THE PRESIDENT. I have three or four announcements which I will make.
     [ 1.] We have extended an invitation to the Chancellor, German Chancellor Adenauer, to come to the United States, and he has accepted our invitation, and we are delighted that he is going to be here in Washington on April 12th and April 13th. I am looking forward very much to meeting him and to having an exchange of views.
     [ 2.] Secondly, I am writing to the Congress, to Congressman Vinson and to Senator Russell, a letter recommending that they consider legislation to restore former President Eisenhower to his military rank of General of the Army. President Eisenhower's outstanding military record and his long public service to our country in war and peace, I think, with that long experience it would be an appropriate act by the Congress if they should restore him to his former military rank.
     [ 3.] Third, it is with some satisfaction that I am able to announce that the week ending today is the first week since last July that there has been no net outflow of gold from this country to foreign countries. While we realize that this complete halt is only temporary, I believe it does signify the confidence in the dollar throughout the world is being restored.
     [ 4.] Fourth, our objective now is to help make effective at the retail level the influence of the Federal Reserve on the wholesale supply of money. We intend first to facilitate the flow of mortgage funds into the hands of prospective home buyers. I have requested Mr. Joseph McMurray, Chairman Designate of the Home Loan Bank Board, to meet with leaders in the savings and loan field, and to urge them to reduce mortgage rates so as to expand the flow of money into mortgages. His first such mission will be to California, where mortgage rates have been among the highest. We trust that his efforts here and around the country will mean real gains for home owners, the housing industry, and the economy.
     [ 5.] And lastly, I have today signed an Executive order providing for the establishment of a Peace Corps¹ on a temporary pilot basis. I am also sending to Congress a message proposing authorization of a permanent Peace Corps. This corps will be a pool of trained men and women sent overseas by the United States Government or through private institutions and organizations, to help foreign countries meet their urgent needs for skilled manpower. It is our hope to have between five hundred and a thousand people in the field by the end of this year. We will send Americans abroad who are qualified to do a job. We will send those abroad who are committed to the concept which motivates the Peace Corps. It will not be easy. None of the men and women will be paid a salary. They will live at the same level as the citizens of the country which they are sent to, doing the same work, eating the same food, speaking the same language. We are going to put particular emphasis on those men and women who have skills in teaching, agriculture, and in health.
     I am hopeful it will be a source of satisfaction to Americans and a contribution to world peace.
     [ 6.] Q. Mr. President, you said in your State of the Union Message that you had ordered a reappraisal of our entire defense strategy and that you would ask the Secretary of Defense to give you his conclusions by the end of February. Can you tell us what any of these conclusions are and would they involve any increased reliance on conventional as opposed to nuclear force?
     THE PRESIDENT. The Secretary of Defense has passed to me his conclusions, and at the end of, I would say, about 2 weeks I will have finished our study of it, my study of it, with him, and will then send our recommendations to the Congress.
     Secondly, in answer to your question, part of his recommendation is to strengthen conventional forces.
     [ 7.] Q. Mr. President, some economists have voiced the opinion that perhaps the recession has reached a rockbottom and that the economy is on an upturn. Would you give us your views about that, and also answer some suggestions in your political opposition that perhaps some of your anti-recession legislation may not be needed because of this expected upturn?
     THE PRESIDENT. Well, I hope that an upturn does take place, but I must say that I think the Department of Commerce today is going to release some statistics and figures which do not indicate that an upturn is taking place as yet.
     I would say there are still a great many hundreds of thousands of Americans who are dependent upon unemployment compensation. There are many - several millions of Americans who can't find work. Members of Congress and others with whom I have talked report from various sections of the country that they still face a most serious situation. I think it would be premature to make a judgment that our economy is on the rise and that therefore there's no necessity for action. I don't take that view at all. I think all of these programs are needed.
     And I am hopeful that it will be possible - I am hopeful that we will see the economy move up in the spring and summer, but we can make no predictions about it. And there's not sufficient evidence at hand yet by any Government department to indicate an upturn has taken place as of today.
     [ 8.] Q. Mr. President, under the present U.N. troop command in the Congo, the pro-Communist Gizenga Government seems to be gaining ground, expanding its influence there almost daily. Is this Government satisfied with the conduct of that command and, if not, have we made any representations to Secretary Hammarskjold about it?
