THE PRESIDENT. Good afternoon. I have two statements.
     [ 1.] The situation in the area of the Taiwan Strait is a matter of serious concern to this Government. Very large movements of Chinese Communist forces into this area have taken place. The purpose of these moves is not clear. It seems important in these circumstances that the position of the United States Government be clearly understood.
     Our basic position has always been that we are opposed to the use of force in this area. In the earlier years President Eisenhower made repeated efforts to secure the agreement of Communist China to the mutual renunciation of the use of force in the Taiwan area, and our support for this policy continues.
     One possibility is that there might be aggressive action against the offshore islands of Matsu and Quemoy. In that event the policy of this country will be that established 7 years ago under the Formosa Resolution. The United States will take the action necessary to assure the defense of Formosa and the Pescadores. In the last crisis in the Taiwan area in 1958, President Eisenhower made it clear that the United States would not remain inactive in the face of any aggressive action against the offshore islands which might threaten Formosa.
     In my own discussion of this issue in the campaign of 1960, I made it quite clear that I was in agreement with President Eisenhower's position on this matter. I stated this position very plainly, for example, on October 16, 1960: "The position of the administration has been that we would defend Quemoy and Matsu if there were an attack which was part of an attack on Formosa and the Pescadores. I don't want the Chinese Communists to be under any misapprehension. I support the administration's policy towards Quemoy and Matsu over the last 5 years."
     Under this policy sustained continuously by the United States Government since 1954, it is clear that any threat to the offshore islands must be judged in relation to its wider meaning for the safety of Formosa and the peace of the area.
     Exactly what action would be necessary in the event of any such act of force would depend on the situation as it developed. But there must be no doubt that our policy, specifically including our readiness to take necessary action in the face of force, remains just what it has been on this matter since 1955.  It is important to have it understood that on this point the United States speaks with one voice. But I repeat that the purposes of the United States in this area are peaceful and defensive. As Secretary Dulles said in 1955, "The Treaty arrangements which we have with the Republic of China make it quite clear that it is in our mutual contemplation that force shall not be used.  The whole character of that Treaty is defensive."
     This continues to be the character of our whole policy in this area now.
     [ 2.] Secondly, I want to emphasize once again how deeply I am convinced that the passage this year of the trade expansion bill, on which one House will vote tomorrow, is vital to the future of this country. To recommit this bill back to the committee is to defeat it. To extend it for 1 year is to defeat the purpose, because we have exhausted the powers given under the previous - under the present - law. All its bargaining authority has been used up, and it will mean that we will fall back and behind at a time when the Common Market in Europe is moving ahead. This is no time to penalize our industry and agriculture by denying them markets. If we cannot make new trade bargains with the Common Market in the coming year, our export surplus will decline, more plants will move to Europe, and the flow of gold away from these shores will become more intensified.
     It is for these reasons that this bill has enjoyed bipartisan endorsement from the very beginning, and I am confident that the members of both parties will support this bill in the national interest tomorrow.
     [ 3.] Q. Mr. President, in the furor over the Supreme Court's decision on prayer in the schools, some members of Congress have been introducing legislation for constitutional amendments specifically to sanction prayer or religious exercise in the schools. Can you give us your opinion of the decision itself and of these moves of the Congress to circumvent it?
     THE PRESIDENT. I haven't seen the measures in the Congress and you would have to make a determination of what the language was and what effect it would have on the first amendment. The Supreme Court has made its judgment, and a good many people obviously will disagree with it. Others will agree with it. But I think that it is important for us if we are going to maintain our constitutional principle that we support the Supreme Court decisions even when we may not agree with them.
     In addition, we have in this case a very easy remedy and that is to pray ourselves. And I would think that it would be a welcome reminder to every American family that we can pray a good deal more at home, we can attend our churches with a good deal more fidelity, and we can make the true meaning of prayer much more important in the lives of all of our children. That power is very much open to us. And I would hope that as a result of this decision that all American parents will intensify their efforts at home, and the rest of us will support the Constitution and the responsibility of the Supreme Court in interpreting it, which is theirs, and given to them by the Constitution.
     [ 4.] Q. Mr. President, in a somewhat related field, there seems to be an impasse in a conference committee on a bill to aid higher education over a 5-year period, that $1½ billion bill. There are some administration figures who have been advocating the House bill which provides across the board grants for all types of colleges, including church-related colleges, as opposed to the Senate version which provides loans only for church-related colleges, and I wonder what your position is. Which of these two versions do you prefer?
