THE PRESIDENT. Good morning. I have several brief announcements.
     [ 1.] One, I would like to announce that I have invited the Prime Minister of Canada, the Right Honorable John G. Diefenbaker, to make a brief visit to Washington, on Monday, February 20, for discussion of matters of mutual interest to our two countries. I particularly am glad he is coming. We will hold a luncheon in his honor at the White House. I think it is most important that harmonious relations exist between two old friends, and therefore I am glad to have this chance to visit with the Prime Minister.
     [ 2.] Secondly, I do want to say a word or two about NATO. This is our central and most important defensive alliance, but in the larger sense it is much more. The members of NATO must be leaders also in and out of NATO itself, in such great causes as the integration of Europe and the cooperative development of new nations. We for our part mean to go on as full and energetic partners in NATO, and in particular we wish to maintain our military strength in Europe. Secretary Rusk is making an especially careful study of our policy in this great organization and I am delighted to say that he will have the help not only of Ambassador Finletter, but of an advisory group under the direction of one of the true founders of NATO, a distinguished former Secretary of State, Mr. Dean Acheson.
     [ 3.] Three, with the approval of Secretary Ribicoff, I am directing the Surgeon General to organize and establish within the Public Health Service a Child Health Center, to deal with the special health problems of children. This is a matter of particular interest to me. Some 400,000 babies are born each year with congenital malformations. I don't think as a country, nationally, and as a matter of fact I don't think probably privately we have done enough on research into the causes of mental retardation. And while a good deal of effort is being expended in this country for the care of these children, I do think it is most important that we devote special effort in the coming months and years to research in the causes of it. I am therefore delighted that we are going to proceed ahead with Governor Ribicoff's strong support.
     Thank you.
     [ 4.] Q. Mr. President, in the past 24 hours there has arisen a somewhat hard to understand situation concerning the missile gap. An official of your administration, who was identified in some newspapers this morning as Secretary McNamara, has been quoted as saying that the missile gap which was expected and talked about so much did not exist, nor did he see prospects of it. Your press secretary, yesterday afternoon, denied this story. Now, I wonder if you can set the record clear, if you can tell us your version of what Secretary McNamara said, and what your feelings are about the missile gap. Does it exist, and how and where does it exist?
     THE PRESIDENT. My only conversation with Mr. McNamara was not at any off-the-record meeting, if such a meeting took place, but was in a conversation which I had with him yesterday afternoon after the reports appeared.
     Mr. McNamara stated that no study had been concluded in the Defense Department which would lead to any conclusion at this time as to whether there is a missile gap or not. In addition, I talked this morning to Mr. Hitch, who is the Comptroller of the Defense Department, who has been given the responsibility by the Secretary of Defense to conduct a review of our strategic weapons in the same way that Mr. Nitze is conducting a review of our tactical weapons. Mr. Hitch informed me that no study has been completed on this matter. He hoped to have a preliminary study completed by February 20th, but he did tell me quite specifically that as of today he is not prepared to make a judgment as to our capacity in strategic weapons.
     There are many complicated problems involved. We have the realization that the United States will not strike first, and, therefore, we have to consider what will be available to the United States if an attack took place upon us, not only in missiles, but also in the other arms of our arsenal, SAC, the Navy, Polaris, and all the rest.
     So I think in answer to your question, the study has not been completed. It has not come, therefore, across my desk. There will be a study of how the budget for fiscal 1961 and 1962 should be changed in view of our strategic position, but that study will not be completed by either Mr. Nitze or Mr. Hitch, or come across Mr. McNamara's desk to be passed to me, for some days.
     Q. Well, sir, during the campaign you seemed to feel very strongly that a serious missile gap did exist then. Do you now feel as strongly?
     THE PRESIDENT. Well, what I hope to do is to wait until the Defense Department who I have given this responsibility to, Mr. McNamara, and he has passed the responsibility to members of his department - I hope that we will have a clearer answer to that question. Of course, it is my hope that the United States is fully secure. I will be pleased if that is the result. If it isn't, I think it is important that we know about it, and I will say that we will then - I will then take on the responsibility of passing on to the Congress this collective judgment as to our position and what needs to be done.