     THE PRESIDENT. Well, the situation is very uncertain in the Congo and it is not possible to wholly accept the premise upon which your question was based.
     The United Nations resolution and, therefore, the new mandate given to the Secretary, is really only a week old. I am hopeful that the resolution will be carried out effectively. We are going to continue to concern ourselves, as members of the United Nations, with its successful implementation.
     [ 9.] Q. Mr. President, what is the role of Mr. Sargent Shriver in the Peace Corps, sir?
     THE PRESIDENT. He has been working in organizing the Peace Corps.
     Q. Will he continue in this - will he head it now that it is set up?
     THE PRESIDENT. Well, we are going to make a judgment about who will be the head and what its staff will be in several days. He has been working on a voluntary basis up to this time.
     Q. Mr. President, back in January the Civil Rights Commission recommended that Federal funds be withheld from public colleges and universities that discriminate on grounds of race, religion, or national origin. How do you feel about this?
     THE PRESIDENT. Well, it is not part of the - this matter, this recommendation, as you know, is not included in the legislation that we sent to the Congress. As to whether we should by Executive order withhold funds from certain schools, that is a matter which is under consideration. It will be for - as a part of our general overall study of where the Federal Government might usefully place its power and influence to expand civil rights.
     We hope in the next few days to have an Executive order forthcoming which will strengthen the employment opportunities, both in and out of the Government, for all Americans, and it will be followed as time goes on with other actions by the Federal Government to expand employment possibilities.
     One of the areas which is being considered, of course, is the field of education; another is the field of housing. There are a great many areas where action might be taken. The one that will be taken first will be in the field of employment.
     [ 11.] Q. It has been suggested, Mr. President, that when we give food to hungry people in other countries, we put it into an international pool so they will not know where it comes from. My question is, if our system can produce an overabundance of food, and the Communist system is not able to produce enough sometimes for their own people, why should we not advertise this to the world and label it, "A gift of the American people"?
     THE PRESIDENT. Well, I think we should. And Mr. McGovern informed me - one of the matters I discussed with him was this question, and he told me that in his trip through Brazil, that on all the food that he saw being distributed which had originated in the United States there was clearly marked on it, "A gift of the people of the United States," which I was glad to hear.
     [ 12.] Q. Mr. President, there is a great deal of interest abroad in your attitude and feeling toward the Algerian peace talks that are going on now. Would you comment, please, on what progress you feel might be made?
     THE PRESIDENT. Well, I would hope that they are fruitful.
     [ 13.] Q. New England would like to know, sir, if your administration is going to take the limits off of the imports of residual fuel oil.
     THE PRESIDENT. Well, as you know, the Secretary of the Interior recently provided for an increase in the importation of oil or residual fuel oil, which I hope will be helpful.
     Q. Do you think he will take the limits off completely? They say that is not sufficient to help New England.
     THE PRESIDENT. Well, we have to consider the needs of the coal industry and the domestic producers, the needs of New England, and we are trying to reach a balance which will protect the public interest.
     One matter which has concerned me, of course, has been the sharp increase, 12 percent, in the cost of fuel in the East and Northeast United States. That increase has seemed excessive and, as you know, several agencies of the Government are now investigating to find out what was the cause of that, what I would consider to be an excessive increase.
     But in answer to your question, we are attempting to reach a balance.
     [ 14.] Q. Mr. President, on the nomination of Charles Meriwether, is there anything in this man's background that might embarrass your administration?
     THE PRESIDENT. No, I have sent Mr. Meriwether's name up there after reading the FBI report and other records.
     [ 15.] Q. Mr. President, there is a report that Vice President Johnson is setting up a special office across the street from yours. Does this indicate, sir, that you plan to place before him broader, perhaps unprecedented, Executive responsibilities?
     THE PRESIDENT. Well, we have already indicated that he is going to have special responsibilities in the field of space. We are going to recommend to the Congress shortly that the space agency be reconstituted, with the Vice President instead of the President as chairman. In addition, he will have responsibilities in the field of employment opportunities. And also he is concerned - as a member for many years of the Armed Services Committee of the Senate as well as Chairman of the Subcommittee on Preparedness, he has been concerned with national security matters generally. And, therefore, it would seem to me appropriate that he would have some offices in the Executive Office Building so that he could meet these responsibilities most effectively.
