Play Real Audio of Conference #30
Official White House
THE PRESIDENT: Good
afternoon. I have several announcements to make.
Simultaneous and identical
actions of United States Steel and other leading steel corporations,
increasing steel prices by some 6 dollars a ton, constitute a wholly
unjustifiable and irresponsible defiance of the public interest.
In this serious hour in our
nation's history, when we are confronted with grave crises in Berlin and
Southeast Asia, when we are devoting our energies to economic recovery
and stability, when we are asking Reservists to leave their homes and
families for months on end, and servicemen to risk their lives -- and
four were killed in the last two days in Viet Nam -- and asking union
members to hold down their wage requests, at a time when restraint and
sacrifice are being asked of every citizen, the American people will
find it hard, as I do, to accept a situation in which a tiny handful of
steel executives whose pursuit of private power and profit exceeds their
sense of public responsibility can show such utter contempt for the
interests of 185 million Americans.
If this rise in the cost of
steel is imitated by the rest of the industry, instead of rescinded, it
would increase the cost of homes, autos, appliances, and most other
items for every American family. It would increase the cost of machinery
and tools to every American businessman and farmer. It would seriously
handicap our efforts to prevent an inflationary spiral from eating up
the pensions of our older citizens, and our new gains in purchasing
It would add, Secretary
McNamara informed me this morning, an estimated one billion dollars to
the cost of our defenses, at a time when every dollar is needed for
national security and other purposes. It would make it more difficult
for American goods to compete in foreign markets, more difficult to
withstand competition from foreign imports, and thus more difficult to
improve our balance of payments position, and stem the flow of gold. And
it is necessary to stem it for our national security, if we are going to
pay for our security commitments abroad. And it would surely handicap
our efforts to induce other industries and unions to adopt responsible
price and wage policies.
The facts of the matter are
that there is no justification for an increase in the steel prices. The
recent settlement between the industry and the union, which does not
even take place until July 1st, was widely acknowledged to be
non-inflationary, and the whole purpose and effect of this
Administration's role, which both parties understood, was to achieve an
agreement which would make unnecessary any increase in prices.
Steel output per man is
rising so fast that labor costs per ton of steel can actually be
expected to decline in the next twelve months. And in fact, the Acting
Commissioner of the Bureau of Labor Statistics informed me this morning
that, and I quote: "Employment costs per unit of steel output in
1961 were essentially the same as they were in 1958. "
The cost of major raw
materials, steel scrap and coal, has also been declining, and for an
industry which has been generally operating at less than two-thirds of
capacity, its profit rate has been normal and can be expected to rise
sharply this year in view of the reduction in idle capacity. Their lot
has been easier than that of a hundred thousand steel workers thrown out
of work in the last three years. The industry's cash dividends have
exceeded 600 million dollars in each of the last five years, and
earnings in the first quarter of this year were estimated in the
February 28th Wall Street Journal to be among the highest in history.
In short, at a time when
they could be exploring how more efficiency and better prices could be
obtained, reducing prices in this industry in recognition of lower
costs, their unusually good labor contract, their foreign competition
and their increase in production and profits which are coming this year,
a few gigantic corporations have decided to increase prices in ruthless
disregard of their public responsibilities.
The Steel Workers Union can
be proud that it abided by its responsibilities in this agreement, and
this government also has responsibilities, which we intend to meet.
The Department of Justice
and the Federal Trade Commission are examining the significance of this
action in a free, competitive economy.
The Department of Defense
and other agencies are reviewing its impact on their policies of
procurement, and I am informed that steps are underway by those Members
of the Congress who plan appropriate inquiries into how these price
decisions are so quickly made, and reached, and what legislative
safeguards may be needed to protect the public interest.
Price and wage decisions in
this country, except for very limited restrictions in the case of
monopolies and national emergency strikes, are and ought to be freely
and privately made, but the American people have a right to expect in
return for that freedom, a higher sense of business responsibility for
the welfare of their country than has been shown in the last two days.
Some time ago I asked each
American to consider what he would do for his country and I asked the
steel companies. In the last 24 hours we had their answer.
QUESTION: Mr. President, --
THE PRESIDENT: Just one -- I
have one other statement here.
