THE PRESIDENT. Good afternoon.
     [ 1.] I have one announcement, a statement. Because mail received at the White House and by Members of the Senate indicates that a great number of people have been badly misinformed concerning one feature of the pending tax bill, I want to take this opportunity to set the record straight on our proposal to collect taxes which are due on dividends and interest.
     The paid advertisements and circulars financed by the savings and loan associations, who have made great profits in recent years and paid very little in taxes - I think something like $5½ billion, while paying $70 million in taxes - by banks and others, have led many people to believe (1) that this is a new tax or a tax increase; (2) that it will take money unjustly from honest taxpayers; (3) that it will create a mountain of red tape costing more than it will bring in; and (4) that it will harm the elderly, the widows and orphans, or others in low income.
     Not a single one of these charges is true. This bill simply proposes to collect taxes on dividends and interest income in the same fashion that it has been collected on our wages and salaries for the past 19 years. This is not a new tax. It has been on the books for years.
     Those recipients of dividends and interest who already pay their taxes will not be affected in any way. Those whose income is too low to be subject to tax will not be affected, for they can exempt themselves from withholding by a simple statement. The only ones affected will be those individuals who are not now paying the taxes they owe on this income, either through neglect or for some other reason.
     That is tax evasion, tax evasion of $800 million a year which must be made up by other taxpayers who pay their taxes. And it should be remembered that about 80 percent of dividend income goes to fewer than 7 percent of the taxpayers whose income exceeds $10,000 a year. In short, defeat of this provision will not help older people with small incomes who would be either exempt from it or could file each quarter for a prompt income by filling out a simple slip at the Post Office or bank, as is done every year by those who are involved in withholding. It will help - the defeat of this bill - only those whose evasion of present taxes is costing every honest taxpayer dearly.
     More enforcement, more education, more electronic brains cannot do the job, but withholding, as we have seen for the past 20 years, will treat all taxpayers fairly. And this country has prided itself on being willing to bear its heavy burdens honestly, and here is $800 million in taxes which have been on the books for years which is not now being paid and which must be made up by every other taxpayer, particularly those who find themselves, their wages, withheld on wages and salary.
     So I am hopeful that those who oppose this bill, particularly savings and loan banks, who have benefited so greatly, who have not been paying their taxes of almost any kind, and who wish to defeat the bill because it does place a just burden on them, and who wish to defeat it by misinforming so many millions of people - I hope they'll start to send out the correct record.
     [ 2.] Q. Mr. President, the newspapers in Detroit and Minneapolis have been closed by a series of strikes for about a month now. The unions, or some of the unions involved, have been taking turns in calling these strikes one at a time in shutting down the newspapers or keeping them shut. I wonder whether you would comment on these strike tactics and whether this blackout on news in these two major cities affects the general welfare and the public interest of the country to a point of being a matter of national concern in your frame of reference?
     THE PRESIDENT. Well, as to the last part, there's nothing in a strike of this kind that involves national emergency legislation, but of course, any newspaper strike is unfortunate because it affects not only the people involved on the paper, but it affects the whole community, the distribution of news, and business. It's my understanding that on these strikes Federal mediators have been involved in attempting to be of assistance. And this matter was brought up to me this morning and I discussed it with the Secretary of Labor, Mr. Goldberg, who said he would be glad to be of any use that he could, if the parties felt that he could be helpful. I'm hopeful that a speedy solution can be reached.
     It seems to me, as I've said on several occasions recently, these responsibilities must be borne by the parties. These aren't matters which can be settled by Government edict, or that should be. But I am hopeful that these and other matters can be settled, and Secretary Goldberg would be glad to be helpful, and the Federal Mediation is already on the scene and has been for some time.
     [ 3.] Q. Mr. President, perhaps in this connection you would comment for us on the press in general, as you see it from the Presidency. Perhaps, its treatment of your administration, treatment of the issues of the day?
     THE PRESIDENT. Well, I am reading more and enjoying it less - [laughter] - and so on, but I have not complained nor do I plan to make any general complaints. I read and talk to myself about it, but I don't plan to issue any general statement on the press. I think that they are doing their task, as a critical branch, the fourth estate. And I am attempting to do mine. And we are going to live together for a period, and then go our separate ways. [Laughter]
     [ 4.] Q. Mr. President, have you any comment on yesterday's election results, insofar as they affect your administration - the primaries?
