 Good afternoon, ladies and gentlemen. I have two statements I would like to make this afternoon, after which I'd be very happy along with Mr. Vance to try to answer your question. Bill will be copied to the LBG. Yes, yes, it will be. First, on Thursday and Friday of this week, I shall be meeting here in Washington with the defense ministers of Canada, Germany, Italy, the Netherlands, Turkey and the United Kingdom, along with the Secretary General of the North Atlantic Treaty Organization. These ministers comprise the new NATO nuclear planning group, which together with the Nuclear Defense Affairs Committee was established as a permanent body of NATO by the Council of Ministers meeting in Paris last December. This body is to advise NATO on matters of nuclear policy. I'm especially pleased to be host to this meeting. It represents, I think, a significant new approach and an achievement after more than a decade of persistent endeavor by many representatives of this government and many nations of NATO. Bring all members of the Alliance into full partnership in the planning of nuclear strategy and nuclear affairs. It is, I think, a milestone in the history of NATO. The personal participation of the seven defense ministers reflects the intimate involvement of nationally responsible government leaders in NATO planning activities. Such active participation by top defense authorities is both new and also essential, I think, to assure realism in our work and the vigorous support of the member governments in carrying out NATO's plans. It is, I think, largely responsible for the very great progress that we've made in the past two years in the field of nuclear planning. As you know, the foundation of the security of the Alliance is nuclear power. And it's only natural, therefore, that the non-nuclear members of NATO have always felt a need to be informed about nuclear matters and nuclear planning, and particularly to participate in nuclear planning. They've been uncertain of their role in this field. They've felt that the organization's structure of NATO and particularly the behavior of the United States did not take proper account of that role. They believed, and I think rightly so, that they should have had a greater voice in assessing the nuclear threat to the Alliance, determining what forces were required to meet them and in working out how and under what conditions those nuclear forces would be employed. For more than 10 years, the NATO nations, including the United States, have struggled with this problem. A number of suggestions have been made as to how to solve it. I've listed eight. I won't go into them now, but I'll be happy to answer questions on them later. It's only been in the last year and a half, however, that substantial progress in Spanish-speaking countries and substantial progress in expanding the role of the non-nuclear powers in nuclear affairs has been accomplished. The meeting this week stems from a proposal by the United States government in June of 1965 made to a meeting of the NATO defense ministers at that time. The proposal provided for consultation by a small group of defense ministers about the problems of nuclear planning. That group was set up. It met first in Paris in November of 1965. It met four times last year, once in Washington, once in London, once in Paris, and once in Rome. The five defense ministers acting as members of that group were viewed and discussed the strategic and tactical nuclear resources of the alliance, potential circumstances, and consequences of the use of nuclear weapons, and the way in which the alliance should organize to carry on future discussions of these subjects. These, I think, were by far the most substantive and the most far-reaching discussions of nuclear affairs in the history of the alliance. One of my colleagues stated just last month that there had been more progress in NATO nuclear matters in the past 12 months than in the preceding 17 years. In any event, this working group of five defense ministers recommended that a permanent organization be created to carry on this work. And the Nuclear Affairs Committee opened to all NATO members that the nuclear planning group were established by the foreign and defense ministers of NATO last December in Paris. At this week's meeting, the nuclear planning group will continue to examine NATO nuclear strength in all of its aspects, including the plans for the development of nuclear weapons, for the production of nuclear weapons, for the possible use of nuclear weapons, and for the analysis of the consequences of such use. In addition, we shall discuss the recent steps taken by the Soviet Union to deploy an antibiotic missile system as well as the status of the antibiotic missile program of our own country. And we shall also discuss the effort being made by this country to persuade the Soviet Union to join with us in holding down the spiral of a ruthless arms race. And that, of course, is perhaps the most important subject on the agenda. And I'll be very brief in summarizing for you another matter. I want to report today on the completion on the target date set one year ago of the massive relocation of U.S. armed forces to France. That relocation, which, as you will recall, was prompted by a desire of the French government will result in millions of dollars in the economy for our forces in Europe without significantly degrading combat effectiveness. This relocation began in April of 1966, just a year ago. At that time, there were in France 32,000 U.S. military and civilian personnel, about 38,000 of their dependents, and 15,000 French nationals employed by the Department of Defense, a total of some 85,000 personnel associated with U.S. defense activities. They were assigned to over 186 installations. Additionally, we leased about 250 installations and sites for our activities. The total cost for these physical facilities was huge, about $850 million. And when the relocation began, there