     [ 16.] Q. Mr. President, what sort of a response have you gotten from ordinary citizens as a result of your appeal a couple of weeks ago for ordinary people to write in about examples of waste in the Government spending that they have noticed, and have you any other examples which you could tell us about besides the $2,000 officers' club - $20,000; excuse me.
     THE PRESIDENT. We have received some letters, and their recommendations are being investigated to find out if the facts are as they state them. But we have none to announce as yet. The investigations haven't been completed.
     [ 17.] Q. Mr. President, your roving Ambassador to Africa has been widely criticized for some of the statements he has made, that is, Mr. Williams, including the one of "Africa for Africans," and the like. Do you find any validity in this criticism, and would you consider that his tour of Africa has been a plus for the United States policy?
     THE PRESIDENT. Oh, I don't - I think Governor Williams has done very well. I am wholly satisfied with his mission. It's a very difficult one. Africa is not an easy matter to - the problems of Africa are not easy. And there are a good many conflicting forces that are loose in Africa as well as all parts of the world.
     The statement "Africa for the Africans" does not seem to me to be a very unreasonable statement. He made it clear that he was talking about all those who felt that they were Africans, whatever their color might be, whatever their race might be. I do not know who else Africa should be for.
     [ 18.] Q. Mr. President, Mr. Sheppard, who is Chairman of the House Appropriations Committee Subcommittee on Military Construction, stated that the Air Force missile base program, any way you look at it, is in a terrible mess, although he conceded there was some slight improvement in recent months. Do you care to comment, or will this forthcoming report that you mentioned before comment on that?
     THE PRESIDENT. Well, there are a great many difficulties. It is an extremely elaborate system to construct. A good many of the cost estimates were underestimated at the time. There are elaborate communications facilities that have to be developed, and it's not been proceeding altogether satisfactorily.
     I think the congressional investigation was most helpful. And I think the Department of Defense will benefit from it, and we will attempt to improve the program.
     [ 19.] Q. Mr. President, the Russians seem to have taken the position that Mr. McCloy's remarks the other day about the general and complete disarmament proposal of Mr. Khrushchev was a slogan, in McCloy's words. The Russians seem to take the position from this that your administration has now rejected this Soviet concept of disarmament. Is that a fact, or what is your attitude about that?
     THE PRESIDENT. Well, I think Mr. McCloy was pointing out that you have to, in addition to trying to work for disarmament, you also have to work for a mechanism which will permit an orderly settlement of disputes between nations, settlements which under present conditions might be settled by military action, but which in some future date, if the goal of disarmament was achieved, would have to be settled by another means.
     Now, I think it would be premature to make any judgments on what progress can be made in the field of disarmament. It is going to be some time before we have completed our study of what the American position will be on disarmament.
     We are proceeding immediately ahead, of course, on nuclear testing. But I did not read into Mr. McCloy's statement any broad position, any broad administration policy, because we have not reached that policy on disarmament.
     Q. Do you accept, sir, the view that disarmament is really not a legitimate word for what we are trying to do, that really it's arms control that the West, including the United States, is after or should be after?
     THE PRESIDENT. Well, we want to proceed with arms control, leading to disarmament. But, of course, this complete disarmament in 4 years is a goal which has been talked about for a great many years.
     I am somewhat familiar with the conversations which took place in Geneva under much less strained conditions from '28 to '29, through '33 and '34. It is extremely difficult to reach satisfactory agreements on disarmament. At that time the world was not divided as sharply as it is today, and yet rather limited progress was made. So this is an extremely difficult matter. I think the first area, of course, is in nuclear testing. That, I am hopeful, we can reach an agreement on.
     But we also are going to be concerning ourselves with our position on disarmament. And I hope by this summer we will have completed that analysis. What progress can be made will depend upon the good will on both sides and their willingness to accept realistic inspection systems.
     [ 20.] Q. Mr. President, recently documents were made public indicating that the ideological split between Red China and Russia is perhaps greater than many people have thought. Do you feel that this split might be to the benefit of the United States? And to what extent? For example, do you think that this might bring Russia and the United States closer together, over the long run?
     THE PRESIDENT. Well, I wouldn't attempt to make a judgment about what our future relations are going to be. I am hopeful that we can work out a relationship which will permit us to live in peace and maintain our security and the security of those countries with which we are allied. That is our object.