     THE PRESIDENT. I am pleased at the result of the last few days, in Florida and Texas.
     Q. You have in the past endorsed some candidates in primaries, where there was opposition.
     THE PRESIDENT. I endorsed Congressman Fascell and Senator Smathers, at the dinner in Miami.¹ I think those are the only fights which I took an active part in, in the primaries.
     Q. I was thinking of Hale Boggs, too, but that's not important.
     THE PRESIDENT. Well, it is to Congressman Boggs! [Laughter]
     Q. I meant it was not important to quibble about.
     THE PRESIDENT. Yes, that's right, I understand.
     Q. But, does the administration have a favorite in Texas between Connally and Yarborough?
     THE PRESIDENT. I don't know whether "endorse" is the proper word. I spoke as highly of Congressman Boggs as I could, because my opinion of him is that high. But in the case of Texas, I was pleased that both candidates who had been attacked for their connection with the administration did very well. But they're electing a Governor in Texas. This is a decision for the people of Texas, and I am sure they would resent any outside interference and an attempt to talk from Washington about who should be Governor of Texas. They are very qualified to make a judgment, and I'm sure that they will make one which suits them.
     [ 5.] Q. Mr. President, my problem concerns the negotiations with the Soviet Union over Berlin. Chancellor Adenauer, as you know, has been critical in recent days over both the proposal for a 13-nation access control organization, and also toward the idea of the exploratory talks in themselves. Do you contemplate any change in signals in view of the Chancellor's objections?
     THE PRESIDENT. No, I don't think, at least from what I can gather - it's not easy. I don't think that that would be a correct interpretation of the German Government's position as of this time, as my understanding is that they are interested and support our exploratory talks on the access authority. What has concerned them is the makeup of the access authority, and this has been - since this matter was brought out into the public some weeks ago, before the Athens meeting, this has been the subject of a discussion between the two governments. So I place that in one category. The access authority, itself, which has been before us, really as a suggestion for many months, is not in controversy. It is the organization of the access authority, the relative power and position of the various members of it which has been the subject of some exchanges, which is quite natural.
     It's not easy. The United States is attempting to carry on negotiations for several powers and all of them have different ideas how it ought to be done. And we have to attempt to coordinate it, and at the same time present a position which has some hope of working out in a peaceful way. So I put that as one area.
     Now, on the talks themselves we have never had any statement from the German Government, or Chancellor Adenauer, that these talks should not continue. These talks are going to continue. As I understand the Chancellor's statement - and I think it is worth reading his entire speech in order to understand exactly what he means, and not fragments - he's not very optimistic about these talks. In fact, he quoted Secretary Rusk as saying that he did not believe that these talks - given the positions of the two parties - that these talks would produce a fruitful result. And maybe they won't. We have never said that they would, and we have never expressed high optimism about them. One of the members of the Foreign Office today said that they support the talks, but that the Chancellor was concerned that there was undue optimism. We have never been unduly optimistic. But we believe that there should be a continuation of these talks.
     Everything that was said at Athens, everything that's been said before, everything I have heard in the last 2 days - the German Government supports the position that we should continue the exploratory talks. And I believe we should. No country has done more than the United States in the last 12 months to strengthen our military forces in order to protect our commitments. But we hope, in calling up 160,000 men, adding billions of dollars to our defense budget, which was not done by many other countries who speak with vigor now - I would feel that the purpose of it, we hope, is not to fight a nuclear war but to establish an environment which permits us to have a useful exchange. As Winston Churchill said, "It is better to jaw, jaw than to war, war," and we shall continue to jaw, jaw, and see if we can produce a useful result. We may fail, but in my opinion the effort is worth it when we're dealing with such dangerous matters, and when we've seen the history of this century, when statesmen, and leaders, and others have brought about failure and brought about war as a result. So we're going to see what we can do.