Mr. Hatcher is going to
release a statement in regard to the release of the Guards. Let me say
in summary that Secretary McNamara and I have carefully reviewed our
progress in achieving permanent increases in our military strength. We
have concluded that the rate of progress of this effort is such that if
there is no serious deterioration in the international situation between
now and August, we shall be able in that month to release all those who
were called involuntarily. Our continuing strength after this release
will be much increased over what it was a year ago.
Just as an example, the
number of our combat-ready Army Divisions in active service after the
release will be 16, as against 11 a year ago. The release is not the
result of any marked change in the international situation, which
continues to have many dangers and tensions. It is the result, rather,
of our successful buildup of permanent instead of emergency strength.
The units we release will
remain available, in a new and heightened state of combat readiness, if
a new crisis should arise, requiring their further service. I know that
I speak for all of our countrymen in expressing our appreciation to all
those who served, under the adverse conditions of living in camps and
being taken away from their families. And their service, and the
willingness of the great, great majority of all of them to do this
uncomplainingly, I think, should be an inspiration to every American.
And lastly, last Saturday I
issued an Executive Order creating a Board of Inquiry to inquire into
the issues involved in the current labor dispute in the West Coast
maritime industry. The Board of Inquiry filed its written report with me
today. In its unanimous report, the Board stated, quote:
"The current strike, if
continued, will affect approximately 130 cargo and passenger ships,
including those which constitute the principal mode of transportation of
passengers and vital cargo to and from the State of Hawaii."
Other reports I have
received clearly manifest that a continuation of this strike imperils
the national health and safety. I have therefore instructed the Attorney
General to seek an injunction against this strike, under the national
emergency provisions of the Labor-Management Relation Act of 1947. While
an injunction will restore the West Coast maritime industry to full
operation, and return the striking members to work for 80 days, it
should not, and I hope will not, interfere in any way with efforts
towards full settlement.
I call upon the parties to
make that effort, to achieve that settlement quickly. However, the
public interest does not permit further delay in applying for an
injunction. Consequently, I have made the decision to direct the
Attorney General to apply for an appropriate order.
QUESTION: Mr. President, the
unusually strong language which you used in discussing the steel
situation would indicate that you might be considering some pretty
strong action. Are you thinking in terms of requesting or reviving the
need for wage-price controls?
THE PRESIDENT: I think that
my statement states what the situation is today. This is a free country.
In all the conversations which were held by members of this
Administration and myself with the leaders of the steel union and the
companies, it was always very obvious that they could proceed with
freedom to do what they thought was best within the limitations of law.
But I did very clearly emphasize on every occasion that my only interest
was that in trying to secure an agreement which would not provide an
increase in prices, because I thought that price stability in steel
would have the most far-reaching consequences for industrial and
economic stability and for our position abroad, and price instability
would have the most far-reaching consequences in making our lot much
When the agreement was
signed, and the agreement was a moderate one, and within the range of
productivity increases, as I have said -- actually, there will be
reduction in cost per unit during the next year. I thought, I was
hopeful, we had achieved our goal. Now the actions that will be taken
will be -- are being now considered by the Administration. The
Department of Justice is, particularly in view of the very speedy action
in other companies who have entirely different economic problems facing
them than did United States Steel, the speed with which they moved, it
seems to me to require an examination of our present laws, and whether
they are being obeyed, by the Federal Trade Commission, particularly to
the Department of Justice. And I am very interested in the prospective
investigations that will be conducted in the House and Senate, and
whether we shall need additional legislation, which I would come to very
reluctantly. But I must say the last 24 hours indicates that those with
great power are not always concerned about the national interest.
QUESTION: In your
conversation with Mr. Blough yesterday, did you make a direct request
that this price increase be either deferred or rescinded?
THE PRESIDENT: I was
informed about the price increase after the announcement had gone out to
the papers. I told Mr. Blough of my very keen disappointment and what I
thought would be the most unfortunate effects of it. And of course we
were hopeful that other companies who I have said, have a different
situation in regard to profits and all of the rest than U.S. Steel. They
all have somewhat different economic situations.