     THE PRESIDENT. Well, as you know, the administration sent up a program which is somewhat different from the bills that are in the Congress now, which provided loans to all schools. As you know, based on the brief on which I relied last year in my comments on the question of aid to nonpublic schools, secondary schools, I stated at that time that the brief indicated, and my own analysis indicated, and that of the Department of HEW, that there was not a comparable constitutional question on aid to higher education, to non-State colleges or universities.
     In my opinion there are very clear limitations based on the Supreme Court decisions on aid to nonpublic schools in the secondary field. But in those fields the attendance is compulsory, it is universal. There is particular tradition connected with our public school system which has placed it in a special place in the traditional and constitutional life of our country. This is not true of higher education. So I did not feel, based on that, that there was a constitutional question, a public policy matter. And I am hopeful that the Congress will report out legislation which will assist schools of higher learning and also that some arrangement will be made on scholarships, and that all schools will be treated as they are in research grants and other ways - will be treated in the same fashion.
     [ 5.]  Q. In connection with your China statement, would you say, sir, what the position of the United States would be toward a return to the mainland by Chinese Nationalist forces? There have been reports recently, from Taiwan, that the time may be approaching for such a move.
     THE PRESIDENT. Well, it seems to me that the statement indicates the view that I wish to express today. I think the statement at the conclusion emphasized the defensive nature of our arrangement there. That was true in 1955. General Eisenhower made that clear, I think, in his letter to Senator Green in 1958. I have made it clear today that our arrangements in this area are defensive.
     [ 6.]  Q. Mr. President, in your television interview about a month ago now, explaining your new trade expansion bill, I was impressed with your emphasis on the need for the European nations to take over more of their own defense. My questions are two: Does this mean that you would like to see a gradual withdrawal of U.S. troops from Europe; and, two, are you also considering sending men to Europe on shortened tours of, say, I year, without their families?
     THE PRESIDENT. Well, I would hope that we could withdraw or lessen the number of forces at some time but certainly not under present conditions until we have had a clear indication of what the future is going to be in Berlin. Quite the reverse, as you know, we have in the last 12 months strengthened our forces in Berlin and we have expressed our hope that other members of NATO would strengthen theirs. The United States has six divisions in Western Germany. Other members of NATO have substantially less, with the exception of the West German Government itself, and I would hope that they strengthen their forces. They represent a large geographic area with ever-increasing wealth. The United States cannot sustain this burden of maintaining the atomic deterrent, maintaining the sea strength we do, our ground commitments all around the globe, and still maintain such a large force in Western Germany. But we shall continue to do so as long as we feel it contributes to the security of Western Europe and the maintenance of our commitments.
     Now, in regard to your second question, that is not a matter which is before us at the present time. At the present time we are planning to continue the tours of duty that we have on the books.
     [ 7.]1 Q. Mr. President, in your campaign for the Presidency, in connection with the offshore islands, you suggested in advance of any violent attack in the area that might be construed as an attack upon Formosa and the Pescadores that we might reduce our commitment to Quemoy and Matsu, that this was not the appropriate place to draw the line because the islands were strategically indefensible and unnecessary. What is your view now?
     THE PRESIDENT. I think that my statement represents the view of the United States Government, and the view of the United States Government is regulated by the resolution which was passed in - by the Congress in 1954, and which has been interpreted by President Eisenhower and again by me.
     President Eisenhower, as you know, had some views about what should be the extent of the commitment of the Chinese Nationalist forces to these islands and, as a matter of fact, sent Admiral Radford out in the mid-fifties to discuss it. I also made some statements. My views on the matter in 1954 when the treaty came up are well known. But the fact of the matter is I also said in the fall of 1960 that there should be no withdrawal from these islands under the point of a gun, and that the matter of these islands - that the President must make a judgment based on the resolution of the Congress, that the action he will take will depend upon his judgment as to the effect of any action which the Chinese Communists might take on Formosa and the Pescadores.
     Now, that is what my statement says. We stand in the traditional policy which has been true since 1954.
     [ 8.] Q. Mr. President, speaking generally about your legislative program, do you feel that it has had the proper degree of support from the Democratic majorities in the House and Senate?
     THE PRESIDENT. No, we haven't gotten the legislative program. I don't think we ought to go home until we get a good deal more of it by. I think that is the wishes of the majority. We should realize that some Democrats have voted with the Republicans for 25 years, really since 1938, and that makes it very difficult to secure the enactment of any controversial legislation. You can water bills down and get them by, or you can have bills which have no particular controversy to them and get them by. But important legislation, medical care for the aged and these other bills, farm programs, they are controversial, they involve great interests, and they are much more difficult.