     [ 6.] Q. Mr. President, last February at a news conference you told us that the ceasefire was becoming frayed in Laos and in the event that it was broken, it could lead to a very serious decision. I wonder, Mr. President, now that the cease-fire has been broken, and if efforts should fail to reestablish it, would it cause a reexamination on the part of the United States towards its policy there?
     THE PRESIDENT. Well, we are concerned about the break in the cease-fire. And, as you know, the State Department, the Acting Secretary of State - the Assistant Secretary of State today met with Ambassador Dobrynin - this afternoon. We've already indicated to one of the cochairmen of the British Government our great concern about it. Our Ambassador in Moscow met with the Foreign Secretary of the Soviet Union, Mr. Gromyko. We do believe, and have said from the beginning, that the negotiations should move much more quickly than they have. The longer this rather frayed cease-fire continues, the more chance we will have of the kind of incidents we've had in the past few days. That's why we were hopeful, after the meetings at Geneva last summer and fall, that the negotiations between the parties involved would take place last fall, and we could organize a government, rather than trying to continue to hold lines which in some cases are exposed and which are subject to this kind of pressure.
     So that has been our view. The longer it goes on, and the longer there is not an agreement on a government, the longer some groups stand out from these kinds of conversations, then the more hazardous the situation becomes.
     On the particular incident, however, it's a clear breach of the cease-fire. We have indicated it and we hope that the Soviet Union, which is committed to a policy based on the statement at Vienna, in regard to Laos - we are hopeful that we can bring about a restoration of the cease-fire. But we've got to use the time to try to move ahead in our political negotiations. Now, I agree it's a very hazardous course, but introducing American forces which is the other one - let's not think there is some great third course - that also is a hazardous course, and we want to attempt to see if we can work out a peaceful solution, which has been our object for many months. I believe that these negotiations should take place quickly. This is not a satisfactory situation today.
     [ 7.] Q. Mr. President, on another labor-management issue, there's a matter of some concern in northern California. The construction industry there may face a general shutdown because of the dispute between employers and the labor unions. The employers association appealed to the administration for help some time ago, and there has been a strike spreading during this time. Have you personally concerned yourself with this?
     THE PRESIDENT. I'm not aware of the appeal. In what way was the appeal made? The Federal mediators are there. In what way was it suggested?
     Q. It was an appeal they addressed to the White House, sir, and it has gone as far as the Secretary of Labor, I believe.
     THE PRESIDENT. What is the suggestion that they want? What do they want us to do?
     Q. They simply want some form of help, from the administration.
     THE PRESIDENT. Well, what - do they want us to settle it?
     Q. I don't know.
     THE PRESIDENT. I want to point out that as I said to the Chamber of Commerce, and as President Wagner of the Chamber of Commerce said, labor and management should settle these matters by themselves. We cannot settle labor matters in disputes across the country, unless they involve those areas where there may be a great national basic industry. But we cannot go from city to city, unless we are going to change the whole pattern of labor-management relations, and you get in, then, to wage and price setting, which we are opposed to. So that we are attempting to set down general guidelines in as effective a manner as we can, which we hope will govern these negotiations. I would hope that they would have an effect upon the construction industry, and its employees, as well as upon other industries. And I know that the Mediation Service is involved in this. I know that the Secretary of Labor in this case also is glad to be of assistance in providing his good offices. But this is a free society, and these gentlemen finally have to make their agreement themselves.
     Now, if a shutdown occurs which involves the health and safety, then of course it involves the National Government. But I have the impression that there is a great desire on every side to settle these matters without the United States Government. And we want to give them a fair opportunity to do that.
     [ 8.] Q. Mr. President, back to your relations with newsmen. According to a poll released this morning, a large percentage of our people, or the people who were polled, believe that the newsmen attending, and news ladies, do not ask you really important questions. I want to know what you think of that and at the risk of repetition, one of the questions they seemed to think was most important: Did you have any ideas towards any new steps to ease tensions and promote world peace?