I was hopeful particularly
in view of the statement in the paper by the President of Bethlehem in
which he stated -- though now he says he is misquoted -- that there
should be no price increase, and we are investigating that statement. I
was hopeful that the others would not follow the example, and therefore
the pressures of the competitive market place would bring United States
Steel back to their original prices. But the parade began. But it came
to me after the decision was made. There was no prior consultation or
information given to the Administration.
QUESTION: Mr. President, now
that General Clay is coming home from Berlin, don't you think that
service wives have borne the brunt of our gold shortage long enough, and
should be permitted to join their soldier husbands in Europe? After all,
you could almost say that service couples have had to bear a "cross
cost of gold" alone, and in a very lonely way. Spring is here, and
everyone knows that the GIs can get into much less trouble and do their
jobs better if their wives and kids are with them.
THE PRESIDENT: I agree, and
we are very sympathetic, and we are trying to make an analysis of how
important this saving is to our general problem. As I said, it costs us
three billion dollars to maintain our forces and bases overseas. That
money must be earned by a surplus of exports over imports. I have asked
Secretary McNamara to try to reduce that in the next 12 to 18 months by
a billion, one hundred million, in order to try to bring this gold flow
into balance, and that means taking a third out of the Defense
Department without reducing its strength. So that's why these women are
bearing hardships and these families, and that is why I contrast it with
such unhappiness to the last 24 hours, because the fact of the matter is
if we are not able to compete, if this results in a larger increase of
imports from foreign markets, and therefore lowers our dollar
advantages, then those wives are going to have to stay home.
QUESTION: Mr. President,
when the Strategic Air Command had a false alarm for a few moments last
fall, were you notified, and if not, do you think you should have been,
and have you made arrangements to be, if there are any cases in the
THE PRESIDENT: That story,
in my opinion, was overstated. There was a breach in the communications
between the base at Thule and our Continental Command. As you know, we
are on a 15 minute alert. This lasted for a few seconds. General Power
alerted those forces which are on a standby basis. There are constant
drills. It was not that we were, as I saw in some papers, really those
in Europe, a few seconds from war, because the fact of the matter is it
would have taken many, many -- several hours before they could have
taken off, and begun to fly, and we were always in control. So that I
thought General Power took the right action before anything was done
which would in any way have threatened the security of the United
States. Of course, the communications would have become immediate, but
there is always this problem of being on the alert.
QUESTION: Mr. President, if
I could get back to steel for a minute, you mentioned an investigation
into the suddenness of the decision to increase prices. Did you -- is it
the position of the Administration that it believed it had the assurance
of the steel industry at the time of the recent labor agreement that it
would not increase prices? Is that a breach of their --
THE PRESIDENT: We did not
ask either side to give us any assurance, because there is a very proper
limitation to the power of the government in this free economy. All we
did in our meetings was to emphasize how important it was that there be
price stability, and we stressed that our whole purpose in attempting to
persuade the union to begin to bargain early and to make an agreement
which would not affect prices, of course was for the purpose of
maintaining price stability. That was the thread that ran through every
discussion which I had, or Secretary Goldberg had. We never at any time
asked for a commitment in regard to the terms, precise terms of the
agreement, from either Mr. McDonald or Mr. Blough representing the steel
company, because in our opinion that would be passing over the line of
propriety. But I don't think that there was any question that our great
interest in attempting to secure the kind of settlement that was finally
secured was to maintain price stability, which we regard as very
essential at this particular time. That agreement provided for price
stability -- up till yesterday.
QUESTION: Mr. President,
could you interpret for us the significance of General Clay's return?
Does it mean that the Administration now believes that the Berlin crisis
THE PRESIDENT: No, no. When
he came with us, as you know, he was the responsible officer on the
Continental Can Company, and he said he would take leave of absence till
January. And then in January we asked him to stay further, but he has
said for several months now that he really felt that his obligation was
to return. He has recommended very highly the responsible Americans who
are there. When he comes back tomorrow I am going to ask him, and I am
sure he will respond, to continue to act as consultant to me on the
matter of Berlin, to make periodic visits and to be available to return
there at any time that we should conclude that his presence would be
valuable. So that we have -- I noticed that Mayor Brandt said that
General Clay might be more helpful to the cause here than he would be
even there, and I think that what the Mayor meant was that his
experience there and his work in the last seven months would be very
valuable to the Administration. So his service continues and the problem
in Berlin continues.
