ON MONDAY, JUNE 18, 1979, Carter and Brezhnev signed SALT II. Carter returned from Vienna and addressed a joint session of Congress to pump for his controversial treaty. Ten days later, he left for the economic summit in Japan. But the pomp and ceremony abroad had little effect on the president's decline in the polls, as he fell one point below Nixon's lowest rating two months before he resigned.

OPEC raised its prices by 15 percent as the summit opened, and automobiles formed longer and longer lines in more and more cities as drivers baked in summer sun waiting for a few gallons of gas.

On July 2, when Carter returned, he decided to address the nation 72 hours later, on July 5. On July 4, from Camp David, he abruptly cancelled the July 5 speech and did not give any reasons. Word of Carter's cancellation reached me only in the newspapers. I was as puzzled as any other citizen.

Remaining at Camp David, Carter met with his staff, mostly political aides. On Friday, a parade of leaders to the mountain began with eight governors. The meetings lasted almost two weeks. On July 15, Carter came down from the mountain to address the nation. The speech propsed major new energy initiatives, but the emphasis was on Carter's self-proclaimed "crisis of the American spirit."

On July 16, Carter echoed his address in Kansas City, Mo., and Detroit, adding more specifics of his new energy program. His approval rating rose 10 points, and I began to wonder whether, despite my misgivings, Carter might be onto something.

But I had little time to think about it because rumors of a Carter hit list -- [Energy Secretary james] Schlesinger, [Treasury Secretary Michael] Blumenthal, and myself -- were mounting.

At 10:30 a.m. the next day Carter held a Cabinet meeting for "principals only," with Hamilton Jordan as the only non-Cabinet member present, sitting in Mondale's chair. Mondale was on the road, pumping for the SALT treaty, trying to get as far away as possible from what was coming.

It was to be the most intense Cabinet meeting of the administration. The president began softly. "I have deliverately excluded most of you from my life for the past couple of weeks." He had "wanted to get away from you and from Washington." He felt an obligation to have "serious private talks about my role as president." His words were pessimistic, his voice somber. It was a close to quiet desperations as I had seen him.

There has been "a lot of effort wasted on misdirections," he said. "My government is not leading the country. The people have lost confidence in me, in the Congress, in themselves, and in this nations." He talked of the "alarming deterioration in attitude of people toward their country." Then a tone of teethgritted determination came into his voice. He had held a host of meetings with all kinds of groups from all across the country. He had asked them about his Cabinet and his staff. The comments about his Cabinet were "serious and condemnatory. I was told, they are not working for you, but for themselves."

He said that he had "repeatedly been told" that there was disloyalty "among some Cabinet members," that many had been the source of leaks that had hurt him. With a studied expression of hurt, Carter allowed that he had given "great loyalty" to his Cabinet and had "great appreciation" for their sacrifice and service.

He paused. "I have decided to change my lifestyle, and my calendar. I have 1 1/2 years left as president, and I don't deserve to be reelected if I can't do a better job. I intend to run for office and I intend to be reelected." To get ready for this effort, personnel changes would be made in the Cabinet and the White House. "I will make the changes over the course of next week." He intended to change the administration's "way of doing business" as well as the "identity of key members of the administration." He complained that "some Cabinet officers do not have support among their constituents."

I thought of my proposals to discipline the Social Security system and the reaction of senior citizens groups; of the National Education Associaiton, whose pressure for a separate education department I had resisted, and of my battles to restrain health care costs.

He spoke about Jordan. "Hamilton will be chief of staff. Ham is not a detail man," but "he will bring in a deputy who will put a management system together and carry it out."

[Secretary of State] Cy Vance said characteristically that the Cabinet would give "complete support to Ham." The president nodded perfunctiorily. He reaffirmed his satisfaction with his own retreat at Camp David, and suggested that the Cabinet members "go off for a weekend of contemplation about where you are going, and ask yourselves how can you do better in supporting the president."

Turning enough to his left to look straight at Blumenthal, he said that it was imperative he have "loyalty from my Cabinet members." Scanning the table, he added, "I want each of you to assess your subordinates, their loyalty to use, whether they are team players, whether they will speak with one voice, whether they are good staff." Then he said that he wanted us all to submit "pro forma resignations." He was evaluating each of us and he would decide whether to accept the resignations or not. He wanted "written resignations from each member of the Cabinet."

Vance immediately opposed the idea, and was supported by Defense Secretary Harold Brown, and then most of the Cabinet. It would be "too much like Nixon in 1972," we said like a Greek chorus.

The president thought for a moment. "You all seem averse to submitting written resignations. We will think about it and then Hamilton will call you this afternoon."