     Now, if you recall in January 1961 when we had a very basic issue before the Congress, which was whether the administration and the National Democratic Party would have the power to put its program on the floor of the House, the fight over the rules with Speaker Rayburn coming to the well of the House and making this a matter of his own personal prestige, we won that by five votes.
     That indicated how close the balance was in the House of Representatives. Some Democrats vote with the Republicans, and have for a good many years. So that we have a very difficult time, on a controversial piece of legislation, securing a working majority. That is why this election in November is an important one, because if we can gain some more seats, we will have a workable majority, and if we don't, then of course we will not. So that I am concerned about what progress we make. There is no sense in the Congress going home without taking action on a whole variety of steps which will strengthen our country and our economy.
     Now, on the farm bill, where we got defeated, as you know, by a close vote, there were powerful interests against it. In the first place, there was the unanimous opposition, with the exception of one Congressman, of the Republicans. And in addition there was the opposition of those who store surpluses. They like to have additional surpluses built up. There are 9 billion of them now, but they want more because they make money out of it. Then there were those who want cheap feed, and they want - the more surpluses there are, the cheaper the feed is. So that those who feed livestock, they did not want it. Then there are other parts of the country who want to plant corn, and who figure that if there are restraints on production they won't be able to plant it. So there are powerful interests that build up, and to try to get a program under control is very difficult. The fact of the matter is if we secured passage of that bill, it would have meant a saving of $1 billion, and that means that if we do not get a bill this year, it will cost $7½ billion in the next budget, instead of $6½ billion for agriculture. In addition, the farm income will drop, as it dropped in the fifties, because the surpluses will pile up. We will try to buy them under the support price, which is compulsory - the permanent bill - the surpluses will pile up, the farmers' income will go down, and no one will benefit.
     So I think it is a great mistake.
     Now, what is interesting, if I may conclude, is that there was support indicated, after our bill was defeated, for the emergency feed grain bill. The Republicans indicated they would support it. Yet last year when that bill was up, all but four or five voted against it. Now, it is hard to get bills by, that put restraints, but these are the kinds of bills, the tax bill and others, that a complicated economy such as ours must have passed.
     They may not be of great emotional public issues, but we have got to pass them or otherwise we will begin to lose control of the management of our economy and of our governmental finances.
     So that I think the Democrats have to do better and I hope that some Republicans would support us. We supported President Eisenhower in important matters, and I would hope some Republicans will support us on the trade bill, which is vital, and on other measures as the summer goes on.
     Q. Mr. President, Secretary Rusk has just about completed his rounds of the Western European capitals. I wonder if you can give us an evaluation of his trip, with particular reference to whether this Government has now accepted France's determination to build its own nuclear power, and whether we will seek to coordinate and integrate that power into the NATO system?
     THE PRESIDENT. We have always accepted its determination to do so. What we have not agreed to is to participate in the development of a national deterrent. We believe that is inimical to the community interest of the Atlantic Alliance, that it encourages other countries to do the same.
     Now, France has determined to do so, she is going to do it. But I think that for the United States to associate with that effort, to associate with the concept of additional independent national nuclear deterrents, to play our part in its development, would be a mistake, both from the point of view of the United States, of the Atlantic Community, and of peace, because other countries will be compelled to do the same. And in my judgment, the NATO Alliance and the steps we have taken to implement the NATO Alliance give adequate security to Europe and the United States. I think we should stay with that. Now, the French do not agree, and they are going ahead. We accept that. But we do not agree with it.
     [ 10. ] Q. Mr. President, going back to the fall election, there has been considerable criticism of the candidacy of your brother, Ted, for Senator from Massachusetts. Among your most vigorous supporters it is said that there are going to be too many Kennedys in Washington and that Ted has not demonstrated a capacity for this. Would you comment and tell us whether you think this might be an issue in the fall?
     THE PRESIDENT. Well, I don't know whether they - I would characterize them as my most vigorous supporters, but I would say that there has been criticism. But as Ted, my brother, pointed out, there are nine members of my family. It is a big family. They are all interested in public life. So public life is centered - at least the great issues - in the United States Capital. Now, the people of Massachusetts are going to decide that. He had a very vigorously contested convention. He is going to have a primary in September. He will have a very vigorous fight in November. And I would think the people of Massachusetts could make a judgment as to his qualifications and as to whether there are too many Kennedys.
     Now, as far as my own judgment, aside from the fraternal relations, I did put him in charge of managing my campaign in '58 in Massachusetts. But more important, he was in charge of our western campaign in the preconvention period which was a very intensive campaign, where we secured the support of a good many delegates, and in charge of our campaign in the West in the campaign itself, so that I have confidence in his ability. The people of Massachusetts must make the judgment, however.
