THE PRESIDENT: Thank you very much.

As some of you know, this is my first press conference since I became President 2 1/2 weeks ago. My intention is to have press conferences like this twice a month and I look forward to those confrontations with the press to kind of balance out the nice and pleasant things that come to me as President.

I am eager to answer your questions. I don't have any earth-shaking announcement to make this afternoon. I want to spend a maximum amount of time each press conference to answer your questions.

So, Mr. Cormier?

Q: Mr. President, you cited arms reductions as the prime tenet, one of them, of your foreign policy. Under the circumstances, as the first step will you block the sale of concussion bombs to a foreign country?

A: The sale of concussion bombs to a foreign country is an item that concerns me very much. Within the next week, after this review that has already been undertaken is completed, I will have an announcement to make about that. The previous announcement that concussion bombs would be sold was not cleared with the State Department nor with the Defense Department. I have asked them to analyze the political and military consequences of the sale. I am concerned about it but have not yet decided whether to cancel that sale.

Q: Does that mean, sir, that you were considering blocking the sale?

A: That is one of the options I have and I will make a decision within the next week.

Q: Mr. President, could you give us your general attitude towards vetoes, which were quite popular with your predecessor, and more specifically might you consider vetoing an economic stimulus package if it came to you in a form significantly different than you had proposed?

A: I, of course, reserve the constitutional right to veto legislation that I think is contrary to the best interests of our country. But I think the best way to avoid vetoes is to work intimately with the Congress in the initial stages of the development of legislation.

My own economic stimulus package, which was presented to the Congress, was very carefully worked out, is wellbalanced, is well-considered. It is a steady predictable, aspect of it; it is equally balanced between 1977 fiscal year and 1978. It is fair, I think it is adequate. It also was discussed thoroughly, both those who were elected and those committee chairman who were responsible for economics before it was ever ennounced publicly and before it was introduced.

If such drasic changes were made in it that would caused me to doubt its effectiveness or its visibility, I would of course veto it. But my sense of the Congress' attitude is that although some amendments might very well be appended to it, that I can accept the congressional changes. But I will reserve the right, of course to veto legislation when necessary.

I might say that in every instance in the preparation of a package of reform that will set up a new energy department, which would be available to the Congress by the first of March, and major energy policy legislation which will be completed, the study of it, by April 20, and the evolution of welfare reform which will be completed by May 1, and so forth, I am working very carefully, very closely with the Congress, which is a department I think from the experience under the Republican administration with the Democratic Congress.

So vetoes were necessary, yes. The number of vetoes in prospect would be very small.

Q: Mr. President, your nominee to head the Arms Control and Disarmament Agency, Paul Warnke, wrote about a year and a half ago that the United States "should try a policy of restraint while calling for matching restraint from the Soviet Union," but Mr. Warnke didn't seem to believe that had to be guaranteed in advance in an agreement. Is that a view to which you subscribe and can you explain why or why not?

A: I know Mr. Warnke very well. I have met with him several times to discuss his attitude on disarmament matters. I have complete confidence in him. The first two times I asked him to take the job, he turned me down. We tried to find an alternative who is as well qualified as he is that would express my views and those views acceptable to my country. I was unsuccessful in equaling him. He finally agreed to take the job, at my insistence, as a public service.

I believe his views are well considered by me. I have accepted them. I think when the members of the senate consider what Mr. Warnke stands for, he will be approved overwhelmingly, I obviously believe that we both have to take initiatives, both the Soviet Union and the United States. Most of our discussions will be bilateral in nature. Subsequently I hope to bring in other nations to discuss, for instance, comprehensive test ban questions and other, the European nations who are nuclear powers and also the Chinese. That would come later.

But I believe that Mr. Warnke's proposals are sound. I have no concern about his attitude. There will be instances on nuclear weapons where each country has to take some initiative. But the overall balance of mutual restraint, cutting down on the overall dependence on nuclear weapons, is what counts.

