the atmos-
phere is clouded. But it is clear that it is in
our longrun interest to encourage peaceful con-
tacts with the countries of Communist Europe.
Increased trade and commercial relations can
be a force for constructive change in these coun-
tries and give them a greater stake in maintain-
ing peaceful relations with the free world.

Congressional Documents
Relating to Foreign Policy

90th Congress, 1st Session

Special Report of the National Advisory Council on In-
ternational Monetary and Financial Policies. Letter
from the Council transmitting its special report on
U.S. participation in proposed special funds of the
Asian Development Bank. H. Doc. 166. September 28,
1967. 26 pp.

Guidelines for Improving the International Monetary
System — Round Two. Report of the Subcommittee
on International Exchange and Payments of the
Joint Economic Committee. December 1967. 11 pp.
[Joint Committee print.]

The Soviet Drive for Maritime Power. Prepared for the
use of the Senate Committee on Commerce by the
Legislative Reference Service, Library of Congress.
December 1967. 35 pp. [Committee print.]

Planning-Programming-Bndgeting. PPBS and Foreign
Affairs. Memorandum prepared at the request of the
Subcommittee on National Security and Interna-
tional Operations of the Senate Committee on Gov-
ernment Operations. January 5, 1968. 10 pp. [Com-
mittee print.]

90th Congress, 2d Session

Fifty-first annual report of the United States Tariff
Ctimmission, fiscal year ended June 30, 1967. H. Doc.
236. 26 pp.

International Labor Organization's Recommendations
on Training and Welfare of Fishermen. I^etter from
the Assistant Secretary of State for Congressional
Relations transmitting the text of ILO recommenda-
tion No. 12.5; also the texts of ILO Convention No.
125 and ILO Convention No. 126. H. Doc. 201. Janu-
ary 1.^, 1968. 32 pp.

Survey of the Alliance for Progress. Study prepared at
the request of the Subcommittee on American Re-
publics Affairs of the Senate Foreign Relations Com-
mittee. Insurgency in Latin America. Prepared by
David D. Burks, associate professor of history. Uni-
versity of Indiana. January 15, 1968. 29 pp. [Com-
mittee print.]

MARCH 2.T, 1968

427

TREATY INFORMATION

Current Actions

MULTILATERAL

Atomic Energy

Agreement for the application of safeguards by the
International Atomic Energy Agency to the bilateral
agreement between the United States and Denmark
of July 25, 1955, as amended (TIAS 3309, 3758, 4093) ,
for cooperation concerning civil uses of atomic
energy. Signed at Vienna February 29, 1968. Entered
Into force February 29, 1968.

Bipnatures: Denmark, International Atomic Energy
Agency, United States.

Disputes

Convention on the settlement of investment disputes be-
tween states and nationals of other states. Done at
Washington March 18, 1965. Entered Into force Octo-
ber 14, 1966. TIAS 6090.
RaHflcation deposited: Somalia, February 29, 1968.

Grains

International grains arrangement, 1967, with annexes.
Open for signature at Washington October 15 until
and including November 30, 1967.'
RaHflcation to the Wheat Trade Convention de-
posited: Saudi Arabia, February 21, 1968.

Trade

Geneva (1967) protocol to the General Agreement on
Tariffs and Trade. Done at Geneva June 30, 1967.
Entered into force January 1, 1968.
Acceptances: Belgium,' Brazil,' Canada, Chile,* Euro-
pean Economic Community,' France,' Federal Re-
public of Germany,' Italy,' Luxembourg,' Nether-
lands,* Turkey, and United States, June 30, 1967 ;
Dominican Republic, July 4, 1967 ; Portugal, Sep-
tember 18, 1967 ; Finland, October 31, 1967 ;' Aus-
tralia, November 8, 1967 ; Malawi, November 24,
1967 ; Denmark, November 29, 1967 ; Sweden, De-
cember 1, 1967 ; Norway, December 21, 1967 ; Swit-
zerland, December 27, 1967 ; Austria, December 29,
1967; Peru, January 9, 1968; Spain, January 15,
1968; Greece, January 16, 1968.'
Ratifications deposited: Belgium, December 28, 1967 ;
European Economic Community, December 1, 1967 ;
Italy, February 1, 1968.
Agreement on implementation of article VI of the Gen-
eral Agreement on Tariffs and Trade. Done at Geneva
June 30, 1967. Enters into force July 1, 1968.
Acceptances: Belgium,' Canada, Denmark,* European
Economic Community,* Finland,' France,' Federal
Republic of Germany,' Italy,' Japan,' Luxembourg,*
Netherlands," Sweden," Switzerland,' United King-
dom, and United States, June 30, 1967; Norway,
December 21, 1967 ; Greece, January 16, 1968.*

Ratifications deposited: Belgium, December 28, 1967;
Denmark, December 1, 1967; European Economic
Community, December 1, 1967; Sweden, Decem-
ber 1, 1967 ; Switzerland, December 27, 1967.
Agreement relating principally to chemicals, supple-
mentary to the Geneva (1967) protocol to the General

Agreement on Tariffs and Trade. Done at Geneva

June 30, 1967.'

Acceptances: Belgium,' European Economic Com-
munity,* France,' Italy,' Switzerland,' United King-
dom, and United States, June 30, 1967.