were over 820,000 tons of material that we were using or had stored in France, material which had a value of about $1,200 million. Initially, it was estimated that the relocation of these men in facilities would cost over $1 billion. We've been able to do the job for less than $150 million. Of that $150 million, only $50 million will be paid out in foreign exchange. We now estimate that it will actually be budgetary savings of perhaps $50 million a year resulting from this program and foreign exchange savings in excess of $100 million per year. Perhaps between $110 million and $120 million. Of course, these major economies would mean very little to us if the relocation had significantly or adversely affected our military strength and capability, but such is not the case. Combat effectiveness and fulfillment of NATO commitments we believe has and will be maintained. In some instances, because of changes in the logistics net and warehousing facilities, there will actually be modernization gains. And in addition, headquarters organizations have been streamlined. As a result, the relocation has permitted us to save about 16,000 of the military personnel formerly located in France and about 2,000 of those located in Germany, a reduction of about 18,000 in military personnel. The dependence of those personnel will be moved out of Europe, total 19,000 from France and 2,000 from Germany. So there's 18,000 military personnel plus about 21,000 dependents that will be saved. Total of 39,000 U.S. personnel moving from Europe to the U.S. In addition, in contrast to the 15,000 French nationals formerly employed by the Department of Defense in France where our activities will require only 4,000 European nations. So there will be a saving of about 11,000 European nations. Total of 50,000 people, therefore, will be associated from U.S. defense activities in Europe. Because we wish to ease the personal hardships as much as possible, arrangements were made for about 6,000 U.S. personnel, a large number of them, either students or those associated with dependent schools serving those students to remain in France with the approval of that government till the end of this month. I should say till the end of June. We've moved more than 380,000 tons of the material we had in France to Germany. More than 145,000 tons to the U.K. About 90,000 tons have been returned to this country because they were accessed to our requirements in Europe. We've either consumed or disposed of another 170,000 tons of excess material. And there's now less than 10,000 of the former 820,000 tons of U.S. material in France. Both of this 10,000 tons is connected with the dependent school. So for all practical purposes, the relocation has been completed. I think it's been a magnificent job. Great credit to the officers and men of our European forces who participated in it, directed that. We think the job has been done and done expeditiously and effectively. And now, Mr. France and I, I'd be very happy to try to answer your questions. Mr. Secretary, there is a letter of service story today that says the Defense Department has started to study the profits of the defense industry that actually would be a problem more. No, there's no substance to that whatsoever. About five or six years ago, we began a study of the profits of the defense industry, which we're continuing to carry on in order to relate profits to performance. Initially, it became very clear that because of the heavy emphasis on cost plus type contracts in prior years, there was very little variation in profit rates by contractors. We are seeking to change that. As you know, the cost plus type contract doubled about 19% of total defense awards in 1956 to about 38% in 1961. We cut that back to about 10%. As we did so, we sought to give the defense contractors greater incentive before more efficiently. This meant that we tried to change the profit rates by type of contracts so that those contracts which carried with them greater risk would also carry with them greater profit potential. In order to do this, in order to make these studies, in order to monitor our performance, we, of course, needed more information on defense contracts and profits. We're continuing to seek that, solicit it, and I suspect that it's those requests which have led to the comments of the current practice. The savings you mentioned would be moved out of France. How are they realized? Let me tell you first the combat or operation units we had in France. They were limited to two air transport squadrons which had been moved to the United Kingdom. Three reconnaissance squadrons also moved to the United Kingdom. Two reconnaissance squadrons moved back to the United States with dual bases, bases in the U.S. and also bases forward in Western Europe which they will move periodically for exercises during the year. And one reconnaissance squadron in France on temporary duty during a transition from one type of aircraft to another which had been permanently back to the United States. This movement of air squadrons permitted a very substantial reduction in the number of Air Force personnel associated with our activities in France without any significant change in the effectiveness of our air capability. In the case of the Army, there were no operational units what I would call operational units in France rather that it was staff with personnel designed to support our line of communication through France. We've been able to move that line of communication to the Low Countries and to Western Germany. Now true, it's more vulnerable. It's more exposed in the Low Countries than it would have been in France. But since the strategy of NATO is a strategy of forward defense this slight increase in the vulnerability or exposure of that line of communication we believe does not significantly weaken NATO. It does result in a very substantial saving because the line is shorter and it's more efficiently located in