I might add one other point. Mr. Warnke's position will be carefully coordinated with my own, working closely with the State Department, Defense Department officials. Our decisions with the Soviets will be made public. We will consult with our allies whenever possible. Any ratification of an agreement with the Soviet Union will obviously require senatorial approval. Even if I or Mr. Warnke or some other person in the negotiation process should make a mistake inadvertently, that mistake would be closely scrutinized by the public, but I have complete confidence in him.

Q: Mr. President, have you plugged all the holes, so there won't be another Watergate or an executive branch scandal, or do you intend to do something more to raise the standard of conduct?

A: I think that all of the country has learned a great lesson from Watergate: to have a maximum amount of openness, to have much stricter standards of conduct required by a public official, those appointed and those elected, to scrutinize very closely the appointment procedures so that if someone does have a concealed conflict of interest financially, it might be revealed.

I think the new election laws have brought us through the 1976 prediential elections and others with a minimum of obligation on my part to anyone. I was elected not ever having promised anyone he would be appointed to a major position.

I think all of these concersn that were vivid during the Watergate months have now been pretty well ratified on the people's minds. Therefore, I believe we don't have any danger in the recurrence of Watergate.

I know I will be cautious as President to avoid any legitimate semblance of dishonesty or concealing any information the public has a right to know. I know the Congress and others will be watching me closely, which I welcome.

Q. Mr. President, just to follow up a bit on Stan's question, could you tell us, sir, do you believe that there should be a rough parity between the nuclear forces of the Soviet Union and the United States? Do you think we ought to, in the arms negotiations, strive for superior force or do you believe that as long as we have the ability to inflict horrendous damage on them that "it really doesn't matter which side has the most bombs?

A: At the present time, my judgment is that we have superior nuclear capability. The Soviet Union has more throw weight, larger missiles, larger warheads. We have more missiles, a much higher degree of accuracy, and also, we have three different mechanisms which are each independently adequate to deliver atomic weapons, airplanes, submarines, and intercontinental ballistic missiles.I think we are superior, in that either the Soviet Union or we could destroy a major part of the other nation if a major attack was made - with losses in the neighborhood of 50 to 100 million people if a large exchange was initiated.

We have the capability, as do the Soviets, to detect the launching of opposing missiles and then I, as President, and the leaders in Russia would have to be faced with the question of how much of a retaliatory attack to make. But in the exchange tens of millions of people would be killed and the threat of this kind of holocaust is what makes it important that we do keep an adequate deterrent capability, and it also is crucial for all of us to remember that it is necessary to have drastic reduction in dependence on atomic weapons.

In almost every major speech that I have made since I have been involved in national politics, I expressly committed, first to stablize the situation; secondly, to have demonstrable reduction in dependence on atomic weapons and set as our committed long-range goal complete elimination of nuclear weapons from the earth.

I had a meeting this morning with a representative of the People's Republic of China and he told me very clearly that the goal of the Chinese government was to reduce dependence on nuclear weapons to zero.

If we and the Soviet Union can demonstrate an ability to stop the present growth and then to have substantial reductions, I believe, then, we can go to the French, British, the Chinese and others and say, "Would you join us in stopping testing and in moving in clearly monitorable ways to reduce dependence on atomic weapons?"

Q: Mr. President, to follow that up, a little bit earlier, if I understood you correctly, you said that you thought that each of the two countries, us and the Soviets, might have to take some initiatives. I am trying to translate that into some other problems we face. Is the United States today prepared to take the initiative perhaps in restraining the development of the cruise missile in order to get something going in the SALT talks?

A: I wouldn't want to single out one particular weapon which is still in the development stage, but I will give you a couple of examples that are symbolic in nature, not too profound. One is that I suggested to the Soviet Union that they let us know and that we let them know before we launch any kind of intercontinental ballistic missile in a test phase. We launch our missiles from Vanderberg Air Force Base. We don't launch them from the standard silos. The Soviet Union does launch missiles from this standard operating silos for these purposes. I think a prior notice that this launch was going to take place 24 hours or 48 hours would help a great deal.