     THE PRESIDENT. Well, we are attempting in two areas, which are both critical areas. One, I said we're continuing our conversations in Berlin. We have attempted in the last 2 or 3 days to indicate our concern about the matter in Laos. We are participating in Geneva in the disarmament talks. We have put forward the most far-reaching plan of any administration or the American Government ever, in regard to disarmament. We have labored for a long time - even to the point of - it's well known to us - to get an agreement on a cessation of nuclear tests. We are attempting to - lacking an accord, we have maintained our military forces so that through that means we can, as I've said, set an environment for parleys. And we have supported the United Nations in the Congo and elsewhere, which we regard as a very valuable arm in this struggle for peace. We are prepared to go any distance in order to maintain the peace, providing it does not involve the breaking of any commitments of the United States or involve any diminishment of the basic national security of the country.
     Q. Do you think we've overlooked any important questions, sir?
     THE PRESIDENT. I'm sure we have---
     Q. ---I meant the newsmen asking you.
     THE PRESIDENT. ---in the sense that we are trying, for example, to strengthen the Alliance for Progress. We've - I exchanged correspondence with Mr. Khrushchev about 2 months ago about our willingness to provide for the cooperation in s pace. We have supported resolutions at the United Nations which I believe in, in regard to the peaceful uses of outer space. We have thrown our space program open. It's been maintained chiefly under civilian control and therefore peaceful control. And we are attempting, on every level, cultural exchanges and all the rest to see if it's possible in these two different worlds to let them live together without destroying each other.
     But I think we always have to do more and we shall continue to do so. But it really requires a response in order to have peace, and so far we have not been able to evoke a response of sufficient force.
     [ 9.] Q. Mr. President, on the question of the administration's guidelines for wage increases, Mr. Reuther, in his report to the United Auto Workers, said that he disagreed at least in part with the guidelines. He said that the principle of tying increases to productivity should be applied only after certain catch-up wage increases. Now, just before you made your speech up there, he issued a statement indicating that he agreed with the administration. Has the administration been in touch with Mr. Reuther and has there been a meeting of minds on this?
     THE PRESIDENT. Well, we've been in touch with Mr. Reuther, yes. As I say, I went up there yesterday, and I did see his statement. And I thought it was a fine statement that he made, in which he indicated his general agreement with what we are attempting to do.
     [ 10.] Q. Mr. President, at the time of your controversy with the steel industry, you were quoted as making a rather harsh statement about businessmen. I am sure you know which statement I have in mind.
     THE PRESIDENT. Yes. You wouldn't want to identify it, would you? [Laughter]
     Q. Would you tell us about it, Mr. President?
     THE PRESIDENT. Would I want to comment on it?
     Q. Yes.
     THE PRESIDENT. Oh, well, the statement which I have seen repeated, as it was repeated in one daily paper, is inaccurate. It quotes my father as having expressed himself strongly to me, and in this I quoted what he said and indicated that he had not been, as he had not been on many other occasions, wholly wrong.
     Now, the only thing that was wrong with the statement was that, as it appeared in a daily paper, it indicated that he was critical of the business community - I think the phrase was "all businessmen." That's obviously in error, because he was a businessman himself. He was critical of the steel men. He'd worked for a steel company himself. He was involved when he was a member of the Roosevelt administration in the 1937 strike. He formed an opinion which he imparted to me, and which I found appropriate that evening. [Laughter] But he confined it, and I would confine it. Obviously these generalizations as repeated are inaccurate and unfair, and he has been a businessman and the business system has been very generous to him. But I felt at that time that we had not been treated altogether with frankness, and therefore I thought that his view had merit. But that's past, that's past. Now we're working together, I hope.
     [ 11.] Q. Mr. President, do you have any comment on the so-called reverse freedom rides, whereby some southern segregationists are attempting to send Negroes north?
     THE PRESIDENT. Yes. Well, I think it is a rather cheap exercise in--- You know, in this country people are moving every day by the thousands. Twenty-five percent of our population live in different States in the last decade than they did. There are hundreds and thousands of people coming from one State to another. So that this, rather, exercise in publicity to indicate, if I - this man, it seems to me, really doesn't merit very much comment. I think he's - we have difficulties in every area. We have people who are out of work in every area. There are people who are inadequately housed in every area. And we ought to do better in every area. But it seems to me, as I said the other day, there is no city, traditionally, that has enjoyed a happier reputation than New Orleans. And that reputation, in my opinion, based on my visit there Friday, is highly deserved. And I would not let one man possibly blacken it.
