Increasingly, however, those countries will have to turn more toward manufactured and semimanufactured products for balanced development and major export growth. Thus they need to be assured of access to the expanding markets of the industrialized world. In order to help achieve this, I have determined to take the following major steps:

-First, to lead a vigorous effort to reduce the nontariff barriers to trade maintained by nearly all industrialized countries against products of particular interest to Latin America and other developing countries.

-Second, to support increased technical and financial assistance to promote Latin American trade expansion.

-Third, to support the establishment within the inter-American system of regular procedures for advance consultation on trade matters. United States trade policies often have a very heavy impact on our neighbors. It seems only fair that in the more balanced relationship we seek, there should be full consultation within the hemisphere family before decisions affecting its members are taken, not after.

-Finally, and most important, in world trade forums, I believe it is time to press for a liberal system of generalized tariff preferences for all developing countries, including Latin America. We will seek adoption by all of the industrialized nations of a scheme with broad product coverage and with no ceilings on preferential imports. We will seek equal access to industrial markets for all developing countries so as to eliminate the discrimination against Latin America that now exists in many countries. We will also urge that such a system eliminate the inequitable "reverse preferences" that now discriminate against Western Hemisphere

countries.

Restrictions on Assistance Loans Reduced

There are three other important economic issues that directly involve the new partnership concept and which a number of our partners have raised. They raised them with me and raised them with Governor Rockefeller, with the Secretary of State and others in our administration.

These are: "tied" loans, debt service, and regional economic integration.

For several years now, virtually all loans made under United States aid programs have been "tied"; that is, as you know, they have been encumbered with restrictions designed to maintain United States exports, including a re

quirement that the money be spent on purchases in the United States.

These restrictions have been burdensome for the borrowers. They have impaired the effectiveness of the aid. In June I ordered the most cumbersome restrictions removed.

In addition, I announce tonight that I am now ordering that, effective November 1, loan dollars sent to Latin America under AID be freed to allow purchases not only here but anywhere in Latin America.

As a third step, I am also ordering that all other onerous conditions and restrictions on U.S. assistance loans be reviewed with the objective of modifying or eliminating them.

If I might add a personal word, this decision on freeing AID loans is one of those things that people kept saying ought to be done but could not be done. In light of our own balanceof-payments problems, there were compelling arguments against it. I can assure you that within the administration we had a very vigorous session on this subject. But I felt, and the rest of my colleagues within the administration felt, that the needs of the hemisphere had to come first, so I simply ordered it done, showing our commitment in actions rather than only in words. This will be our guiding principle in the future.

We have present many Members of the House and Senate here tonight. I am sure they realize that there are not too many occasions that the President can accomplish something by just ordering it to be done.

Debt Service and Economic Integration

The growing burden of external debt service has increasingly become a major problem of future development. Some countries find themselves making heavy payments in debt service which reduce the positive effects of development aid. Therefore, tonight I suggest that CIAP might appropriately urge the international financial organizations to recommend possible remedies.

We have seen a number of moves in the Americas toward regional economic integration, such as the establishment of the Central American Common Market, the Latin American and Caribbean Free Trade Areas, and the Andean Group. The decisions on how far and how fast this process of integration goes, of course, are not ours to make. But I do want to stress this: We in the United States stand ready to help in this effort if our help is requested and is needed.

On all of these matters, we look forward to consulting further with our hemisphere neighbors and partners. In a major related move, I am also directing our representatives to invite CIAP, as a regular procedure, to conduct a periodic review of U.S. economic policies as they affect the other nations of the hemisphere and to consult with us about them.

Similar reviews are now made of the other hemisphere countries' policies, as you are aware; but the United States has not previously opened its policies to such consultation. I believe that true partnership requires that we should; and henceforth, if our partners so desire-as I gather from your applause you do we shall.

I would like to turn now to a vital subject in connection with economic development in the hemisphere; namely, the role of private investment. Clearly, each government in the Americas must make its own decision about the place of private investment, domestic and foreign, in its development process. Each must decide for itself whether it wishes to accept or forgo the benefits that private investment can bring.