I have called on the Soviet Union to join us in a comprehensive test ban to stop all nuclear testing for at least an extended period of time, two years, three years, four years. The Soviets are interested in using nuclear explosives to divert the course of a river in need to test any more. If they want to put that as a proviso in the agreement, that they would like to go ahead and divert that river, I think that would be something we could negotiate and let us have observers ther to learn from them and vice versa. But I think that the initiation of proposals that might be mutually acceptable of this kind is very, very important.

We have two unresolved questions derived from the Vladivostok agreement called SALT II, and that is the cruise missile and the Backfire bomber. I would be willing to go ahead with the Soviet Union, conclude a quick agreement, if they think it advisable, and omit the Backfire bomber and the cruise missile from the negotiations at this stage. And then in the SALT III talks, if necessary, put those two items back in for further discussion.

But I think it is important for us without any pressure on me, not to proceed too hastily, in a very careful and methodical way to demonstrate to the world that we are sincere.

Q: I am sorry to pursue the subject but I am. When Mr. Warnke wrote that, he was apparently talking about weapons systems as well as nuclear warheads. He was talking about perhaps restraining the development of a particular weapons system, hoping for reciprocity by the Soviets.

My question is, would you consider saying to the Soviets, say the B-1 or any other weapons system, we are not going to develop it for six months, we want to see something from you in the way of reciprocity?

A: Again, let me avoid reference to a particular weapons system on our side. Let me refer to a weapons system on their side.The Soviets have a missile with limited range, it is not intercontinental in nature, called the SS-20. They have begun to install those missiles in mobile installations where they can move them in a concealed way from one part of an area to another. It makes it very difficult to pinpoint their exact location.

I would like to see the Soviets cease development of the mobile missile, even though it is not of the intercontinental type. It is very difficult to distinguish it from the intercontinental missile called the SS-16. If they would agree to a cessation of the use or deployment of the mobile type missiles which could be moved around in different locations before launch, that would be a very important point for us to join them in a mutual agreement. It would mean we would not then perhaps spend the large amounts of money to develop a mobile missile. But if the Soviets should move to a development of that to be moved from one place to another undetected, then that would put a great pressure on us to develop a mobile missile of our own.

I think on both sides there has to be some initiation. But as individual weapons systems are restrained, using initiative, you have got to be sure that the overall balance of deterrent is not disturbed.

Q: Mr. President, the first distributing of emergency public works funds left approximately 23,000 communities, rather 20,000-odd communities, with approximately $22 billion in requests unfulfilled. Your administration has proposed $2 billion additional next year and $2 billion the next. Isn't that going to leave a long trail of disappointed communities in the country?

A: Yes. However, I think it is part of a comprehensive package of two-year duration that is well-balanced. There is a hint on how much money you can spend on public works without wasting money.

We are asking, through Secretary of Commerce Juanita Kreps, for the Congress to change their allocation formula so we can orient the available public works money much more accurately where the unemployment rate is highest and where the need is greatest.

Q: Mr. President, do you agree with the procedure under which Congress will get a 29 per cent pay increase next week along with other top federal officials? The question is the procedure. And secondary, do you think this increase is warranted aside from the procedure?

A: President Ford called me before I was inauguarated, to ask if I would join him in support of the pay increase that was recommended by the so-called blue ribbon panel. There had not been a pay increase for public officials, judges and the senior grade executive officers, I think, in eight years. In many instances, it was greatly disproportionate. I told him I would agree to join in support of the pay increase provided he maintained his support along with me for the strict ethics requirement that was also recommended by the blue ribbon study commission. I have received assurance from both the Majority Leader and the Speaker of the House - the Majority Leader of the Senate and the Speaker of the House - that they would push hard for and pass if possible strict ethics legislation.

I think that the pay increase is justified. In most instance, (I haven't studied the details of it), and if tied to a comprehensive ethics bill to put restraint on outside earings and perhaps conflict on interest, I think it would be good overall for our country.