     [ 11.] Q. The organization of a committee to raise $62 million to ransom the invasion prisoners held by Castro was announced yesterday. One of its members is your sister-in-law, Mrs. Radziwill. Do you approve of public subscription to ransom these prisoners? And don't you think this money would contribute a great deal towards easing Castro's economic difficulties?
     THE PRESIDENT. Well, I am not informed about it. She is a good citizen and is free to make a judgment and anyone who wishes to contribute certainly is free to do so. And I certainly sympathize with the basic desire, which is to get a good many hundreds of young men out of prison whose only interest was in freeing their country. So I am certainly not critical of any efforts that are being made in this field.
     [ 12.] Q. Mr. President, some members of your own party have a feeling that it might be a good idea to get Congress out of town and get them out to campaigning. On the other hand, you have outlined today quite a program remaining, and I wonder if you had any specific date in mind when you would like to see them go?
     THE PRESIDENT. No, I think that is up to them. It is much easier in many ways for me, and for other Presidents, I think, who felt the same way, when Congress is not in town - [laughter] - but it seems to me that we cannot all leave town. We ought to all stay here. I think Congress is determined to try to bring up a program which is useful: higher education; we've got medical care coming up next week; we've got the trade bill. I think that we've got a number of things left to do and I am confident the Congress will stay and try to do them.
     [ 13.] Q. Mr. President, in December 1954, following the signing of the Mutual Security Treaty with Nationalist China, there was an exchange of letters between the United States and Nationalist China under which Nationalist China pledged itself not to take forceful action against the mainland without the consent of the United States. Do you think it is within the spirit of that exchange of letters that Chiang Kai-shek should be making statements proclaiming his intention of regaining a foothold on the mainland?
     THE PRESIDENT. No, I think that that letter still governs. We would regard the agreement which was part of the '54 action, that no such action as you mention would take place without the agreement of the United States, and I have indicated that our interest in this area is defensive, and we would like to have a renunciation of the use of force. Does that explain it?
     [ 14.] Q. Mr. President, you mentioned Berlin in connection with the presence of our sizable forces in Europe. Have you thought of any reduction or withdrawal of those forces with respect to having a written agreement on Berlin, or would lessening of tension suffice?
     THE PRESIDENT. No, it would be a strategic and tactical judgment as to the use of our resources which would include, of course, men and financial resources, and the assessment of what effort the other countries were making.
     For example, and this is only for example, we would have to make a judgment as to whether a conventional force of sufficient size could be developed in Europe to maintain itself without the use of atomic weapons, short of an all-out attack by the Soviet Union. This would require a different force level than it would if we decided to use weapons under different conditions. These are all part of the matter which we must consider. We must also see what the Europeans themselves are doing about conventional forces. And we also must take into account our dollar - our balance of payments problems. As you know, it costs about $750 million to keep our forces in Germany. That is balanced off by German purchases here. But it costs us $325 million to keep them in France, and that is not balanced off - $200 million-odd in Britain - $100 million in Italy. We have to make a judgment of what is in the best security interests of the United States.
     But let me just make it clear that a good deal of what we are now talking about is in a sense academic. We plan to keep the six divisions in Europe for the foreseeable future.
     [ 15.] Q. Mr. President, General Eisenhower said the other night that he felt the current present administration was spending too much money on defense. He also said that he felt the administration was floundering in the face of various problems. Would you care to comment on those two points?
     THE PRESIDENT. No, I think, I would be glad - I think we are spending a good deal of money on defense, and I don't enjoy it. But on the other hand, I think we live in a very dangerous world, and I believe that being strong helps maintain the peace. I must say on the one hand that we seem to be under attack by some Republicans for not doing enough to stand up to the Communists, and on the other by those who say we are spending too much on defense. There should be some coordination of policy, because it seems to me that otherwise it may appear that the Grand Old Party may be floundering. [Laughter]
     [ 16.] Q. Mr. President, a poll of about 30,000 businessmen by the Research Institute of America came up today with a vote of 2 to 1 in favor of your legislation, including the tax credit and the trade bill. Yet at the same time a substantial majority considers the administration hostile to business. What does this apparent inconsistency suggest to you?
     THE PRESIDENT. Well, I think that it suggests that most businessmen, number one, are Republicans, and, number two, that they realize what is in the best interests of business and the country, and that is the trade bill and the tax credit.