Signature confirmed: European Economic Com-
munity, December 1, 1967.

Ratifications deposited: Switzerland, December 27,
1967; Belgium and France, December 28, 1967;
Italy, December 30, 1967.
Memorandum of agreement on basic elements for the

negotiation of a world grains arrangement. Done at

Geneva June 30, 1967.'

Acceptances: Argentina, Australia,' Belgium,' Can-
ada, Denmark,' European Economic Community,*
Finland," France," Federal Republic of Germany,
Italy,' Japan,' Luxembourg," Netherlands,' Nor-
way,* Sweden," Switzerland, United Kingdom, and
United States, June 30, 1967.

Signature confirmed: European Economic Com-
munity, December 1, 1967.

Ratifications deposited: Australia, July 13, 1967;
Denmark and Sweden, December 1, 1967 ; Norway,
December 21, 1967; Belgium, December 28, 1967.

BILATERAL

Indonesia

Agreement for sales of agricultural commodities, re-
lating to the agreement of September 15, 1967, as
amended (TIAS 6346, 4601). Signed at Djakarta
February 15, 1968. Entered into force February 15,
1968.

Japan

Agreement for cooperation concerning civil uses of
atomic energy. Signed at Washington February 26,
1968. Enters into force on the date on which each
Government shall have received from the other writ-
ten notification that it has complied with all statu-
tory and constitutional requirements for entry into
force.

Philippines

Agreement relating to the relinquishment by the United
States of the use of certain land at Subic Naval
Reservation, and the granting by the Philippines to
the United States the right to use certain other land
at Subic Bay. Effected by exchange of notes at
Manila September 21 and October 16, 1967. Entered
into force October 16, 1967.

' Not in force.

" Subject to ratification.

• Ad referendum.

' Subject to conclusion.

* Subject to parliamentary approval.

" Subject to ratification by the Swedish Riksdag.
' With a reservation.

428

DEPARTMENT OF STATE BtXLETIir

INDEX lUarch 35, 1968 Vol. LVIII, No. 1500

American Principles. "Great I'ower luvolves

Great Respousibility" (Joliusou) 403

Atomic Energ>'. U.S. and Japan Sign .Now Agreu-

uieut on I'eacefnl Uses of Atomic Energy . . -li;0

Congress

Congressional Docnments Relating to Foreign

Policy 427

Department Expresses Views on East-West

Trade (Bohlen, Solomon) 421

Disarmament. United States, United Kingdom,
and Soviet Union Propose Security Assur-
ances Resolution (Foster) 401

Europe. Department Expresses Views on East-
West Trade (Bohlen, Solomon) 421

India. Letters of Credence (Jung) 404

International Organizations and Conferences

Intor-Americau Cultural Countil Meets at Mara-
eay (Jolinson, Department announcement) . 41'J

Unite<l Stiites, I'nited Kingdom, and Soviet
Union Propose Security Assurances Resolu-
tion (Foster) 401

Israel. Letters of Credence (Rabin) .... 404

Japan. U.S. and Japan Sign New Agreement on

Peaceful Uses of Atomic Energy 420

Latin America

Inter-American Cultural Council Meets at Mara-
cay (Johnson, Department announcement) . 419

What Kind of Revolution in the Home Hem-
isphere? (Oliver) 410

Nigeria. Letters of Credence (lyalla) .... 404

Panama. Letters of Credence (Velasquez) . . 404

Presidential Documents

"Groat Power Involves Great Responsibility" . 403
Inter-American Cultural Council Meets at
Maraeay 419

Somali Republic. Letters of Credence (Azhari) . 404

Trade. Department Expresses Views on East-
West Trade (Bohlen, Solomon) 421

Treaty Information

Current Actions 428

U.S. and Japan Sign Xew Agreement on Peace-
ful Uses of Atomic Energy 420

U.S.S.R. United States, United Kingdom, and
Soviet Union Propose Security A.ssurances
Re.solution (Foster) 401

United Kingdom. United States, United King-
dom, and Soviet Union Proix>se Security As-
surances Resolution (Foster) 401

Vict-Nam. "A Certain Restlessness" About Viet-

Nam (Rostow) 405

Name Index

Azhari, Yusuf Omar 404

Bohlen, Charles E 421

Foster, William C 401

lyalla, Joe 404

Johnson, President 403,419

Jung, Ali Yavar 404

Oliver, Covey T 416

Rabin, Yitzhak 404

Rostow, Eugene V 405

Solomon, Anthony M 421

Velasquez, Jorge T 404

Check List of Department of State
Press Releases: March 4-1 0

Press releases may be obtained from the Office
of News, Department of State, Washington, D.C.
20520.

Relea.ses issued prior to March 4 which appear
in this issue of the Bulletin are Nos. 20 of
January 26, 30 of February 12, and 42 of Feb-
ruary 26.

No. Date Subject

44 3/4 Oliver: "What Kind of Revolu-
tion in the Home Hemisphere?"

*45 3/S Program for the visit of Mohamed
Ibrahim Egal, Prime Minister of
the Somali Republic.

t46 3/9 Oliver: "The Heartlands of the
Home Hemisphere."

* Xot printed.

t Held for a later issue of the Bulletin-.

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