Q: Mr. President, two the massive dislocations followed the natural gas crisis, the factory closings, the school closings, the threat of homes going without natural gas. I would like to ask you, who do you think philosophically owns America's energy resources? Is it the private oil companies that extract these from the grounds or is is the American people? What are your views on nationalization of the oil industry.

A: I am against nationalization of the oil industry. To answer the last part first, it is obvious that many of our oil and natural gas resources plus major sources of our coal resources, particularly in the West, are derived from public owned lands, both onshore deposits and the outer continental shelf. Those oil and natural gas coal resources are made available to private firms on a competitive bid basis to explore and then to extract and distribute.

I think this is the best approach to be maintained. I think nationalization of the oil and natural gas business would not be advisable. At the same time, recognizing that the public must be protected, there is a strict regulation of oil and natural gas prices. We will have available for public scrutiny and for congressional action by April 20, a comprehensive, long-range energy policy. I have asked Dr. James Schlesinger, a well-qualified person, strong, able, intelligent, and I think a very dedicated man, to lead the evolution of the energy policy itself.

Our country has not had such a policy to guide it, to guide Presidents, Member of Congress, the public, oil companies, consumers in what might be expected in the future. I believe when this policy is made public, it will obviously engender a great deal of debate. It is going to require substantial sacrifices on the part of the American people. I am going to try to make sure that all the natural gas companies and others that produce don't derive unwarranted profits when we cut back on consumption and when we encourage production.

This past two months we have imported over half of the total amount of oil that we have used, 10 million barrels a day on the average. This has got to stop. We don't have adequate reserve supplies of oil stored to meet our needs if we have another embargo or some other very serious problem in the future.

So the oil, natural gas, coal, atomic power, conservation question has not been addressed. This is a campaign commitment that I made for two years. My campaign commitment as far as developing a policy will be completed by April 20. But I will try to make sure it is fair and comprehensive. If it is not fair, if it not comprehensive, the American public will not accept it, the Congress will not, and I will fail. I don't intend to fail in this.

Q: Mr. President, House Speaker O'Neill claimed yesterday that some of your top advisers seem to have an attitude of confrontation regarding Congress, and this is only the latest of several compaints from the Democratic leadership that you haven't consulted with them enough.

Looking back on it, do you feel that they are overreacting or do you feel that you have given them cause for some of their complaints?

A: We have given them cause for some of the complaints inadvertently. We have made some mistakes. I have learned in my first 2 1/2 weeks why Abraham Lincoln and some of the other Presidents almost went home when they first go to the White House. The handling of personnel appointments trying to get the right person in the right position at the right time, is a very, very difficult question. We have not been adequately careful in the initial days in dealing with the Congress.

It is hard for me to decide which person to appoint, to have an FBI check, an Internal Revenue Service chick, to have the press constantly trying to get the name before anybody else knows it, to have a congressman find out by reading it in the newspaper. We have really tried to deal fairly with the members of Congress, but we have not been always successful. But I have initiated now, as you know, a constant series of meetings with the Congress Members almost every day and every two weeks I have a breakfast with the Democratic leadership and we have a thorough discussion of our differences and I believe that we have made a great deal of progress in correcting those early mistakes.

Q: Sir, you have a man working on energy, Douglas G. Robinson. He was former, I think, deputy general counsel of FEA. He works with Dr. Schlesinger and Dr. O'Leary. Congressman Johh Moss sent you some information he had uncovered in Congress about the transgressions of this man and not enforcing pricing and protective regulations against oil, gas and utilities people.

Are you keeping him on knowingly or you just don't know about him?

A: I didn't know about it. But I will check on it after this press conference.

Q: Mr. President, regarding your relations with Congress, Rep. Shurley Chisholm, as you know, is the elected Secretary of the House Democratic Caucuw but she has not been included in your regular Tuesday morning breakfast meetings with the leaders, although her counterpart in the Senate, Daniel Inouye, has been included and participates in those meetings.

My question is, Mr. President: In view of the fact that Rep. Chisholm is the first black and the first woman who hold s leadership post and in view of our oft-repeated commitments to those groups, do you plan to do anything to wipe out this inequity?