     I am glad to have that poll even though it did not result in a resounding vote of confidence for the administration. I think the fact that businessmen so strongly support these two pieces of legislation which have been somewhat - which have been attacked by a few, or relatively few, who have mounted a very effective attack - I thought this was a poll which every member of the Congress should look at carefully. I think the businessmen are right. Both of these pieces of legislation are useful. I think the administration is, also. But more importantly is the fact they are supporting two important bills which I hope will pass, and which will be in the interest of the American economy, this year.
     [ 17.]  Q. Mr. President, I wonder if you could tell us something about your plans for your Mexican trip and any comments you have relating that to the general Latin American situation?
     THE PRESIDENT. I think it is important. Mexico is extremely important. I am following where President Roosevelt and every other President since then have gone to pay a visit. We have been honored by visits from the Presidents of Mexico. We are neighbors. There are a good many problems that we have in common, as well as opportunities. And, in addition, we are anxious - I am anxious - to discuss not only the bilateral relations but also what we together can do to strengthen the democratic fabric in all of Latin America.
     [ 18.] Q. Mr. President, 4 weeks ago you said that you had no plans to propose tax reduction at that time, at the moment, but that in new conditions you might think about it again. In the past month, the economic situation has not gotten markedly better, and the stock market has gotten worse. What do you think of tax reduction now?
     THE PRESIDENT. I think if we decide it is needed we will propose it, though I do point out that we do have one bill which would give us standby powers on tax reduction which I think would be very useful. It doesn't seem as if we are going to get action on that, but that is a tax reduction bill which would give us powers to move if the economy turned down. It has taken us nearly 18 months and we haven't finally gotten a judgment on our tax credit bill, which indicates the length of time it can take moving through the ordinary procedures of the Congress. That is why the standby power is important.
     However, we will continue to watch the economy. There are good signs in the economy and there are signs which are not so good, so we will continue to watch it very carefully and make a judgment.
     [ 19.] Q. Mr. President, the recently released report of the National Advisory Committee on Radiation has pointed out that in the event the fallout contamination from weapons testing should exceed acceptable limits only you have the authority to halt testing and order countermeasures. The report also points out that responsibility for action against other nuclear hazards has not been clearly assigned. Under what circumstances would you halt nuclear tests or order countermeasures to protect against these hazards, and are you considering assigning responsibility for countermeasures against all nuclear hazards to a special agency?
     THE PRESIDENT. Well, as of today, the situation is such that our interests are served by testing. In addition, as you know, the iodine content has increased recently. The hazard is not present and will not be present, from our tests. Quite obviously, if tests are carried on for a long period of time all over the world this will become an increasingly serious problem. It is not today, however, and there is no health hazard here in this country nor will there be from our tests.
     [ 20.] Q. Mr. President, aside from your constitutional responsibilities, as an individual American citizen do you personally approve or disapprove of the Supreme Court decision outlawing prayer in public schools?
     THE PRESIDENT. I think my answer was responsive to that question.
     [ 21.] Q. Mr. President, did you ask Walt Whitman Rostow to draw up this paper on foreign policy and defense policy, or did he just undertake it on his own to interpret the policies of the Government?
     THE PRESIDENT. To interpret the policy - he was acting as the successor to Mr. George McGhee and fulfilling his function of policy planning and one of the functions of the policy planning staff is to plan policy. [Laughter] And that is what he is attempting to do.
     Now, the fact of the matter is that we have in the National Security Council voluminous papers from the fifties which are the general guide of policy lines in the United States. But there have been a good many changes since the 1950's. In the first place, we discussed one of them today, the French atomic rearmament, the question of the Sino-Soviet relations. There are a great many problems, Castro and all the rest.
     We are examining to see - guerrilla warfare, anti-insurgency - what should be our military policy in it, what should be our force levels. These are matters which the State Department and the Department of Defense are examining and will come through to the National Security Council to see whether there should be any changes in the policies that were laid down in the 1950's. So Mr. Rostow is fulfilling his function. I have not studied the paper; the Secretary of State has it. But Mr. Rostow is acting under instructions and acting very responsibly.
     Q. Mr. President, what are your views of the present situation in Laos?
     THE PRESIDENT. Well, I am concerned that the agreement which came into effect in June among the three princes, that it shall be successfully implemented, and that the Geneva accords agreed to last summer shall be amplified at the coming Geneva conference. Laos continues to be a matter of great concern to us. We have never suggested that there was a final, easy answer to Laos. On the other hand, there is a cease-fire, there is a government; they are meeting in Geneva. We will continue to cooperate in every way we can. It is a situation which is as uncertain and full of hazard, which life is in much of the world, and we will continue to support the concept of an independent and neutral Laos, to which Mr. Khrushchev has also given his personal commitment.
     Reporter: Thank you, Mr. President.