     [ 12.] Q. Mr. President, there have been rumors in print in and out of Texas that Vice President Johnson might be dropped from the Democratic ticket in 1964. I'd like to ask if you have any reason whatever to believe that either end of the Democratic ticket will be different in 1964?
     THE PRESIDENT. Well, I don't know about what they will do with me, but I am sure that the Vice President will be on the ticket if he chooses to run. We were fortunate to have him before - and would again - and I don't know where such a rumor would start. He's invaluable. He fulfills a great many responsibilities as Vice President. He participates in all of the major deliberations. He's been in the Congress for years. He is invaluable. So of course he will be, if he chooses to be, part of the ticket.
     [ 13.] Q. Mr. President, it has been the stated policy, as you said earlier, for this Government to restrict outer space for peaceful objectives only. Will not the proposed H-bomb explosion 500 miles up jeopardize this policy and objective?
     THE PRESIDENT. No, I don't think so. I don't think so. I know there's been disturbance about the Van Allen belt, but Van Allen says it's not going to affect the belt, and it's his! [Laughter]
     But it is a matter which we are - I've read the protests and it is a matter which we are looking into to see whether there is scientific merit that this will cause some difficulty to the Van Allen belt in a way which will adversely affect scientific discovery. And this is being taken into very careful consideration at the present time. So that I want you to know that whatever our decision is, in regard to the Van Allen belt, it will be done only after very careful scientific deliberation, which is now taking place - during this past week - and will go on for a period. In regard, generally, what we are attempting to do is to find out the effects of such an explosion on our security, and we do not believe that this will adversely affect the security of any person not living in the United States.
     [ 14.] Q. Mr. President, a special emergency panel has recommended a 10.2 cent an hour pay raise for about 500,000 railroad employees, which is estimated to cost about $100 million a year. You have observed that the Board said it would be noninflationary. Do you believe it would be noninflationary?
     THE PRESIDENT. Well, I would - the Board stated it would be noninflationary, and I stated it was my judgment that they should negotiate a noninflationary statement, a settlement. Now the railroads have objected to the arrangement by saying it's too much, the railway unions too little.
     I am hopeful that the parties will negotiate, and we would, of course, be glad to be of any technical assistance we could, if we are asked, in order to determine the extent of - what effect it would have on the cost of living. But it was a good board. They made a very flat statement in regard to it, and I think that what is now incumbent on both parties is to see if they can reach what I would consider a noninflationary agreement.
    [ 15.] Q. Mr. President, there have been various congressional and executive studies in an effort to develop a uniform patent policy covering inventions made under Government contracts, and we're wondering if you intended to submit any legislation to spell out a uniform Government patent policy?
     THE PRESIDENT. Well, it's a difficult problem, because you have to balance off the gains on the one hand and at the same time the incentives to companies to spend their own funds in order to develop patents which would give them a return in other years. So that we have some differences in the Space Agency problem, the Department of Defense, and perhaps another agency of the Government. But it is a matter which is being reviewed now by those agencies which are most involved. And if we have any changes to make at the conclusion of that, then I will send recommendations to the Hill.
    [ 16.] Q. Mr. President, more fundamental, perhaps, than the numbers game that is being played between Bonn and Washington over the international access authority and how many members it ought to have, there seems to be a sense of insecurity in Bonn at the moment and in Germany, generally, about the degree to which this administration will support the basic position of no recognition of East Germany, no degree of recognition at all. I wonder if you could define that point just a little bit. How far are we prepared to go?
     THE PRESIDENT. Well, we've never suggested that the access authority - which was a proposal which could have easily been rejected and alternate language suggested in accordance with the normal exchanges between governments, which is the reason we sent it - it was never suggested that that constituted a de facto, or de jure recognition of the East German regime, which we have not supported, because we have supported the concept of the reunification of Germany.