relation to rail and road nets than was the line of communication in France. This has led to a very substantial reduction in the number of personnel necessary to maintain and man that line of communication. Yes. Before the Senate answers this committee about two months ago at the end of January there are a couple of things you've talked about in relation to the Soviet anti-polisic missile system. One of the things you said was that the systems deployed around Moscow were not at that time operational and another thing you weren't too sure about whether the Second Edition was really an ABM in fact I think you said that the trend was away from suspecting it was an ABM. Can you answer now whether in the last 60 days do you have any information of the system around Moscow as operational? I don't wish to add to what I said at that time other than to perhaps clarify a point that may have been confused. I've noticed in the press the number of statements indicating that there was controversy inside the Department of Defense whether the Second System was an anti-polisic missile system was or was not an anti-polisic missile system. Frankly I don't think it makes very much difference what the evidence indicates at the present time because I believe we must assume for our planning purposes that if that Second System is not an anti-polisic missile system that the Soviets may at some time in the future deploy an anti-polisic missile system to protect those forces in their country outside the Moscow area. This is essentially the same statement I made to you a year ago and two years ago I think when you questioned me then about intelligence information on Soviet anti-polisic missile deployments I said that I wasn't going to comment upon intelligence data but I would tell you that we must assume finding our future offensive forces that the Soviets would deploy a country-wide anti-polisic missile system that I attended to say in January and I may not have said it earlier. Yeah. Secretary, the Russians have tried to tie together the ABM issue with the offensive as far as discussions on the ABM freeze or whatever you might call it. Do you as Secretary of Defense consider it conceivable that we would be able to negotiate on our offensive missile force as part of the attempt to get the forego of the ABM? I don't wish to speculate on what conclusions might come out of negotiations with the Soviet Union on the subject of nuclear forces. There has been some indication they would wish to discuss both offensive and defensive forces and we're certainly willing for discussion purposes to include both on the agenda. This meeting that you're going to have with the NATO official sounds very good but have you actually concerned with the legal to give away this information to these non-usual employees? We as you imply operate under legislative restrictions what kind of information we can expose to foreign nationals and we're hearing very strictly to those legislative restrictions in all our discussions with the NATO. Mr. Secretary, as I would say to the scholarly that you said that the NATO relocation meant that it would not be grading the combat effectiveness of our forces. Yes, that's correct. Why didn't we do it a long time ago? I think that's a good question. I think that's a good question. I've asked myself that as a matter of fact and I think the answer is that conditions have changed significantly since the French base structure was established. For example, our aircraft along the French aircraft. The aircraft we moved to transport aircraft were not the aircraft in which the transport bases were established in France. The transport bases were established for C-119 aircraft which are very short range aircraft. The aircraft that we now have deployed in western Europe particularly those that we moved from France to the UK or C-130 aircraft. Similarly, the aircraft for which the bases were established for reconnaissance purposes in France were short range aircraft. Those we moved to the United Kingdom were long range reconnaissance aircraft. F-4 is having replaced RF-101s which in turn had replaced a still shorter range aircraft earlier. But having said all of that I do want to emphasize that conditions today are much different than those years ago when those bases were established. Having said all that, I don't want to imply that there isn't any penalty associated with moving our lines of communication out of France. It's not a significant penalty. It doesn't, in a major way degrade the combat effectiveness but it is a penalty. It shortens the line of communication but it results in a more vulnerable line of communication. Let's make this a paper question. Yes. If our allies are going to participate now in nuclear policy I was wondering why there are 7 rather than 15. I think that the members of NATO realize what we have learned in trying to carry out these discussions that these subjects require the most intimate participation by the defense ministries themselves and we have simply found it impossible to do that with 14 or 15 members present plus their staff so that it has been agreed after a year and a half or two of experimentation that we should start with a small group of nations and this group of 7 nations should report back periodically once every six or 12 months to the larger group at any time the larger group has the prerogative of asking if a small group expands. The whole purpose of the meeting is to expose the non-nuclear nations more fully and more intimately to the entire spectrum of nuclear activity starting with the analysis of the threat of the development programs necessary to assure weapons will be developed to meet that threat effectively the determination of the size of the force structure the strategy to provide for the use of that structure and tactical and operational plans contemplating such use. Yes. Will these discussions include possible use of nuclear weapons in areas other than in