QUESTION: Mr. President, in
your statement on the steel industry, sir, you mentioned a number of
instances which would indicate that the cost of living will go up for
many people if this price increase were to remain effective. In your
opinion, does that give the steel workers the right to try to obtain
some kind of a wage increase to catch up?
THE PRESIDENT: No, rather
interestingly, the last contract was signed on Saturday with Great
Lakes, so that the steel union is bound for a year, and of course I am
sure would have felt like going much further if the matter had worked
out as we had all hoped. But they have made their agreement and I am
sure they are going to stick with it, but it does not provide for the
sort of action you have suggested.
QUESTION: Still on steel,
Senator Gore advocated today legislation to regulate steel prices
somewhat in the manner that public utility prices are regulated, and his
argument seemed to be that the steel industry had sacrificed some of the
privileges of the free market because it wasn't really setting its
prices on a supply and demand, but what he called "administered
Your statement earlier, and
your remarks since, indicate a general agreement with that kind of
approach. Is that correct?
THE PRESIDENT: No, Mr.
Morgan. No, I don't think that I have stated that. I would have to look
and see what Senator Gore has suggested. I am not familiar with it. What
I said was that we should examine what can be done to try to minimize
the impact on the public interest of these decisions, although we had,
of course, always hoped that those involved would recognize that.
I would say that what must
disturb Senator Gore and Congressman Celler and others -- Senator
Kefauver, will be the suddenness by which every company in the last few
hours, one by one as the morning went by, came in with their almost, if
not identical, almost identical price increases, which isn't really the
way we expect the competitive private enterprise system to always work.
QUESTION: Mr. President,
would you clarify, please, the United States position in the New Guinea
dispute between The Netherlands and Indonesia? Recently there have been
reports of displeasure from The Netherlands that proposals put forward
by the United States were not fair to The Netherlands.
THE PRESIDENT: Well, I
agree. I think everybody is displeased, really, with our role, because
our role is an attempt -- Ambassador Bunker's role has been, under the
direction of U Thant, to try to see if we can bring some adjustment to
prevent a military action which would be harmful to the interests of
both countries with which we desire to be friendly, so I suppose it is
hard to think of any proposal that we could make which would be welcome
on both sides.
I am hopeful that if we can
be useful, we will continue to try to be. If both sides feel that we
cannot be, then perhaps others can take on this assignment, or perhaps
it can be done bilaterally. But Ambassador Bunker is a diplomat of long
experience and great skill, and our only interest is to see if we can
have a peaceful solution which we think is in the long-range interests
of the Free World -- of our Allies -- with whom we are allied, the
Dutch, and the Indonesians, whom we would like to see stay free. So that
the role of the mediator is not a happy one, and we are prepared to have
everybody mad if it makes some progress.
QUESTION: Mr. President, in
connection with the steel situation again, is there not action that
could be taken by the Executive Branch in connection with direct
procurement of steel under the Administration of the Agency for
International Aid -- I mean the Agency. For example I think the
government buys about a million tons of steel. Now could not the
government decide that only steel -- steel should be purchased only at
the price, say, of yesterday, rather than today, and also in case ---
THE PRESIDENT: That matter
was considered, as a matter of fact, in a conversation between the
Secretary of Defense and myself last evening, but at that time we were
not aware that nearly the entire industry was about to come in, and
therefore the amount of choice we have is somewhat limited.
QUESTION: Sir, part two on
this thing. In the case of identical bids which the government is
sometimes confronted with, they decide to choose the smaller business
unit rather than the larger.
THE PRESIDENT: I am hopeful
that there will be those who will not participate in this parade and
will meet the principle of the private enterprise competitive system in
which everyone tries to sell at the lowest price commensurate with their
interests. And I am hopeful that there will be some who will decide that
they shouldn't go in the wake of U.S. Steel. But we have to wait and see
on that, because they are coming in very fast.
QUESTION: Mr. President, two
years ago after the settlement, I believe steel prices were not raised.
THE PRESIDENT: That's right.
QUESTION: Do you think there
was an element of political discrimination in the behavior of the
industry this year?
