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Press Conference October 9, 1963

THE PRESIDENT I have a statement to make.  The Soviet Union and various Eastern European countries have expressed a willingness to buy from our private grain dealers at the regular world price several million tons of surplus American wheat or wheat flour for shipment during the next several months.  They may also wish to purchase from us surplus feed grains and other agricultural commodities.

After consultation with the National Security Council, and informing the appropriate leaders of the Congress, I have concluded that such sales by private dealers for American dollars or gold, either cash on delivery or normal commercial terms, should not be prohibited by the Government.  The Commodity Credit Corporation in the Department of Agriculture will sell to our private grain traders the amount necessary to replace the grain used to fulfill these requirements, and the Department of Commerce will grant export licenses for their sale with the commitment that these commodities are for delivery to and use in the Soviet Union and Eastern Europe only.

An added feature is the provision that the wheat we sell to the Soviet Union will be carried in available American ships, supplemented by ships of other countries as required.  Arrangements will also be made by the Department of Commerce to prevent any single American dealer from receiving an excessive share of these sales.

No action by the Congress is required, but a special report on the matter will be sent to both Houses tomorrow.

Basically, the Soviet Union will be treated like any other cash customer in the world market who is willing and able to strike a bargain with private American merchants.  While this wheat, like all wheat sold abroad, will be sold at the world price, which is the only way it can be sold, there is in such transactions no subsidy to the foreign purchaser; only a savings to the American taxpayer on wheat the Government has already purchased and stored at the higher domestic price which is maintained to assist our farmers. This transaction  has  obvious benefit for the United States.  The sale Of 4 million metric tons of wheat, for example, for an estimated $250 million, and additional sums from the use of American shipping, will benefit our balance of payments and gold reserves by that amount and substantially strengthen the economic outlook for those employed in producing, transporting, handling, and loading farm products.

Wheat, moreover, is our number one farm surplus today, to the extent of about 1 billion unsold bushels.  The sale of around 150 million bushels of wheat would be worth over $200 million to the American taxpayer in reduced budget expenditures.  Our country has always responded to requests for food from governments of people who needed it, so long as we were certain that the people would actually get it and know where it came from.

The Russian people will know they are receiving American wheat.  The United States has never had a policy against selling consumer goods, including agricultural commodities, to the Soviet Union and Eastern Europe.  On the contrary, we have been doing exactly that for a number of years, and to the extent that their limited supplies of gold, dollars, and foreign exchange must be used for food, they cannot be used to purchase military or other equipment.

Our allies have long been engaged in extensive sales of wheat and other farm products to the Communist bloc, and, in fact, it would be foolish to halt the sales of our wheat when other countries can buy wheat from us today and then sell this flour to the Communists.  In recent weeks Australia and NATO allies have agreed to sell 10 million to 15 million tons of wheat and wheat flour to the Communist bloc.

This transaction advertises to the world as nothing else could the success of free American agriculture.  It demonstrates our willingness to relieve food shortages, to reduce tensions, and to improve relations with all countries.  And it shows that peaceful agreements with the United States which serves the interests of both sides are a far more worthwhile course than a course of isolation and hostility.

For this Government to tell our grain traders that they cannot accept these offers, on the other hand, would accomplish little or nothing.  The Soviets would continue to buy wheat and flour elsewhere, including wheat flour, from those nations which buy our wheat.  Moreover, having for many years sold them farm products which are not in surplus, it would make no sense to refuse to sell those products on which we must otherwise pay the cost of storage.  In short, this particular decision with respect to sales to the Soviet Union, which is not inconsistent with many smaller transactions over a long period of time, does not represent a new Soviet-American trade policy.  That must await the settlement of many matters.  But it does represent one more hopeful sign that a more peaceful world is both possible and beneficial to us all.

Q. Mr. President, do you have any misgivings about possible political repercussions from your decision?

THE PRESIDENT.  Well, I suppose there will be some who will disagree with this decision. That is true about most decisions.  But I have considered it very carefully and I think it is very much in the interest of the United States.  As I said before, we have got 1 bullion bushels of this in surplus, and American taxpayers are paying to keep it, and I think we can use the $200 million or  $250 million of gold which will help our balance of payments.  I think it is in our interest, particularly in view of the fact that the sales are being made by other countries.