NATO? The discussion will be limited to let me take one over here. Mr. Secretary, have the talks with the UK and Germany reached a point where you now say that the U.S. will be able to keep the presence of divisions in Europe? I don't want to comment upon the trilateral talks. These are the discussions with the United Kingdom and the Federal Republic relating to force requirements and certain associated financial problems. These trilateral discussions are still underway. They haven't been concluded and any tentative conclusions of those trilateral discussions must later be discussed with NATO, with the full membership of NATO before final decisions are made by any of the members of NATO and that includes the United States and certainly the United States. Does your statement that we have a forward strategy without an offensive tip to France from the planning now being an earlier use of nuclear weapons then was the case at some prior time? No, I think not. I think what it emphasizes is that the deployment of troops and tactical plans are associated with a defensive territory of Western Europe far forward. Eastern boundaries is not kind of played a withdrawal or giving up a territory in a movement to a defensive depth, such as during World War II. I don't believe that the future conflict would evolve as did World War II in a world in which each side possesses large numbers of nuclear weapons and conceivables to me that there would be such a contract. I think I've mentioned to you before the stockpile of nuclear weapons in Western Europe provided for the use of NATO has doubled in the last six years and now in the order of 7,000 weapons. It's inconceivable to me that you would have a long extended three or four year conflict under those circumstances. Yes. Yes, this is a very serious problem. It's one that Mr. Vance and I are both concerned with. He in particular has been working on it. I'd like to This is a very serious and difficult question. We are at the present time giving intensive study to the problem in 13 selected areas on the basis of this intensive work which is going forward we hope that we will be able to move forward more rapidly eliminating this discrimination. It's a problem with which we are seized and with which we much make progress. Mr. McNamara and I are devoting a great deal of time to this along with Secretary Morris and hope that we can come forward with some constructive action in the not too distant future. Do you have a report, sir? I have no deadline at this point. 13 areas? Yes, I don't have them on hand but I'd be happy to make that file. Mr. Secretary, Senator Simon is saying that our failure to bomb the Northgate airfield is costing us hundreds of planes of air. Is our decision not to bomb them based on military reasons or diplomatic reasons? It's based on our desire to avoid widening the war. To seek to obtain our political objective which is a very limited objective the smallest possible cost in American life. We think the present tactics are best suited to those two objectives. As you know, we have lost about 500 aircraft attacking the lines of communication of other targets in North Vietnam. Of that 500 something on the order of 40 have been lost to surface-to-air missile attacks. Today, there have been over 1900 such attacks. In the past roughly a year and a half or a year and eight months. It's only a small percentage of the losses have been lost from this. Part of this accounts for the fact that only a small percentage of our sorties are directed against surface-to-air missile sites. Only a small percentage of the total 500 aircraft have been lost to mega-tacks. I believe it's on the order of 10 U.S. aircraft that have been lost to mega-tacks compared to roughly 40 mega-aircraft that have been shot down in air battles with mega-tacks. We think that at least under present circumstances and this belief can change as time goes by, but we think that at least under present circumstances the loss in U.S. lives will be less if we pursue our present target policies than they would be where we would attack those aircraft. It's always a balancing of gains and losses in terms of U.S. lives and U.S. political objectives. The administration of the groups in France said that Senator Greening recently came out with a report that he was familiar with saying that our government lost one billion dollars with this relocation and one billion dollars loss with air forts and hospitals. He said the fault is that we had not negotiated with France and then he said that by saying that this will happen that deriving his conclusion from the fact that the value of U.S.-occupied bases and facilities in France approximated $850 million, a great close to his billion. The portion of that, by the way, had been financed by NATO infrastructure payments, and in a sense, was a multilaterally financed facility. But it is true that we did occupy facilities in France, costing about $850 million. And that no financial settlement relating to those facilities has yet to be made. But negotiations are underway both by the United States and other members of NATO, with France seeking such a financial solution. And I can't predict now either when they will be concluded or what the conclusion will be following the determination of the negotiations. Let me take a question here. Could you tell us when we might expect the release of the status report on the ammunition from the Home Security Regime? I believe that the staff of the committee and members of the department are still discussing the issues. I know there was a meeting last Friday on it, and I don't think either the staff or the committee are working in the department and completed on that date. So I can only tell you that work is proceeding but hasn't been completed. One from last year, sir. Thank you. All right. That's a good time. The answer to your question is I don't know. I don't think that the report is going. I'll get one clarification.