Advantages of Private Investment

For a developing country, constructive foreign private investment has the special advantage of being a prime vehicle for the transfer of technology. And certainly from no other source is so much investment capital available, because capital from government to government on that basis is not expansible. In fact, it tends to be more restricted, whereas private capital can be greatly expanded.

As we have seen, however, just as a capitalexporting nation cannot expect another country to accept investors against its will, so must a capital-importing country expect a serious impairment of its ability to attract investment funds when it acts against existing investments in a way which runs counter to commonly accepted norms of international law and behavior. Unfortunately and perhaps unfairly, such acts in one of the Americas affect investors in the entire region.

We will not encourage U.S. private investment where it is not wanted or where local conditions face it with unwarranted risks. But I must state my own strong belief, and it is this: I think that properly motivated private enterprise has a vitally important role to play in social as well as economic development in all of the nations. We have seen it work in our own country. We have seen it work in other countries, whether they are developing or developed,

other countries that lately have been recording the world's most spectacular rates of economic growth.

Referring to a completely other area of the world, exciting stories of the greatest growth rates are those that have turned toward more private investment rather than less. Japan we all know about, but the story is repeated in Korea, Taiwan, Malaysia, Singapore, and Thailand.

In line with this belief we are examining ways to modify our direct investment controls in order to help meet the investment requirements of developing nations in the Americas and elsewhere. I have further directed that our aid programs place increasing emphasis on assistance to locally owned private enterprise. I am also directing that we expand our technical assistance for establishing national and regional capital markets.

As we all have seen, in this age of rapidly advancing science, the challenge of development is only partly economic. Science and technology increasingly hold the key to our national futures. If the promise of this final third of the 20th century is to be realized, the wonders of science must be turned to the service of man.

In the Consensus of Viña del Mar we were asked for an unprecedented effort to share our scientific and technical capabilities.

To that request we shall respond in a true spirit of partnership.

This I pledge to you tonight: The Nation that went to the moon in peace for all mankind is ready, ready to share its technology in peace with its nearest neighbors.

Coordination of U.S. Government Activities

Tonight I have discussed with you a new concept of partnership. I have made a commitment to act. I have been trying to give some examples of actions we are prepared to take.

But as anyone familiar with government knows, commitment alone is not enough. There has to be the machinery to ensure an effective followthrough.

Therefore, I am also directing a major reorganization and upgrading of the United States Government structure for dealing with Western Hemisphere affairs.

As a key element of this-and this is one of those areas where the President cannot do it and he needs the approval of the Congress-but as a key element of this, I have ordered preparation of a legislative request, which I will submit to the Congress, raising the rank of the Assistant Secretary of State for Inter-American Af

fairs to Under Secretary, thus giving the hemisphere special representation.

I know that many in this room, 15 years ago, urged that upon me, and I see Mr. Pedro Beltrán here particularly applauding. He urged it upon me just a few years ago, too.

I trust we will be able, through the new Under Secretary of State, to do a more effective job with regard to the problems of the hemisphere; and the new Under Secretary will be given authority to coordinate all United States Government activities in the hemisphere so that there will be one window for all of those activities.

And now, my friends in the American family, I turn to a sensitive subject. Debates have long raged, raged in the United States and elsewhere, as to what our attitude should be toward the various forms of government within the inter-American system.

Dealing With Governments As They Are

Let me sum up my own views very candidly. First, my own country lives by a democratic system which has preserved its form for nearly two centuries. It has its problems. But we are proud of our system. We are jealous of our liberties. We hope that eventually most, perhaps all, of the world's people will share what we believe to be the blessings of a genuine democracy.

We are aware that most people today in most countries of the world do not share those blessings.

I would be less than honest if I did not express my concern over examples of liberty compromised, of justice denied, or of rights infringed.

Nevertheless, we recognize that enormous, sometimes explosive, forces for change are operating in Latin America. These create instabilities and bring changes in governments. On the diplomatic level, we must deal realistically with governments in the inter-American system as they are. We have, of course--we in this country-a preference for democratic procedures; and we hope that each government will help its own people to move forward toward a better, a fuller, and a freer life.