     So that without getting into the discussion of these stories this morning, I do want to say that it is my information that these studies are not complete, and therefore it would be premature to reach a judgment as to whether there is a gap or not a gap.
     [ 5.] Q. Mr. President, could you tell us what you think about the wisdom - the idea of - these background news briefings where governmental officials do not identify themselves as distinguished from this type of wide-open news conference?
     THE PRESIDENT. Well, they are hazardous in many cases - [laughter] - and I think our Mr. McNamara might agree with that now. On the other hand, I will say that they are important, too. I'd hope it would be possible to work out some satisfactory system where reporters who are charged with covering matters which are particularly complicated, where they would have a chance to discuss with the responsible official on a background basis so that their stories would be more accurate. I believe there have been such conversations in this administration already and they have been, I think, useful. This one, evidently a controversy has arisen from it, but I hope that it will be possible for the responsible officials and the reporters who are particularly concerned with that area, to work out ground rules so that they could be continued.
     [ 6.] Q. Mr. President, in keeping with your statement about NATO, could you tell us how you would look upon a heads of government meeting of the NATO Council in the near future?
     THE PRESIDENT. Well, I would not be able to give you a response to that. There is a planned meeting I believe at Oslo, of the foreign ministers, in May. I have seen newspaper reports that it might be turned into a heads of state meeting. But I must say that there has been no judgment reached; I think it is fair to say that the matter is not as yet under consideration.
     [ 7.] Q. Mr. President, you said during one of your recent messages that this Nation was rapidly approaching its hour of maximum danger or peril - I forget the exact words. Some people have suggested that perhaps you were painting the picture blacker than it is for shock purposes. Could you perhaps spell out for us this morning what you have in mind, and whether you really sincerely feel that we are approaching this peril as you said?
     THE PRESIDENT. I sincerely believe what I said in my State of the Union Address about our position in the world. I hold this office for the next 4 years, and I believe that the next 4 years will be years in which this country and its capacity to maintain its position and security will be strongly tested. I think that anyone who looks at the globe and looks at the increasing power of the Communist bloc, the belligerency which marks the bloc, particularly the Chinese Communists, I would say would come to the conclusion that we are going to be severely tested in the next 4 years.
     [ 8.] Q. Mr. President, 3 months ago a Federal court in New Orleans ordered two public schools there desegregated. Since then, what is apparently an organized campaign of intimidation has kept most white children out of those schools and effectively frustrated the court order.
     During the campaign you spoke of using your moral authority as President in the civil rights field. Can you tell us what you plan to say or do to help the New Orleans families who evidently want to obey the Constitution but are afraid to do so?
     THE PRESIDENT. I will - at such time as I think it is most useful and most effective, I will attempt to use the moral authority or position of influence of the Presidency in New Orleans and in other places. I want to make sure that whatever I do or say does have some beneficial effect and, therefore, it is a matter which we are considering.
     Q. But you do not have anything to say specifically about New Orleans today or about what has happened there - for example, last week the man who had tried to send his children to school and then in fear left town?
     THE PRESIDENT. We are going to - I will comment. As far as New Orleans goes, it is my position that all students should be given the opportunity to attend public schools regardless of their race, and that is in accordance with the Constitution. It is in accordance, in my opinion, with the judgment of the people of the United States. So there is no question about that.
     Now specifically, what we could most use fully do in order to provide an implementation of the court decision in New Orleans that is a matter which we are carefully considering. On the general question, there is no doubt in my view: students should be permitted to attend schools in accordance with court decisions. The broader question of course is, regardless of the court decisions I believe strongly that every American should have an opportunity to have maximum development of his talents, under the most beneficial circumstances, and that is what the Constitution provides. That is what I strongly believe.
     On the question specifically of what we can usefully do in New Orleans in order to provide a more harmonious acquiescence with the court decision, I would feel that we could perhaps most usefully wait until we have concluded our analysis of it.