A: Let me say that the attendance at those Tuesday morning breakfasts is not decided by me. I ask the Speaker of the House of Representatives and the Democratic Majority Leader in the Senate to decide which members of the two houses come to have breakfast with me.

I also tell them about the major subject for discussion. This morning, for instance, it was on reorganization. Chairman Ribicoff in the Senate and Chairman Jack Brooks in the House attended the meeting because of that reason. I don't want to get in the position of inviting specific members of the Congress to come, but I am sure if you addressed your question to Speaker O'Neill, he would be glad to give you an answer on it. Let me say one other thing about that: As far as the executive branch of government is concerned, I have really tried hard to bring into the government additional numbers of women and of minority groups.

I asked Hamilton Jordan, just before I came over here, for a summary of what we have done so far.

We have only appointed now about two-thirds of the subcabinet members in the major departments, but in those major departments headed by Cabinet secretaries we have tripled, more than tripled, the number of women involved. I think in the last administration we had eight women. We now have 29 and the number is growing.

We have doubled the number of black Americans who serve in those major positions from eight to 16, and we have tripled the number of Spanish-speaking Americans.

It would quess that this percentage, two or three times more than has been involved in the past, will grow as additional appointments are made.

Q: Mr. President, there have been a series of actions taken recently by the Soviet Union including the explusion of American journalists and the arrests of Alexander Ginsburg, actions that we have taken issue with in one form or another. How concerned are you that by being outspoken on issues of human rights we may jeopardize possibly our relations with the Soviet Union on other matters?

A: This brings up the question that is referred to as linkage. I think we come out better in dealing with the Soviet Union if I am consistently and completely dedicated to the enhancement of human rights, not only as it deals with the Soviet Union, but all other countries. I think this can legitimately be severed from our inclination to work with the Soviet Union, for instance, in reducing dependence upon atomic weapons and also seeking mutually balanced force reductions in Europe.

I don't want the two to be tied together. I think the previous administration, under Secretary Kissinger, thought there ought to be linkage and if you mentioned human rights or if you failed to invite Mr. Solzhenitsyn to the White House that you might endanger the progress of the SALT talks.

I don't feel that way. I think it ought to be clear and I have made clearly directly in communication to Mr. Brezhnev and in my meeting with Ambassador Dobrynin that I was reserving the right to speak out strong and forcefully whenever human rights are threatened, not every instance, but when I think it is advisable. This is not intended as a public relations attack on the Soviet Union, and I would hope that their leaders could recognize the American people's deep concern about human rights.

I think in many other countries of the world there has been some progress. I think in the Soviet Union there has already been some progress. The number of Jews, for instance, who have been permitted to emigrate from the Soviet Union in the last few months has increased.

If this trend should continue, I would be encouraged. But I would have to take this position of being independent in my own public pronouncements. I have quite a lot to learn. I was concerned the other day, for instance, when the AP reporer was expelled from Moscow. I had a first thought to retaliate by expelling the AP reporter from Washington. But I found out that was not the right approach to take. [Laughter.]

But we have got to be firm and we have got to be forceful. But I don't want to tie everything together in one packages so they are timid about insisting on human rights.

Q: Do you interpret this in any way as a kind of testing of you by the Soviet Union?

A: No, I don't. I don't interpret it as a testing. I regret the fact that the Soviet Union saw fit to expel a newspaper reporter. I regret very deeply the fact that the Soviet Union has not incarcerated Mr. Ginsburg, who has been one of the leaders in the Soviet Union in representing the case of the dissidents. But I can't go in with armed forces and try to change the internal mechanism of the Soviet government.

But I don't think it is designed to aggravate me or test me or test the will of this country. My commitment to human rights is clear. I will maintain that clarity to the maximum extent possible.

I don't want to mislead the American people in dealing with the Soviets or the others. We can't expect overnight success. It requires long, tedious, labored, very carefully considered progress. I am not looking for magic answers but my determination is very deep.