     I am hopeful that the Soviet Union will come to that conclusion also. What factors will be in their minds in making their policy, of course, can only be surmised. But we are attempting, and will be attempting in the coming months, to determine whether any effective agreements can be accomplished with the Soviet Union which will permit a relaxation of world tension. And we should know that in some months.
     [ 21.] Q. Mr. President, one of your campaign complaints was that fewer than a hundred people in the whole Federal Government were working in the field of disarmament and planning for negotiations. Can you tell us how many people you have working on that problem now and what progress you are making towards building up what you would regard as an adequate staff to deal with this question?
     THE PRESIDENT. We have, of course, the problem, and have had it, of going into the negotiations in late March. There have been voluntary groups, particularly one led by Dr. Fisk, which has been concerning itself with our position in those negotiations. I discussed with Mr. McCloy the setting up of a longer range operation on disarmament and nuclear testing, and we are now considering whether that should be established as a separate agency in the executive branch or in the State Department, with permanent personnel and a budget under a statutory action by the Congress. I am hopeful - Mr. McCloy is considering it, and we hope to be able to make a recommendation to Congress about the long-range buildup of our disarmament activities in some days.
     [ 22.] Q. Mr. President, what significance, if any, do you attach to the fact that the Russians put part of your news conference on their television, and would you welcome more of this?
     THE PRESIDENT. I would welcome more of it. And I am glad that they are doing it, and I hope that it can be expanded so that it gives an accurate reflection of the point of view of this country.
     [ 23.] Q. Mr. President, this last weekend, Vice Chancellor Erhard in Germany suggested that West Germany was not necessarily going to continue aid to underdeveloped areas beyond 1 year. Was it your understanding with the Foreign Minister, Herr von Brentano, when he left here, that this would be on a continuing basis?
     THE PRESIDENT. It is my understanding that it would be on a continuing basis, and I am sure that that would be the point of view of the German Government. As to how much they will be able to do on a continuing basis, that is a matter which they have to determine and I am sure will be a subject of discussion between the United States and the Germans and other interested countries. But my impression was very precise, that it would be on a continuing basis. But I do not say that the figures which have been reported in the papers as to how much would be provided on a continuing basis, I did not have any understanding that those were the figures that they would finally reach. The idea of continuity was clearly accepted, and the idea of the figures is a matter of course which would be before the Germans and on which of course we will be talking with them.
     [ 24.] Q. Mr. President, Congressman Anfuso has recommended that this country take the initiative and officially invite Soviet space scientists to meet with U.S. scientists to work out plans for cooperation and peaceful exploration of space in line with your own recommendations. Would you comment on this, and could you tell us what plans you may have now to achieve this end?
     THE PRESIDENT. We are attempting to improve our exchange program on a reciprocal basis with the Soviet Union - and have been engaged in that activity for some time.
     Q. Yes, but have you defined any special areas in which you could cooperate without any harm to our national security?
     THE PRESIDENT. When we have been able to work out any successful exchanges or new exchanges, we will announce them. But we are of course concerned that they will be reciprocal, and national security will be protected, and also that it would contribute to some useful purpose. We have, as you know, had recently here in Washington a meeting which had been arranged some months ago on meteorology, in which the Soviet representative was unable to be here, which was a source of regret. There are other proposals we have made for the long-range exploration of space, weather control, and so on, and we are going to continue to attempt to engage the Soviet Union in a common effort in that kind of activity.
     [ 25.] Q. Mr. President, you told an earlier press conference that for every new program you set up, you would suggest a source of revenue. Does that mean, for example, in the case of the education program that you are going to suggest some special way of financing that?
     THE PRESIDENT. No, what I said was that for the proposals that we would make, we would have a suggested source of revenue, and by the end of the month, when we send up our completed budgetary recommendations for '61-62, we will also suggest sources of revenue.
     Now, in the case of unemployment compensation, aid to dependent children, social security, highways, and medical care for the aged, we did suggest the appropriation.
     On the suggestion of the appropriation on agriculture and on education there is no direct tax link to those, but we will have some proposals to make before the end of the month to bring that section of the budget which we have effected in line with the revenues.
     I have excluded, of course, from the beginning, what we do in the field of national security.
     Q. A sort of an overall balancing out is what you have in mind in the case of education, and not a specific source, but some general program for changing the revenue?