In this connection, however, I would stress one other point. We cannot have a peaceful community of nations if one nation sponsors armed subversion in another's territory. The ninth meeting of American Foreign Ministers clearly enunciated this principle. The "export" of revolution is an intervention which our system cannot condone; and a nation, like Cuba, which seeks to practice it can hardly expect to share

in the benefits of this community.

And now, finally, a word about what all this can mean-not just for the Americas but for the world.

Today, the world's most fervent hope is for a lasting peace in which life is secure, progress is possible, and freedom can flourish. In each part of the world we can have lasting peace and progress only if the nations directly concerned take the lead themselves in achieving it, and in no part of the world can there be a true partnership if one partner dictates its direction.

I can think of no assembly of nations better suited than ours to point the way in developing such a partnership. A successfully progressing Western Hemisphere, here in this New World, demonstrating in action mutual help and mutual respect, will be an example for the world. Once again, by this example, we will stand for something larger than ourselves.

For three-quarters of a century, many of us have been linked together in the Organization of American States and its predecessors in a joint quest for a better future. Eleven years ago, Operation Pan America was launched as a Brazilian initiative. More recently, we have joined in a noble Alliance for Progress, whose principles still guide us. Now I suggest our goal for the seventies should be a decade of Action for Progress for the Americas.

As we seek to forge a new partnership, we must recognize that we are a community of widely diverse peoples. Our cultures are different. Our perceptions are often different. Our emotional reactions are often different. May it always be that way. What a dull world it would be if we were all alike. Partnership, mutuality-these do not flow naturally. We have to work at them.

Understandably perhaps, a feeling has arisen in many Latin American countries that the United States really "no longer cares."

My answer to that is very simple.

We do care. I care. I have visited most of your countries, as I have said before. I have met most of your leaders. I have talked with your people. I have seen your great needs as well as your great achievements.

And I know this, in my heart as well as in my mind: If peace and freedom are to endure in this world, there is no task more urgent than lifting up the hungry and the helpless and putting flesh on the dreams of those who yearn for a better life.

Today, we in this American community share an historic opportunity.

As we look together down the closing decades of the century, we see tasks that summon the very best that is in us. But those tasks are difficult, precisely because they do mean the difference between despair and fulfillment for most of the 600 million people who will live in Latin America in the year 2000. Those lives are our

challenge. Those lives are our hope. And we could ask no prouder reward than to have our efforts crowned by peace, prosperity, and dignity in the lives of those 600 million human beings in Latin America-and in the United States each so precious, each so unique-our children and our legacy.

Good evening, my fellow Americans: Tonight I want to talk to you on a subject of deep concern to all Americans and to many people in all parts of the world-the war in Viet-Nam.

I believe that one of the reasons for the deep division about Viet-Nam is that many Americans have lost confidence in what their Government has told them about our policy. The American people cannot and should not be asked to support a policy which involves the overriding issues of war and peace unless they know the truth about that policy.

Tonight, therefore, I would like to answer some of the questions that I know are on the minds of many of you listening to me.

How and why did America get involved in Viet-Nam in the first place?

How has this administration changed the policy of the previous administration?

What has really happened in the negotiations in Paris and on the battlefront in Viet-Nam? What choices do we have if we are to end the war?

What are the prospects for peace?

Let me begin by describing the situation I found when I was inaugurated on January 20.

-The war had been going on for 4 years. -31,000 Americans had been killed in action. -The training program for the South Vietnamese was behind schedule.

---540,000 Americans were in Viet-Nam, with no plans to reduce the number.

Made to the Nation on television and radio on Nov. 3 (White House press release).

-No progress had been made at the negotiations in Paris and the United States had not put forth a comprehensive peace proposal.

-The war was causing deep division at home and criticism from many of our friends, as well as our enemies, abroad.

In view of these circumstances there were some who urged that I end the war at once by ordering the immediate withdrawal of all American forces.

From a political standpoint this would have been a popular and easy course to follow. After all, we became involved in the war while my predecessor was in office. I could blame the defeat which would be the result of my action on him and come out as the peacemaker. Some put it to me quite bluntly: This was the only way to avoid allowing Johnson's war to become Nixon's war.