[2.] Q.  Mr. President, could you discuss some of the recent public accounts of CIA activities in South Viet-Nam, particularly the stories or reports of how the CIA has undertaken certain independent operations, or independent of other elements of the American Government, that are in South Viet-Nam?

THE PRESIDENT.  I must say I think the reports are wholly untrue.  The fact of the matter is that Mr. McCone sits in the National Security Council.  I imagine I see him at least three or four times a week, ordinarily.  We have worked very closely together in the National Security Council in the last 2 months attempting to meet the problems we faced in South Viet-Nam.  I can find nothing, and I have looked through the record very carefully over the last 9 months, and I could go back further, to indicate that the CIA has done anything but support policy.  It does not create policy; it attempts to execute it in those areas where it has competence and responsibility.  I know that the transfer of Mr. John Richardson, who is a very dedicated public servant, has led to surmises.  But I can just assure you flatly that the CIA has not carried out independent activities but has operated under dose control of the Director of Central Intelligence, operating with the cooperation of the National Security Council and under my instructions.

So I think that while the CIA may have made mistakes, as we all do, on different occasions, and has had many successes which may go unheralded, in my opinion in this case it is unfair to charge them as they have been charged.  I think they have done a good job.

[3.] Q. Mr. President, you are meeting tomorrow with Soviet Foreign Minister Gromyko under somewhat different conditions than you met a year ago.  I am wondering if you would care to give us your assessment of the principal objective of your talk tomorrow with him?

THE PRESIDENT.  Well, this continues to be an exchange of views on those matters which are at issue between the Soviet Union and the United States.  In my speech before the General Assembly, I indicated those areas where the Soviet Union and the United States had disagreement.  It is my hope that those disagreements will not lead to war.  I am hopeful that what has happened in the last months will lessen that prospect.  Really, what has happened since a year ago when I saw Mr. Gromyko will lessen the prospect of a military clash.  But the differences go on. The systems are very different.

Mr. Khrushchev has said that there is no coexistence in the field of ideology.  There are bound to be very severe matters which concern us on which the Soviet Union and the United States have very different views.  As we don't want these disputes and frictions to escalate into military clashes, it is worthwhile to have consultations.  The Secretary of State has been having them for several weeks, and I will see Mr. Gromyko this afternoon to just go over the ground, which has already been laid by the Secretary of State.

Q. Mr. President, will you discuss with Mr. Gromyko the joint moon project proposal that you made before the U.N., and, if not, will that be pursued through some other channels?

THE PRESIDENT.  We have received no response to our-to that proposal, which followed other proposals made on other occasions.  As I said, our space program from the beginning has been oriented towards the peaceful use of space.  That is the way the National Space Agency was set up.  That is the position we have taken since my predecessor's administration.  I said this summer that we were anxious to cooperate in the peaceful exploration of space, but to do so, of course, requires the breakdown of a good many barriers which still exist.  It is our hope those barriers, which represent barriers of some hostility, some suspicion, secrecy, and the rest, will come down.  If they came down, of course, it would be possible for us to cooperate.  So far, as you know, the cooperation has been limited to some exchange of information on weather and other rather technical areas.

We have had no indication, in short, that the Soviet Union is disposed to enter into the kind of relationship which would make a joint exploration of space or to the moon possible.  But I think it is important that the United States continue to emphasize its peaceful interest and its preparation to go quite far in attempting to end the barrier which has existed between the Communist world and the West and to attempt to bring, as much as we can, the Communist world into the free world of diversity which we seek.  So the matter may come up.  But I must say we have had no response, which would indicate that they are going to take us up on it.

[4.] Q. Mr. President, in the reported agreement in principle between Russia and the United States to ban nuclear weapons from outer space, has the issue of verification come up in any way, and if so, sir, in what way?