     We, after all - the East German Government, or regime, and the West German Government were participants in the same room at the 1959 Geneva conference. They didn't sit at the table, but they sat in chairs just behind the table. Now, what did that constitute? After all, the East German regime controls over go today - supervises over 90 percent of the traffic into Berlin, and there are these exchanges in regard to that traffic. What does that constitute? I don't think it constitutes recognition. And it doesn't by either de facto or de jure.
     We participate in the Laos convention in Geneva with the Chinese Communists in an attempt to work out an accord in Geneva on Laos. We don't recognize them either way.
     So that what we're attempting to do is to work out a solution which will provide more security for the people of West Berlin. Because when the difficult times come, it is the United States that carries the major burden and is looked to to take the major actions which will sustain the freedom of the city. So that I think we have some rights to at least explore the possibilities of finding a better solution than we now have.
     But in answer to your question, we did not believe and do not believe the proposals that we made constitute a kind of recognition. For example, among the 13 of the proposals there was a West Berlin, which is not a separate government, and there was an East Berlin, which is not a separate government. So that it was an authority, which might be compared to the Port of New York and not a government, a governmental group, or a group of governments. But this sort of necessity to debate this matter for a month makes it very difficult to carry on any negotiation with the Soviet Union because all of our proposals are on the table and fought out in public even before they become our official position. So that it seems to me the best thing to do would be to - if anybody has any objection, to tell us - and we have said from the beginning that in our efforts to reach an accord, we certainly recognize the necessity of maintaining unanimity in the alliance.
     I don't know whether this is the best way to carry on these negotiations if these matters are going to become so publicly debated. If this isn't the best solution, perhaps some other way should be done, and we'll be glad to hear that suggestion. But we carry the major military burden, we enforce, and have the major military build-up - 160,000 Americans called up since last July - and it is not difficult to make suggestions and say, oh, well, you shouldn't do this or that, and at the same time some countries do not play as active a role as we've been willing to play in an attempt to work this out.
     Q. In that connection, sir, I wonder do you have any theory or any information as to the reason for the agitation, the degree of agitation?
     THE PRESIDENT. No, I think a lot of it - I must say I read his Monday's speech in which he stated - Chancellor Adenauer - that the most important result of Athens can be summarized in one sentence: the unity of the free West. If you think back to the ministers' meeting of NATO in 1961, unless my memory fails me, it was in December - this was Chancellor Adenauer - "there the unity of the free people of the West did not look good. And the unity of the free people of the West, I am convinced, is the best asset of freedom."
     But he said this: "The whole political future in the East of Germany finally depends on the unity of the West. And I believe we can be very satisfied with the way this NATO conference went."
     So I think that some of this is speculation which does not serve the cause. Mr. Drew Middleton in the Times made a very strong article on the work Secretaries McNamara and Rusk had done. He said that they had witnessed "a striking demonstration both of the United States reasons for leading the West and its ability to do so." So I think we had pretty good unity as of Saturday or Sunday, and I hope we will this Saturday or Sunday.
     [ 17.] Q. Would you care to comment on the voting in the Senate today on the cloture petition on the literacy test bill, and whether you think this is possible as a piece of legislation this year?
     THE PRESIDENT. Well, there were two votes. One was on the motion to table, and that got a rather large vote against tabling. If that vote indicates that the members are for it, that would be very encouraging - I think it was 63 to 33 or 34. On the motion, however, for cloture, which would permit us to have a vote on this matter, then the members voted differently.
     As I understand it, Senator Mansfield is trying again Monday, but if we don't succeed, if the Senate doesn't succeed - if the country doesn't succeed in getting the vote by Monday, cloture, then of course there's no use saying you're for it, because it won't ever come up. And I must say I find it extremely difficult to understand how anybody can - though I respect Senator Cooper, and I know his concern is constitutional, and I respect the others who have various things - but I must say this involves the right to vote. And I've seen these cases of people with college degrees who were denied being put on the register because they supposedly can't pass the literacy test. It doesn't make any sense. So I'm hopeful the Senate will vote, and there'll be another chance on Monday.
    Q. Thank you, Mr. President.

NOTE: President Kennedy's thirty-second news conference was held in the State Department Auditorium at 4 o'clock on Wednesday afternoon, May 9, 1962.