     [ 9.] Q. Mr. President, the Congress has spent a good deal of time investigating regulatory agencies and Executive interference in them. Now, your assistant, Mr. Landis, has suggested that a White House office be set up to oversee these agencies. Do you feel this might lead to the same kind of Executive interference that the Congress has been investigating?
     THE PRESIDENT. Mr. Landis recommended such a White House office in his study. I have asked Mr. Landis to come to the White House, not to fill such an office, of course, which is not established, but merely to work with the White House and with the interested members of Congress who are concerned about improving our regulatory procedures.
     He is going to stay some months and do that. I conferred yesterday with Congressman Harris, who has a special responsibility as Chairman of the House Committee on Interstate and Foreign Commerce, and we are going to continue to work together to try to speed up the procedures of the regulatory agencies and improve their actions.
     Whether we should have such a White House liaison or center is a matter which we are going to consider. The Congress bears special responsibility for these agencies, and, therefore, I think it is probably not likely that major responsibility in this area would be released to the White House, and I am not completely sure it is wise.
     [ 10.] Q. Sir, this question is a bit on the personal side. You have available to you at the Catoctin Mountains in Maryland a very fine weekend retreat that has been used by former Presidents. Sir, do you plan to use it and if so, do you plan to rename it back to Shangri-La? And also I believe you have two Government yachts at your disposal. Do you plan to use them, too, sir?
     THE PRESIDENT. I am not going to use the yachts at the present time. [Laughter] I don't plan to use Camp David very often. Now, I will keep - I think the name should be kept Camp David. But I doubt if I will go there very often. On the question of the yachts, we will have to wait and see what the situation is. I believe we have the Barbara Anne, and I am not familiar with the other yacht.
     [11.] Q. Mr. President, there is a report from Australia this morning, quoting an American scientist as saying that we will have a man in space within 6 weeks. I wonder if you have ordered an acceleration of our space program, or if you consider it for psychological or other reasons that we are in a race with the Russians to get a man into space?
     THE PRESIDENT. No, in the first place, I don't know anything about that report. We are very concerned that we do not put a man in space in order to gain some additional prestige and have a man take disproportionate risk, so we are going to be extremely careful in our work and even if we should come in second in putting a man in space, I will still be satisfied if when we finally do put a man in space his chances of survival are as high as I think that they must be.
     [ 12.] Q. Mr. President, it has been rather reliably reported that you and some of your staff members and Cabinet members were quite active on the Hill by phone and otherwise in the recent rules fight. Could you give us your views as to what your activity and that of your Cabinet members and staff members will be in the coming legislative year, as far as getting your program going?
     THE PRESIDENT. We have a liaison officer, Mr. O'Brien, and he has Mr. Wilson who is liaison for the House and Mr. Manatos who is liaison for the Senate, and we will attempt to keep close contact between the White House and the House and the Senate in order to give our program the best possible chance that it has to pass. So we will keep very close contact with the Hill, and I hope that they will be harmonious.
     [ 13.] Q. You said in the past that the release of the two fliers recently helped in our relations with the Soviet Union. Would you care to outline for us, sir, any developments you might hope to take place prior to any possible future summit meeting with Mr. Khrushchev?
     THE PRESIDENT. Well, I said that it removed a serious obstacle to harmonious relations with the Soviet Union, the release of the fliers. Mr. Thompson arrives back this week, and I am going to meet with Mr. Thompson on several occasions this week - on Saturday morning with Mr. Thompson, Mr. Bohlen, and Mr. Kennan - to help chart our future relations with the Soviet Union. There are some things that I think could usefully be done, and must be done if our relations are going to continue to be fruitful. We are concerned, as I am sure they are, with the situation in Laos. We are concerned with the situation in the Congo, as I am sure they are, and I am hopeful that we can make our position clear to them, and accomplish some useful result.
     [ 14.] Q. Mr. President, the Mexican Americans are very concerned because you have not named one of them to a high place in your administration. They say that they are the only ethnic group that worked for you nationally, in the "Viva Kennedy" clubs and GI forums, that has not been recognized. I wonder if you plan to give them some recognition?