THE PRESIDENT.  No, there is not an agreement.  The United States has stated it would not put weapons in outer space.  We have no military use for doing so, and we would not do so.  The Soviet Union has stated that it does not intend to.  We are glad of that.  There is no way we can verify that, but we are glad to hear the intention.  We must recognize that there is no secure method of determining that someday they may not decide to do so.  So we obviously have to take our own precautions.  But we do not intend to, although we intend to protect our security, and we are glad to hear the Soviet Union does not intend to.

This is a matter, it seems to me, that can be best handled not through any bilateral agreement, but as a General Assembly matter, because other countries may someday have the same capability, and I think every country should declare that they are not going to put atomic weapons in the atmosphere, which could threaten not only the security of a potential adversary, but our own security, if for some reason the weapons should miscalculate and descend on us.  I think it is a good thing to keep them out of the atmosphere.

[5.] Q. Mr. President, last week in California, you said something that led some people to believe that you had changed your opposition to a shorter workweek.  Is that correct?

THE PRESIDENT.  No, no, I am still opposed to it.  What I was talking about was that inevitably as the century goes on, in my judgment, as machines increasingly take the place of men, that we will have more leisure, and therefore we should take those steps in the field of conservation, resource development, and recreation, which will prepare us for that period.  But that is not talking about today or tomorrow.  It would be a great mistake for us to reduce our 40-hour workweek now. it would affect our competitive position abroad, and I think that the needs of American production are such that we ought to stick with our 40-hour week.  I see the time coming, as I was saying, at the end of the century, perhaps sooner than that, when there may be a change in that, but not now.

[6.] Q. Could you say, sir, how our policy is progressing in Vietnam in meeting what you established as desirable last month, a change of personnel and a change of policy that would help the government there better get on with the war?

THE PRESIDENT.  I don't think that there have been significant changes of the kind that-

Q. For better or worse?

THE PRESIDENT.  I say I don't think there have been changes in the situation in the last month.  I think we are still dealing with the same problems we were dealing with a month ago.

[7.] Q. Mr. President, was Assistant Secretary Martin's statement cleared with you, and if so, does it represent a reversal of your policy on dictatorships in Latin America?

THE PRESIDENT. No, I was informed generally of what Mr. Martin was saying, and in fact, I re-read it this afternoon.  In the first place, our policy is not reversed.  If attention could be drawn to Secretary Rusk's statement of Friday evening in regard to the coups in the Dominican Republic and Honduras, we made it very clear that we are opposed to an interruption of the constitutional system by a military coup, not only because we are all committed under the Alliance for Progress to democratic government and progress and progressive government, but also because of course dictatorships are the seedbeds from which communism ultimately spring's up.

So we are opposed to military coups, and it is for that reason that we have broken off our relations with the Dominican Republic and Honduras.  It is for that reason that we attempted to work on the situation in Peru, which led, I think in part because of the American effort, mostly because of the Peruvian people's effort, to free elections.

Mr. Martin was merely attempting to explain some of the problems in Latin America, why coups take place, and what problems they present us with.  But we are opposed to coups, because we think that they are defeating, self-defeating, and defeating for the hemisphere, and we are using our influence and I am sure the other countries of the hemisphere are using their influence in those areas where coups have taken place to provide for an orderly restoration of constitutional processes.

Q. Beyond the immediate action, sir, in relation to the Dominican Republic and Honduras, does the United States plan any general enunciation of policy in regard to military regimes, or does it contemplate asking any general hemispheric action in regard to this?

THE PRESIDENT.  Well, I have just described, I have just attempted to describe what our policy is towards coups.  And as far as our national policy, it was described on Friday, with the withdrawal of our diplomatic-our Ambassadors, our aid, our military assistance, and all the rest.  So I think we have made very clear our policy and our interest in providing for a return to, as I have said, constitutional processes in those two countries.

We are working with the other members of the Organization of American States so that together we can bring about a return to order in those countries and a return to peaceful procedures.  That is the policy of the United States.  I have just enunciated it again.

Q. I was asking specifically, sir, whether the United States contemplated any broader hemispheric action in terms of general action by the OAS in this respect.