Carter wanted us also to fill out personnel evaluations of each of our key staff members. Hamilton would distribute some "tough forms"" to fill out on each one. He wanted us to review the work of our subordinates, and "get rid of all of those who are incompetent, except minorities and women." No woman or minority member could be fired; their situations were to be discussed with the White House, the president said.

Then the president opened the meeting. Blumenthal spoke briefly about "the difference between arguing for a point of view and disloyalty." Carter hardly listened. [HUD Secretary] Pat Harris said, "We can move government forward by putting phones in the White House staff offices and the staff using them." She complained that her calls were never returned by White House aides. She said it was important to "fight fiercely for our point of view," that it was not "disloyal to disagree with the White House staff, provided one supports the administration when the decision is made."

U.N. Ambassador Andrew Young began to speak, echoing Harris' concern. The president's face reddened. He interrupted Young: "You have repeatedly embarrased the administration. I was told this again and again at Camp David . . . You have caused embarrassment to me by calling Britain the most racist country in history . . . saying Cuban troops in Angola were a stablizing influence . . . saying there are hundreds of political prisoners in the United States."

Usually, Carter was uncomfortable when Cabinet members argued back to him, but now his voice and eyes were so angry that by the time he had ended his attack on Young, he had killed any other meaningful comment. He turned to Jordan.

Jordan admitted that after 2 1/2 years "I have no relationship with many of you." He said the Cabinet had to be "more accountable, better disciplined." The anger faded from Carter's face, and he looked like a proud father as Jordan continued: The White House staff would "work as an organization, not as a democracy. The personnel changes will be made quickly, and the discipline will be imposed immediatedly, including over leaks."

Carter added an admonition to complete the personnel evaluation forms promptly, and he left the room. Jordan distributed the forms -- so amateurish and preposterous that the expressions on several Cabinet members' faces were open-mouthed. I could think only of what a disaster Carter was headed for.

At 3, Jordan placed a conference call to all Cabinet members. The president had decided not to ask for written resignations, but [White House press secretary Jody] Powell would issue a statement that Jordan now read to us: "The president had serious and lengthy discussions with his Cabinet and senior White House staff about the priorities of his administration. He reviewed with them progress of the past few years and the problems that remain. All members of the Cabinet and senior staff have offered their resignations to the president during this period of evaluation. The president will review these offers carefully and expeditiously." Jordan said that Carter would be in touch with us individually.

I was stunned when I put down the phone. From a number of third parties Jordan and Powell had talked to, I knew I was high on their list for firing. But my relationship with Carter had always been good. It was nothing like the intimacy I shared with Johnson, but it was a professional relationship, I had thought, with mutual respect, recognition of each other's interests, strengths and weaknesses, and a sense of trust. I did not think he would accept my resignation.

My son Mark, who was working at The Washington Post as a copy aide for the summer, called late that afternoon. He kidded me, as much to deal with his own concern as allay mine. "Do you still have a job, Dad? We're running a story tomorrow that says you and Mr. Blumenthal and Mr. Schlesinger are going to be fired."

"Whose story?" I asked.

"David Broder and Ed Walsh," he said.

"I may be in trouble, but I have no idea."

I was preparing for my testimony the next morning on the administration's Higher Education Act proposals when the president called me at 5:19 p.m. "Joe, how you doing?" he asked softly.

"Fine, Mr. President," I responded.

"Can you come over here this afternoon?"

"Any time," I said. The president asked me to come right away.

I was prepared for whichever decision Carter reached, although I did not really think he would accept my resignation.

The president was in the Rose Garden, looking up at the trees at some birds. As he came through the French doors, he said, "I think I may have seen one of Cec's peregrine falcons." He was referring to the birds that Interior Secretary Andrus had saved and brought to Washington.

Carter ushered me through the Oval Office into his small study. "I have decided to accept your resignation," he said through a nervous smile.

"Mr. President, you are entitled to have the Cabinet people you want. I will work for an orderly transition." I recited the words I had rehearsed in my mind as the rumors had increased. I was surprised at how nervous my voice was as I spoke them.

"Your performance as secretary has been outstanding," the president said. "You have put that department in better shape than it has ever been in before. You've been the best secretary of HEW. The department has never been better managed."

I thanked him for his generous comments.

"I have never said a bad word about you or your performance and I never will. If anyone does around here, I will fire him."

I just sat, now a little stunned, but instincts told me to be careful, to stay alert. Carter paused, smiling again. Then, as though he could hear the "Why?" in my mind, he explained.

"The problem is the friction with the White House staff. The same qualities and drive and managerial ability that make you such a superb secretary create problems with the White House staff. No one on the staff questions your performance as secretary. Stu [Eizenstat] and Fritz [Mondale] are very high on you. Stu will be particularly disappointed with my decision. But you and some members of the staff -- particularly Ham, Jody and Frank Moore -- have not gotten along."