But I had a greater obligation than to think only of the years of my administration and the next election. I had to think of the effect of my decision on the next generation and on the future of peace and freedom in America and in the world.

Let us all understand that the question before us is not whether some Americans are for peace and some Americans are against peace. The question at issue is not whether Johnson's war becomes Nixon's war.

The great question is: How can we win America's peace?

History of U.S. Involvement in Viet-Nam

Let us turn now to the fundamental issue. Why and how did the United States become in

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volved in Viet-Nam in the first place?

Fifteen years ago North Viet-Nam, with the logistical support of Communist China and the Soviet Union, launched a campaign to impose a Communist government on South Viet-Nam by instigating and supporting a revolution.

In response to the request of the Government of South Viet-Nam, President Eisenhower sent economic aid and military equipment to assist the people of South Viet-Nam in their efforts to prevent a Communist takeover. Seven years ago President Kennedy sent 16,000 military personnel to Viet-Nam as combat advisers. Four years ago President Johnson sent American combat forces to South Viet-Nam.

Now, many believe that President Johnson's decision to send American combat forces to South Viet-Nam was wrong. And many others, I among them, have been strongly critical of the way the war has been conducted.

But the question facing us today is: Now that we are in the war, what is the best way to end it?

Consequences of Precipitate Withdrawal

In January I could only conclude that the precipitate withdrawal of American forces from Viet-Nam would be a disaster not only for South Viet-Nam but for the United States and for the cause of peace.

For the South Vietnamese, our precipitate withdrawal would inevitably allow the Communists to repeat the massacres which followed their takeover in the North 15 years before.

-They then murdered more than 50,000 people, and hundreds of thousands more died in slave labor camps.

-We saw a prelude of what would happen in South Viet-Nam when the Communists entered the city of Hue last year. During their brief rule there, there was a bloody reign of terror in which 3,000 civilians were clubbed, shot to death, and buried in mass graves.

-With the sudden collapse of our support, these atrocities of Hue would become the nightmare of the entire nation-and particularly for the million and a half Catholic refugees who fled to South Viet-Nam when the Communists took over in the North.

For the United States, this first defeat in our nation's history would result in a collapse of confidence in American leadership not only in Asia but throughout the world.

Three American Presidents have recognized the great stakes involved in Viet-Nam and understood what had to be done.

In 1963 President Kennedy, with his characteristic eloquence and clarity, said:

... we want to see a stable government there, carrying on a struggle to maintain its national independence.

We believe strongly in that. We are not going to withdraw from that effort. In my opinion, for us to withdraw from that effort would mean a collapse not only of South Viet-Nam, but Southeast Asia. So we are going to stay there.

President Eisenhower and President Johnson expressed the same conclusion during their terms of office.

For the future of peace, precipitate withdrawal would thus be a disaster of immense magnitude.

-A nation cannot remain great if it betrays its allies and lets down its friends.

-Our defeat and humiliation in South VietNam without question would promote recklessness in the councils of those great powers who have not yet abandoned their goals of world conquest.

This would spark violence wherever our commitments help maintain the peace-in the Middle East, in Berlin, eventually even in the Western Hemisphere.

Ultimately, this would cost more lives. It would not bring peace; it would bring more

war.

For these reasons I rejected the recommendation that I should end the war by immediately withdrawing all our forces. I chose instead to change American policy on both the negotiating front and the battlefront.

U.S. Peace Proposals

In order to end a war fought on many fronts, I initiated a pursuit for peace on many fronts. In a television speech on May 14, in a speech before the United Nations, and on a number of other occasions, I set forth our peace proposals in great detail.

-We have offered the complete withdrawal of all outside forces within 1 year.

-We have proposed a cease-fire under international supervision.

-We have offered free elections under international supervision, with the Communists participating in the organization and conduct of the elections as an organized political force. The Saigon Government has pledged to accept the result of the elections.

We have not put forth our proposals on a

take-it-or-leave-it basis. We have indicated that