     THE PRESIDENT. Well, we have, I think, Dr. Garcia, from the State of Texas, who I believe has gone with Ambassador Whitney to Jamaica this weekend. We did offer a position of responsibility to an American of Mexican extraction who was unable to accept it, but it was a position of high responsibility.
     I quite agree with you that we ought to use what I consider to be a great reservoir of talent, and I think this is particularly true in our relations with Latin America. So I will just say to you that it is a matter of interest and that we will continue to see if we can provide for - if we can associate them with our administration more closely.
     [ 15.] Q. Mr. President, last weekend the Russians launched a 7-ton satellite in orbit which they said was a test of a new rocket. This has led to worldwide speculation that there might have been a man aboard. What do we know about this Russian rocket and about the recent rumored Russian attempts to launch a man into space?
     THE PRESIDENT. Well, I have no information about - that there was a man involved. We have no evidence that there was a man in the rocket. We have, of course, some information, a good deal of which has appeared in the press, about the rocket. And it is a large one and it may be part of their experiments leading up to placing a man in space. But at least as of now we have no evidence that there is a man in there. But I am sure that they will continue these experiments leading up to placing one there.
    [ 16.] Q. Mr. President, in your message to Congress on the gold problem, there was one passage in there in which you referred to interest rates on foreign funds which had a sentence that might lead to the presumption that perhaps you had in mind submitting legislation which would give you a little more authority over domestic interest rates in other fields. Is this a reasonable conclusion? Do you have any intention to expand the authority of the Presidency with respect to domestic interest rates?
     THE PRESIDENT. No. As you - we have had consultations with the Federal Reserve Board about what action should be taken to provide that the interest rate on short-term securities would not come down while the interest rate - which does affect the gold flow - while the interest rate on long-term securities remains high, which does adversely affect the economy.
     But what, of course, we are interested in is to see the short-term rates remain high enough to protect our gold, while the long-term rates be reduced somewhat in order to stimulate the economy. But this is a matter under the control, of course, directly, of the Federal Reserve Board, with the Treasury having, of course, a direct interest in it.
     But it is not intended, to answer your question, that we would propose any legislation or any Executive orders which would increase our control directly over long-term rates.
    [ 17.] Q. Mr. President, in regard to NATO, have you looked into the problem or the recommendation of the previous administration that NATO be given its own nuclear weapons, or will this be left up to the Acheson group, and when will that group be expected to report?
     THE PRESIDENT. Well, that was one of the matters, of course, which General Norstad briefly discussed. It is a matter now which is being reviewed by Ambassador Finletter with the aid of Mr. Acheson. That is one of the, I would say, central matters of interest to us now, and both of these men will be working on it.
     Q. When will that group report to you, approximately?
     THE PRESIDENT. I haven't got a time on it, but I think we ought to move with some speed in it.
    [ 18.] Q. Mr. President, the States now can set their own safety and regulatory standards for atomic industrial development within their own borders. Critics of this do-it-yourself provision believe that it increases the danger of nuclear accidents and favor complete Federal control within these areas. Would you give us your views on it?
     THE PRESIDENT. Well, I will have to look into it. I am not informed about it.
     [ 19.] Q. Sir, in all the discussions about the gold problem, there keeps coming back West Germany doing more of its share in aiding underdeveloped areas and taking on more commitments in the common defense. Is your administration making representations either through the Treasury Department or through our Ambassador to get the Germans to do more in these fields?
     THE PRESIDENT. Yes.
     Q. Could you elaborate on it, sir?
     THE PRESIDENT. Well, I think that the proposals that have been made, of course, in our opinion do not meet the problem or the opportunity, and I am hopeful that we can work out a more satisfactory arrangement with the West Germans.
     Mr. von Brentano is going to be in the United States, the Foreign Minister, in the month of February. I do hope to see him. In addition, we are considering other methods which could put these negotiations on perhaps a more - a higher level.
     Q. Just to follow that up, sir, could you spell out what you mean by "higher level"? Are you finding that you are running into problems with them because of their upcoming election?