THE PRESIDENT: I would not
-- and if there was, it doesn't really -- if it was, if that was the
purpose, that is comparatively unimportant to the damage that -- the
country is the one that suffers. If they do it in order to spite me, it
really isn't so important.
QUESTION: Mr. President, to
carry a previous question just one step further, as a result of the
emphasis that you placed on holding the price line, did any word or
impression come to you from the negotiations that there would be no
price increase under the type of agreement that was signed?
THE PRESIDENT: I will say
that in our conversations we asked for no commitments in regard to the
details of the agreement or in regard to any policies of the union or
the company. Our central thrust was that price stability was necessary
and that the way to do it was to have a responsible agreement, which we
Now at no time did any one
suggest that if such an agreement was gained that it would be still
necessary to put up prices. That word did not come until last night.
QUESTION: Mr. President,
there has been a price increase in Cuba as well. Mr. Castro has
increased the price that he has put on human life in the release or the
tentative release of the prisoners captured in the abortive invasion
attempt last year. Would you comment on this, please?
THE PRESIDENT: Well, I think
that all of us had hoped that the day when men were put on the block had
long ago passed from this Hemisphere. And it has from every country
until very recently in Cuba.
I think Mr. Castro knows
that the United States government can not engage in a negotiation like
that, and he knows very well that the families cannot raise these
millions of dollars.
It's rather interesting --
so what he has done really in effect is sentence them to thirty years in
prison -- it is rather interesting that Castro himself, when he engaged
in an operation under a dictator whom he had been harshly critical of,
that he was let out of prison, after an open trial, in fifteen months.
He regards for his own countrymen, not the countrymen who from his point
of view may have been wrong, but who fought in the open, and who took
their chances, and who are young men -- he regards the appropriate
treatment for them, and for thousands of other Cubans, to be this long
prison sentence of thirty years which, in my opinion, is why Mr. Castro
is increasingly isolated in the company of free men.
QUESTION: Mr. President, the
steel industry is one of a half dozen which has been expecting tax
benefits this summer through revision of the depreciation schedules.
Does this price hike affect the Administration's actions in this area?
THE PRESIDENT: Well, it
affects our budget. Secretary Dillon and I discussed it this morning. Of
course, all this matter is being very carefully looked into now.
QUESTION: The Presidents of
Mexico and of Brazil announced the principle of adherence to
non-intervention between the Communist and the capitalist blocs. Does
this accord with what President Goulart told you when he was here in
THE PRESIDENT: Yes. I
haven't seen the joint statement, but I am sure it does. I think we are
bound together through the Organization of American States. It's
difficult to comment on a joint statement that I have not read, but I
think that President Goulart says the same in Mexico as he does in
QUESTION: Mr. President,
General Lemnitzer has just recently conferred our Legion of Merit on a
Japanese officer who apparently planned the Pearl Harbor attack. Can you
think of any particular reason for this award?
THE PRESIDENT: Yes. The
reason that was given was that he had been a distinguished officer of
the Japanese Air Force, that his relations with the United States had
been extremely cooperative. He was acting as a military officer, and I
thought that -- I think that these kinds of days of the war are over. I
thought that it was appropriate. He's a distinguished flier, and while
we all regret Pearl Harbor and everything else, but we are in a new era
in our relations with Japan, fortunately.
QUESTION: Mr. President?
Sir, what are you going to do about American soldiers getting killed in
THE PRESIDENT: Well, I am as
-- extremely concerned about American soldiers who are, in a great many
areas, in hazard. We are attempting to help Viet Nam maintain its
independence and not fall under the domination of the Communists. The
government has stated that it needs our assistance in doing it. It is
very -- and it presents a very hazardous operation. In the same sense
that World War II, World War I, Korea, a good many thousands and
hundreds of thousands of Americans died. So that these four sergeants
are in that long roll. But we cannot desist in Viet Nam. And I think it
is -- the fact that these men operated very far from home, very far
indeed from Saigon, and great danger, and there are many others. The
fact of their contributions, as well as the Wisconsin and Texas National
Guard, it is in that setting that I look at the present actions.
Q. (MERRIMAN SMITH, UPI):
Thank you, Mr. President.