     THE PRESIDENT. I think as I have stated, we are going to suggest revenues for any expenditures that we make which do not have by themselves or linked to them a source of revenue as the other programs did.
     Q. Have you made any estimate whether there will be a deficit in fiscal year 1962?
     THE PRESIDENT. We will send to the Congress, I believe on March 23, our view on what the '62 budget will look like. We have not completed our programs, and we have not completed our analysis of tax revenues at this time.
     Q. Mr. President, there is a report that there is a billion and a half deficit in sight. Is that correct?
     THE PRESIDENT. I would prefer to wait until we are able to complete our programs because the amount of the budget is tied pretty much to what we recommend. All these programs, with the exception of defense, will be finished by the 20th, and we will then be in a position to---.  Of course, the final budget deficit will depend quite a lot on what we do in the field of national security. And I have not finished making a judgment on how much we should recommend in addition to the present '62 budget.
     [ 26.] Q. Mr. President, the aide memoire which was handed to Dr. von Brentano emphasized the need for burden sharing on defense and foreign aid in the Atlantic Community. Can you speak somewhat more precisely of your ideas on this burden sharing?
     THE PRESIDENT. Yes. I hope that all the members of the Atlantic Community will contribute according to their resources for the maintenance of NATO and for the assistance to the newly emerging countries, and that the burden will be commonly assumed, and the OECD discussions, the discussions - the bilateral discussions with the Germans, discussions which are going to take place in March and in April in Europe - I am hopeful will lead to that result.
     [ 27.] Q. Sir, in view of the criticism that has occurred, could you elaborate on why you have not recommended Federal aid to public and - to private and parochial elementary and secondary schools?
     THE PRESIDENT. Well, the Constitution clearly prohibits aid to the school, to parochial schools. I don't think there is any doubt of that.
     The Everson case, which is probably the most celebrated case, provided only by a 5 to 4 decision was it possible for a local community to provide bus rides to non-public school children. But all through the majority and minority statements on that particular question there was a very clear prohibition against aid to the school direct. The Supreme Court made its decision in the Everson case by determining that the aid was to the child, not to the school. Aid to the school is - there isn't any room for debate on that subject. It is prohibited by the Constitution, and the Supreme Court has made that very clear. And therefore there would be no possibility of our recommending it.
     Q. But you are free to make the recommendations you have made which will affect private and parochial colleges and universities ?
     THE PRESIDENT. Well, the aid that we have recommended to colleges is in a different form. We are aiding the student in the same way the GI bill of rights aided the student. The scholarships are given to the students who have particular talents and they can go to the college they want. In that case it is aid to the student, not to the school or college, and, therefore, not to a particular religious group. That is the distinction between them, except in the case of aid to medical schools, and that has been done for a number of years. Because that is a particular kind of technical assistance the constitutional question has not arisen on that matter.
     [ 28.] Q. Mr. President, in regard to Mr. Meriwether, it has been alleged in the press and in Congress that he was campaign manager to former Admiral Crommelin. Now in fairness---
     THE PRESIDENT. In 1950.
     Q. Yes. In fairness to Mr. Meriwether, can you state whether this is true and whether it entered into your thinking?
     THE PRESIDENT. Yes, he was campaign manager; had association with the campaign in 1950. That's correct.
     [ 29.] Q. Regarding your opening remark about the recommendation by the Defense Secretary to increase our conventional arms strength, would you please give us some of your thinking as to the rationale for this shift, if it is a shift, in our defense spending?
     THE PRESIDENT. I would not say it is a shift. I would say it's - there are proposals made by the Secretary which talk about a general strengthening of our Armed Forces, including many areas. So I am not sure that the word "shift" is the most descriptive.
     [ 30.] Q. Mr. President, could you say whether any strengthening of our conventional forces will imply or mean a lessening of emphasis on nuclear weapons, or in our capacity to use them in a pinch?
     THE PRESIDENT. I have not heard that. We have reached no decision which would indicate that there has been a change in our reliance. When - if we do reach a change in our reliance in new weapons, we will make it very clear. But no such change has been reached at the present time. What we are anxious to do, of course, is to see conventional forces strengthened not only in Western Europe but throughout the world. And that, it seems to me, was the gist of the Secretary's memorandum and his testimony yesterday and his public statements.
     Reporter: Thank you, Mr. President.

1.  Executive Order 10924, 24 F.R. 1789.