THE PRESIDENT.  Not at this time.  This is a matter which I think all the other countries of the OAS have to decide what they are going to do.  I think the United States has made its position very clear.

Q. Mr. President, are you satisfied in retrospect that the United States did all it could, short of the use of force, to prevent the Dominican and Honduran coups?

THE PRESIDENT.  Yes, I am.  I have looked over the conversations, the minutes, of cables and so on, and I think we did.  This idea that we ought to send the United States Marines into Honduras, which, of course, we couldn't have done under the conditions, because of the time gap, I think is a very serious mistake.  That is not the way, in my opinion, and I think Mr. Martin was attempting to explain that that is not the way for democracy to flourish.

So I think we did the best we could, It may be possible to always do better, but we did the best we could, and we are going to continue to do so.

[8.] Q. Mr. President, there is a widespread impression that you expect Senator Barry Goldwater to be the Republican nominee for President next year.  I think your speech in Salt Lake City had something to do with that.  Is that your expectation?

THE PRESIDENT.  I think he can do it.  I think it is possible for him to do it.  But he has a long road to O, recalling the situation in September 1959, October 1959- I think Senator Goldwater has a trying 7 or 8 months which will test his endurance and his perseverance and his agility.

Q. Are you basing that on your own experience in 1960?

THE PRESIDENT.  Yes.

Q. Former President Eisenhower wrote recently in an article that he was unclear about Senator Goldwater's views on certain major issues.  I wonder, sir, whether you share this uncertainty and if so how you think Senator Goldwater should better express himself.

THE PRESIDENT.  Senator Goldwater is speaking frequently, and he is saying what he thinks as of the time he speaks, and I think, therefore, we have an opportunity to make a judgment of where he stands.  I don't think Senator Goldwater has ever been particularly deceptive.  I think he has made very clear what he is opposed to, what he is for.  I have gotten the idea.  I think that President Eisenhower will, as time goes on.

[9.] Q. Mr. President, to keep the ball rolling, there are a couple of obvious candidates in another party who say they are going to make their announcement of their decisions in December or January.  Have you set a timetable for yourself or are you already a candidate?

THE PRESIDENT.  No, no, I think I will wait-this next year-I can wait longer.

[10.] Q. Mr. President, the Valachi crime committee hearings are getting very mixed reviews.  As a former congressional investigator, I wonder whether you feel they are serving any useful purpose?

THE PRESIDENT.  No, I wouldn't want-I haven't commented on the Senate procedures and I wouldn't now on this hearing or other hearings.  That is a judgment for Senator McClellan and the committee.  I do think that we shouldn't get a distorted idea from the hearings.  I think-particularly as Columbus Day comes up I think there may be some feeling of some people that the name Valachi perhaps causes embarrassment to other American citizens.  I don't think it should.  These difficulties occur in a good many different racial groups, and I think that they ought to feel a good deal of pride in what they have done and not be concerned because a Valachi or an Irish name or some other name may occasionally get in trouble.

[11.] Q. Mr. President, Congressman Pucinski of Illinois has said to me, and I think he has proposed to Secretary Wirtz, that we should have three categories instead of two in our labor statistics, general statistics.  He is proposing that we have employed, unemployed, and unemployables, because of their lack of skills.  Would you agree with the Congressman that this would be helpful in highlighting the problem we have in employment and education?

THE PRESIDENT.  I wouldn't want to put it in that kind of a category.  I think I can see there might be some merit in trying to mark out those who are unemployed because of structural unemployment, those who are unemployed because of the seasonal nature of their work, those who are unemployed because of illiteracy or lack of motivation.  I think all that information-we have a good deal of it-a good deal of technical information, but I don't think I would label anybody in the United States unemployable.

[12.] Q. Mr. President, how do you feel about Senator Gruening's proposal to set up a congressional committee as a watchdog over the CIA?

THE PRESIDENT.  I think the present committees-there's one in both the House and Senate which maintains very close liaison with the CIA-are best, considering the sensitive nature of the Central Intelligence Agency's work.