All I could say was, "It's your decision, Mr. President." His last statement rang true to me.

He asked if I were interested in another job in the government. I told him I was not. "Perhaps a foreign position?" he suggested.

"No," I said.

"Would you like to be ambassador to Italy?" Carter asked.

"No. There is someone else in that job. And he's a good ambassador."

The president persisted. "He's been there 2 1/2 years and he can be moved."

Carter invited me to Camp David for the weekend. I told him I had planned to spend the weekend with my children. "Bring your children along." I said I appreciated the invitation and would think about it. "If you want to, you can go up there alone, and I won't go," he said.

The following morning I handed the president my letter of resignation at about 7:15. It was sealed. I suggested that he open it. Carter opened the letter and read it slowly.

Carter looked up. "It's a beautiful letter," he said. "I will try to write one just as fine."

That afternoon, I held a press conference and on the next day, Griffin Bell, James Schlesinger and Brock Adams resigned. Reporters were now openly questioning Carter's stability, as well as his judgment and competence.

By late afternoon, Carter felt it necessary to read a brief statement to the White House press corps: "I am well pleased with all the changes that have been made. Every single change has been a positive change."

That same afternoon, [HEW press chief] Susie McBee told me that Powell was leaking denials that Carter had every told me I did an outstanding job or was the best HEW secretary. Reporters wanted my comment. I told her to avoid a "who-said-what" contest, but authorized her to say that Carter and I had been alone, that he and I knew what he said, and that I had accurately reported it at my press conference.

The weakness of the White House version was magnified by statement of two congressmen in Saturday morning's papers. Charlie Rangle and Jim Corman, both Carter supporters, revealed that each had called the president earlier in the week to urge him to keep me in the Cabinet. Corman said that Carter called me an "excellent HEW secretary." Rangel added that Carter's praise was so high, "I almost thought the president was going to name him his chief of staff."

As the criticism mounted, Carter held a background news conference on Saturday afternoon, July 21. According to reporters who were present, he questioned the accuracy of my report about his statements at our private meeting, but he refused to go on the record or permit direct quotation. I was shocked and angry as I went to meet with my key staff before going on ABC's "Issues and Answers." I told them that I would try to close the matter with dignity.

My next official contact with Carter was on May 14, 1980. The seal of the new Deaprtment of Health and Human Services was being unveiled. Former HEW secretaries David Mathews, Wilbur Cohen, John Gardner and I were there, along with Agriculture Secretary Bob Bergland, HHS Undersecretary Nathan Stark and Pat Harris, who succeeded me as secretary of HEW. We assembled in a holding room. The president was coming.

All except Harris went to the stage on the ground floor of the Humphrey Building before Carter arrived. I was the last person introduced. The audience clapped and cheered louder and longer than for anyone, including the president when he was later introduced. I was emotionally overwhelmed. I realized how lasting was the bond I felt with these people, whom I had worked with for 30 months. I was touched that they thought I had cared.

The band struck up "Hail to the Chief" and Harris and Carter entered. Along with Gardner and Stark, they were in the front row. The rest of use -- Bergland, Cohen, Mathews and I -- were in the back row. Carter walked across the front row, shaking hands with Stark and Gardner. He ignored the back row. When he looked back as the new seal behind us was unveiled, he avoided my eyes, though I looked straight at him. Carter spoke. He used phrases I had put into the HEW lexicon. He cited programs that I had put together. Then he finished. He jumped off the front of the elevated platform, ignoring those of us in the back, shook hands with two handicapped HEW employes and walked out.

The next day I received this handwritten note in the mail: 5-14-80 To Joe Califano

I really appreciated your being at the ceremony this morning. You did an outstanding job as secretary. On occasion, I would like to call on you to help me again. Best wishes, Jimmy Carter.

P.S. The C David invitation stands.

I loved being secretary of HEW, and I worked at the job with all the energy I could muster. I felt the frustration, sometimes anger, of failure: in welfare reform, national health and the difficulty of erasing racial discrimination. I experienced the aching exhaustion that follows the loss by a single vote of a major program like hospital cost containment, and the special pain that comes from not convincing a persident how important a center for fetal and child health is, or not persuading a congressional committee of the desperate plight of millions of poor children without health care and the benefit of all of us if we provide it.

But there was an exhilaration that came from the ability do so much for so many, however limited it might seem at any given moment, and an adrenalin that came from getting each step closer to passing a bill, integrating a school district, launching an alcoholabuse program, understanding the teen-age pregnancy problem, moving an unsafe drug off the market or releasing a new miracle drug to the public promptly. There was never enough time to savor success or lick the wounds of failure. There was always another problem to face, another opportunity to grasp. And it was always worth trying because it could be done better the next time and the rewards of success could be so great.