     THE PRESIDENT. Well, they have a good many responsibilities and problems of their own. In addition to whatever they do in relation to us they have other responsibilities to the French and the British. So in fairness, I must say the matter is not wholly easy for the Germans. However, it is a matter of great importance and I therefore think it might be useful to provide that these discussions should take place on a higher level than they have in the past.
     [ 20.] Q. Mr. President, you spoke during the campaign about the need of getting things moving again. I wonder if you could tell us how well you think you have succeeded so far in creating a new mood in Washington?
     THE PRESIDENT. As far as the domestic economy or as far as generally?
     Q. Putting some urgency into it.
     THE PRESIDENT. Well, I think we have talented people in our Washington group who are giving it a great deal of time and attention. And therefore I am hopeful - though we have been in office only 2½ weeks - I am hopeful that before the snow is off the ground that we will have been able to stimulate action in a variety of areas.
     [ 21.] Q. Mr. President, in your State of the Union Address, you remarked that morality in private business has not been sufficiently spurred by morality in public business. In the light of the economy-sized malpractice revealed by - carried on by some of the American leading corporations, would you care to comment on this situation and the impact of such private business morality or immorality on the community itself?
     THE PRESIDENT. Well, having participated in the investigation of improper practices in the labor-management field for 2 or 3 years, and having had a good deal of public attention given to it, I am hopeful that the Department of Justice, the Antitrust Division which was very effectively led in recent months, and other agencies of the Government will concern - and the Congress - will concern itself about the problem of conflicts of interest and monopolistic practices, as well as even more illicit practices conducted in the American business community. And I hope that the business community itself will consider what steps it could take in order to lift this shadow from its shoulders.
     Q. Do you feel, sir, that perhaps business might well establish codes of ethical practice such as the trade unions have established?
     THE PRESIDENT. Yes. I am hopeful that the unions will live up to these ethical practices which state a very high standard for them; and I think it would be very beneficial if business groups today would consider what they could do to protect themselves from charges of conflicts of interest of the kind that we have recently seen, and also of the effort made by these large electrical companies to defraud the Government. And I must say I would be interested to watch what progress they can make in that area.
     [ 22.] Q. Mr. President, Admiral Burke's speech was originally checked out and cleared of certain things which I believe Mr. Salinger said might have been sources of unnecessary friction with the Soviet Union. Some Republicans in Congress charged that this was appeasement. Could you sketch in for us the rather difficult ground between appeasement and "unnecessary friction"?
     THE PRESIDENT. No. All I would say is that I would hope that those who make speeches in the area of national security, Chiefs of Staff and others, and all others, would attempt to have those speeches coordinated with the Department of State and with the White House, so that we can make sure that those speeches represent national policy. I must say it seems to me that Theodore Roosevelt set a very good standard for us all, and one which I hope this administration will follow by speaking softly and maintaining---
    [ 23.] Q. Mr. President, on Monday Mr. Rusk said that the United States was prepared to take cooperative action with the other American Republics to end tyranny, he said, against either the left or the right. Is it contemplated that we shall ask the other American States to join with us in some steps on the Cuban problem?
     THE PRESIDENT. The Cuban problem and the problem of tyranny throughout all of Latin America is a matter which is of course of special concern to Mr. Berle and his group - interdepartmental group - and they have not concluded their analysis as yet.
    [ 24.] Q. Mr. President, Castro is reported to have built a new radio station, one of the largest in the hemisphere, which will begin operations within a few months to broadcast pro-Castro propaganda throughout Latin America. Is there anything we can do or plan to do to counter this?
     THE PRESIDENT. We are giving the matter of Cuba and its export of its revolution throughout Latin America a matter of high priority. I could not state what actions will be taken yet until Mr. Berle, Mr. Mann, and Mr. Rusk have concluded their deliberations, which are now going ahead very intensively.
     [ 25.] Q. Mr. President, one of your task forces recommended that you be given discretionary power within limits to cut tax rates as a counter-cyclical device. Can you tell us what you think of this idea?