As you know, there is a congressional committee in the House, one in the Senate, composed of members of the Appropriations Committee and the Armed Services Committee.  They meet frequently with Mr. McCone.  He also testifies before the Foreign Relations Committees of House and Senate and the general Armed Services Committee.  And I think the Congress has through that organization the means of keeping a liaison with him.

In addition, I have an Advisory Council which was headed by Dr. Killian formerly, now Mr. Clark Clifford, which includes Jimmie Doolittle and others, and Robert Murphy, who also served as an advisory committee to me on the work of the intelligence community.  I am well satisfied with the present arrangement.

[13.] Q. Sir, there seems to be some connection between the attempt of the State Department to discharge Mr. Otto Otepka, the Security Officer, there seems to be some connection between the fact that he gave much information to the Senate Internal Security Subcommittee about various employees of the State Department-William Arthur Wieland and Walt W. Rostow and many others.  Also Secretary Rusk has now put forth an order that employees of the State Department cannot talk or give information to this congressional committee.  Isn't that a direct violation of law?

THE PRESIDENT.  No, it isn't.

Q. That Government employees are allowed to give information to Members of Congress and to committees?

THE PRESIDENT.  By what means? You mean secret dispatches?

Q. Well, any information.  The law doesn't say what it will be.  It says that any Government employee can give information to Members of Congress or to the committees.

THE PRESIDENT.  Well, let me just say that the Secretary of State has been prepared to testify since August before the Internal Security Committee and discuss the case very completely-

Q. Well, but-

THE PRESIDENT.  Excuse me.  There was a hearing scheduled for early September, but because of the Labor Day weekend that hearing did not take place.  The Secretary of State stands ready; he is the responsible officer.  Now the best thing to do is to give the Secretary of State a chance to explain the entire case, because in all frankness your analysis of it is not complete.

Q. Would you like to complete it, sir?

THE PRESIDENT.  Well, I will be glad to have the Secretary of State talk to the Internal Security Committee about what it is that has caused action to be taken, administrative action within the Department of State, to be taken against the gentleman that you have named, the kind of actions he carried out, what the law said, how he met the law, how he didn't meet the law.  This is all a matter which is going to be heard by the State Department board.  Then it will be heard by the Civil Service Commission for review.  Then it can be discussed in the courts.

In the meanwhile the Senate subcommittee can have all the information that it requires as to why Secretary Rusk has taken the action that he has.  I think that is the best procedure.  And I can assure you that I will examine the matter myself, when it comes time, as the Secretary of State will, who bears the responsibility, when it comes time to take any disciplinary action, if such a time does come.

[14.] Q. Mr. President, last spring there were selective price increases in steel, recently there have been price increases in steel.  Are you concerned about these increases, sir, and do you feel you are going to take any action about them?

THE PRESIDENT.  Well, we are watching very carefully the rises which have taken place in certain industries.  This country has avoided an inflationary spiral.  We see no reason why there should be one now.  The Wholesale Price Index has remained relatively constant for 5 years.  We are concerned that price increases in one or two basic areas may stimulate other price increases which will affect adversely our competitive position abroad, and therefore affect our balance of payments, therefore affect our national interest.

In addition, profits are at a record high now-they have never been higher in history.  The whole year of i963 looks very good and, therefore, we should be concerned also with reducing prices as well as increasing them.  For the time being we are watching the matter with concern and will continue in the days ahead to do so.

[15.] Q. Mr. President, has there been an official ruling that giving commercial credits to Russia would not violate the Johnson act?

THE PRESIDENT.  Yes, that is correct, because it is not a government-to-government transaction.

Q. It is not a government-to-government?

THE PRESIDENT.  It is not a government-to-government.  These are private traders that will be involved and the credit will be granted by banks.  In the case of Canada, as you know, the terms were 25 percent down, 25 percent then for every 6 months for a period of 18 months.  But because the interest rate was of a certain figure, I think 4 7/8 percent, the Soviets decided to pay cash and, therefore, paid something like 80 percent cash.  We will be dealing on the same matter with them on interest rates.  Our interest rates would be slightly higher than the Canadian rate, possibly, under the private commercial system, and it may be that they will decide, therefore, to pay a very large percentage in cash.

But I have gotten a ruling from the Department of Justice that this does not contravene existing laws, particularly the Johnson act.

Q. Will the grain dealers take the risk, then?

THE PRESIDENT.  The grain dealers will take the risk with the private banks.

[16.] Q. Mr. President, former head of the CIA Allen Dulles said in an interview in the journal American today that reports of disputes between the CIA and the State Department and various branches of the government in South Viet-Nam have arisen because "of a lack of a clearcut operational policy in Washington." And he goes on to say that he thinks what is needed is less backbiting between U.S. agency officials.  In view of the defense you just gave CIA, would you care to agree with the Dulles charge or contest it?

THE PRESIDENT.  I would agree with the last part of it, that the agencies-as we all know, they are faced with a very difficult problem in South Viet-Nam, which we are all familiar with, both on the military and political side.  Men have different views about what actions we should take, and they talk to members of the press, to all of you, in Saigon and here in Washington.  But I must say that as of today, and I think this is particularly true since General Taylor and Secretary McNamara came back, I know of no disagreement between the State Department at the top, CIA at the top, Defense at the top, the White House and Ambassador Lodge, on what our basic policies will be and what steps we will take to implement it.  Now if down below there is disagreement, I think in part it will be because they are not wholly informed of what actions we are taking.  Some of them are necessarily confidential.  But I think our policy, though we can't say what effect it is going to have, I think we are in agreement about what we ought to do.  I would think that Saigon, and personnel in the various agencies, should support that policy, because that is the policy we are going to carry oat for a while.

[17.] Q. Mr. President, if I understood you correctly on the wheat statement, you said the Russian people will know they are receiving American wheat.

THE PRESIDENT. That is correct.

Q. Is that by some agreement with the Soviet Union or how would that come about?

THE PRESIDENT. No, but we have our own means of informing the Soviet Union.  As you know, for many months the Voice of America has not been blocked, for example, and therefore we believe that we have adequate means to inform the Russian people of the arrangement.

In addition, I am not sure that there is any reason for the Russians themselves to keep it quiet as it is a commercial transaction.  But in any case, we have the means to provide that knowledge.

[18.] Q. Mr. President, as the election year approaches, there is an unusual amount of political activity already, as the questions reflect.  I wonder if you would give us your thinking, I as an experienced politician as to the prime assets of your administration next year, and the prime liabilities of your administration?

THE PRESIDENT.  I think that you would not want to– as we only have a relatively short time, I think we ought to make a judgment on that in 1964.  And I say that without any-a lot of these matters we will have to decide whether the United States is better off economically than it was before, and whether our position in the world has improved, and whether our prospects for peace are greater, and whether our defenses are stronger, and whether we are making progress at home and abroad.  That is a matter which it seems to me will be argued very strongly in '64.  For example, we can't make a judgment about the state of the economy in '64- I think if they pass our tax bill, we are going to be able to demonstrate a very successful, ebullient economy for a period of 4 years.  If they do not, we will have a different situation.

I cannot tell what our relations will be in Southeast Asia a year from now.  I know what results our policy is attempting to bring.   But I think that result ought to be judged in the summer of '64 and the fall of '64, and I have hopes that the judgment will be that the economy is moving ahead, that the rate of growth has been almost $100 billion, will have been from about $500 billion to $600 billion, that we are substantially stronger militarily, that the chances of war have been reduced over Berlin and perhaps in other areas.  But I would not want to make those judgments now, because I think we still have a long- way to go before next summer, and I think that to say that this is the end of the road would be a mistake.  I think we ought to be judged by what we do over a 4-year period, and that is the way it is going to be.  It is too early now.

[19.] Q. Could I ask one final thing, sir? Have you brought back any dominant impressions from your two recent trips in the West and South, political impressions?

THE PRESIDENT.  I would say we are going to have a hard, close fight in 1964.  But that has been my impression for a good many months.

Reporter: Thank you, Mr. President.

NOTE: President Kennedy's sixty-second news conference was held in the State Department Auditorium at 6 o'clock on Wednesday evening, October 9, 1963.