     THE PRESIDENT. Well, in 1958 there were two proposals to cut taxes. One was made in March and I believe the other was made in June. I voted against it in March and voted for it in June, because it seemed to be, according to the economists I talked to, to be helpful. As you remember, I don't think it got more than 23 or 24 votes. The recession was serious and we ended up with a $12 billion deficit. Now we are going to take another look at the economy in April and make a judgment at that time whether we can expect an upturn in the spring or in the summer.
     I will say that I am not convinced at the present time that Congress would entertain that proposal, and I would not make it at the present time because I do think we should have more experience and more perspective on the state of the economy before making a proposal which is quite far-reaching, and which would cost the Federal budget perhaps $4 or $5 billion, which is a serious matter and which would limit, perhaps, our ability to go ahead with other programs which in the long run may be more useful. If you have a tax cut, it may last 6 months, if the Congress should grant it, and you lose $5 billion, which is put back into the economy and expended. With $5 billion or $3 billion devoted to education or health or international security, you can produce a longer range result. So that this is a matter which must be considered from various perspectives. In any case, in April we will try to make another judgment on the state of the economy. What I am concerned about is that the economy will move along, using less than capacity, and it is extremely difficult to take steps which will provide quickly for it to operate at full capacity.
     What we are concerned about is that with the tremendous increase in automation that it's possible for business profits to remain substantial and yet for employment to lag. The fact that the steel companies were able to maintain rather substantial profits at a time when they are operating at less than 50 percent of capacity does indicate the kind of problem we face with a good many more than 100,000 steel workers out of work.
     In answer to your question specifically, we will come back to what further steps could be taken in April, but I do hope that the Congress will act on the proposals we have now made, which involve most especially the unemployment compensation payments and also the distressed area payments, as well as some improvements in social security. If we could move ahead on those we could get a better idea of perhaps what action should be taken in April.
     [ 26.] Q. Mr. President, the fighting in Laos is continuing. The Soviet airlift is now 2 months old. The Soviet answer to the proposal to revive the International Control Commission has been delayed for some weeks. I wonder if you can tell us how long this Government is prepared to wait before it proposes some new action to resolve this continuing crisis.
     THE PRESIDENT. There will be a meeting at the White House this afternoon on the subject of Laos and what new action we should now take. And I am hopeful that some proposal will be forthcoming from that meeting.
     [ 27.] Q. Mr. President, many States are now re-forming their congressional districts as a result of the 1960 census and inevitably this leads to charges of gerrymandering directed at both parties. Can you tell us where you stand on Chairman Celler's bill to control gerrymandering to a certain extent by such devices as making districts be contiguous and control a certain population within a State?
     THE PRESIDENT. Well, even if you could pass those proposals you could still have a good deal of gerrymandering. I represented a district which was about 5 to 1 Democratic, which was contiguous, which was geographically associated with an adjoining district, which was marginally Republican. Now it is very difficult for the Congress or for the Federal Government to enforce standards. What should have happened, of course, is probably under some standards is those two districts cut in a different way which would have provided instead of one Republican Congressman with a very marginal majority, while the Democratic Congressman got 5 to 1, it probably would have ended up with two Democratic Congressmen, which may or may not have been in the public interest. [Laughter.]
     But I do think it is very difficult for us to try to draw these lines. There isn't any doubt that they are unsatisfactorily drawn, not only for the Congress, which is not the worst offender, but the State legislatures, where we have very - and have had for many years - notorious examples of gerrymandering, but which is a responsibility for the States, not the Federal Government.
     In any case, I am not familiar wholly with Congressman Celler's proposal and exactly what his standards will be, but I will look at it.
     Q. Mr. President, in that same connection, could you tell us where you stand or do you have a position on increasing the size of the House of Representatives?
     THE PRESIDENT. Well, it is 435 Members now, which is a large body. Congressman Chelf and I believe other Congressmen have proposed increasing it, I think to 450. I will discuss that matter with Speaker Rayburn and get his views as well as the leadership of the House on both sides.
     Reporter: Thank you, Mr. President.