Transcript of remarks by Secretary of State George P. Shultz and translated remarks by General Secretary Mikhail Gorbachev at a State Department luncheon honoring Gorbachev and his wife, Raisa:Shultz: . . . Benjamin Franklin, the father of American diplomacy who exchanged correspondence with {Russian empress} Catherine the Great and for whom this room is named, would be fascinated to be with us today, for this is the first time the leader of the Soviet Union has visited the Department of State . . . .

Your visit here . . . and the prospect of a visit by President Reagan to Moscow, should cause us to think about guidelines for managing our rela- tions . . . .

First, ours is a relationship as important as it is unique . . . . Second, our relationship will continue to be a difficult one to manage . . . . Third, we must be realistic avoiding extremes either of hostility or euphoria through the ups and downs of our relations . . . . Fourth, we must speak with clarity and candor to one another about our differences . . . . Fifth, we must look to the future without neglecting the lessons of the past . . . . This leads to a sixth point: the recognition that openness to ideas, information and contacts is the key to future success . . . .

We must seek steady progress toward a more open, more predictable, more stable and constructive relationship. In this time of change, a complicated interplay of international relationships complicates the management of our bilateral affairs.

But new patterns of interaction also offer new opportunities for cooperation and progress. Let us grasp those opportunities . . . .

Gorbachev: . . . May I express my gratitude for your invitation to the United States Department of State, a highly authoritative body.

In international politics, much depends on the people who work here. At any rate, without their participation, what we witnessed and took part in yesterday would not have happened.

Yesterday, the president of your country and I signed a treaty eliminating a whole class -- to be more precise, two classes -- of nuclear arms. As a result, the world will be rid of a total of some 2,000 deadly warheads. The number is not all that big, but the treaty's significance goes far beyond its specific content.

We regard it as a start in implementing the program of building a nuclear-free world, which I proposed on behalf of the Soviet leadership and the Soviet people almost two years ago, on Jan. 15, 1986. Since then, I have been asked many times whether I continue to believe in the feasibility of that program. My answer is yes, I most certainly do.

The signing of the treaty on intermediate- and shorter-range missiles demonstrates that the road toward that goal is not at all easy, yet it also shows that we have chosen the right road and that the goal can be reached.

Urging us on is the will of hundreds of million of people who are beginning to understand that, as the 20th century draws to a close, civilization has approached a dividing line, not so much between different systems and ideologies but between common sense and mankind's feelings of self-preservation on the one hand, and irresponsibility, national selfishness, prejudice -- to put it briefly, old thinking -- on the other.

Mankind is beginning to realize that it has had enough of wars, that an end must be put to wars for good. The two world wars, and the grueling cold war, along with minor wars which cost and continue to cost million of lives, are too exhorbitant a price to pay for adventurism, ambition, disregard for the interests and rights of others, the unwillingness or inability to reckon with reality and with the legitimate right of all nations to make their own choice and seek their own place under the sun.

This implies that the lofty ideals advanced by humanists throughout the ages, the ideals of peace and liberty, awareness of the value of each human life must underlie practical politics. Each new step in international life, given a sensible and responsible approach to it, not only gives us a deeper insight into the problems but also provides additional opportunities for their solution.

What matters now is that we cannot let those opportunities pass and must use them as fully as possible to build a safer and more democratic world free from the trappings and the psychology of militarism.

The step we have taken in signing the treaty and preparations for it were, without exaggeration, truly instructive. This has enriched our two countries and world politics with recognition of the significance of several difficult yet simple truths. It is appropriate to mention some of them here.

First of all, while moving closer to each other, we have come to appreciate even more the role and importance of Soviet-American relations in the current development of international affairs, together with our enormous responsibility not only to our own people but also to the world community.

Secondly, we have felt how important is our allies' support for our efforts. On top of that, we have felt the substantial potential carried by their ideas and advice, by their concerned and genuine involvement and by the coordination of our actions with them.

Thirdly, we have seen in practice how important is the understanding of one's intentions, proposals and plans by the allies of one's partners and, of course, the sympathy and even solidarity, and simply the wishes of success coming from many nations, big and small, from the developing world, from nonaligned nations.

All of this has confirmed persuasively a simple, yet very important truth: Peace in the world today cannot be a monopoly of one country or a group of countries, however powerful.

Peace is the concern and preoccupation of many and increasingly of all of us together. And where many interact, reciprocity and compromise are inevitable.

Peace from a position of strength is inherently unstable whatever anyone might claim. By its very nature, it is based on confrontation whether covert or overt. It is based on the permanent risk of flare-ups on the temptation to try and use force.

For ages, mankind had to put up with such a bad peace. This can no longer be tolerated. Some believe that, in the process of preparing the treaty, the Soviet side had conceded too much; others, that it was the U.S. that made too many concessions. I think neither of you is correct. Each side has conceded as much as was necessary to balance their interests in this particular sphere.

In building an atmosphere of contacts and lively communication, of better knowledge of each other, something without which the treaty would have been difficult to achieve, we and, hopefully, you, too, have come to feel much more strongly that, for us to remain different, to live as each of us wants to, to be able to argue with each other and uphold one's own view, it is imperative, above all, to preserve peace.

Yesterday, a fundamentally new and important, albeit modest, step was taken toward a more equitable and a more humane order in international relations. We would like to hope that subsequent steps will not be too long in coming. It is, after all, always easier to pursue a good cause based on the experience of what is already being done.

Today, all of us are making the passage from knowledge as dogma to knowledge as thinking. We have begun to reestablish the peace-making vocation of politics. It can no longer remain, as it happened in the 20th century after two world wars, a continuation of war by different means.

Also changing with politics is the vocation of diplomacy, which is designed to identify the seeds of accord even in a sea of discord and to translate the possible into reality.

Over the past few years, our countries' diplomatic services have done a great deal of work. And while pointing to yesterday's truly history-making event, the signing of the treaty, one cannot but -- particularly here in this building of the State Department -- pay tribute to the many who dedicated to it their intellect, energy, patience, perseverance, knowledge and a sense of duty to their nation and to the international community.

And first of all, I would like to mention Comrade Eduard Shevardnadze {Soviet foreign minister} and Mr. George Shultz. {Sustained applause.}

I would also like to say a few kind words about the diplomats working outside their own countries. They were not just negotiating with each other. Working in the capitals of their host countries, they were helping us to understand what is obtainable and what is not, what is promising and what as yet cannot be done.

I like an idea I read in a recent article published in an American newspaper: Diplomacy is a country's first line of defense and a front-line in the battle for peace.

But foreign policy has ceased to be a domain of professionals alone. The practice of secret collusions and agreements which deceive nations and doom them to actions and sacrifices that are contrary to their vital interests, is also being consigned to the past. One way or another, any falsehood, any untruth will be uncovered.

I regard this distinctive feature of our time as a guarantee of a genuine democratization of relations among states. In the powerful gravity field of universal scrutiny, attention and the very high demands placed on people vested with the authority of representing their country in others, they must permanently be accountable. They must explain and elucidate.

Besides, they stand on the delicate line of contact between cultures. A lot depends on them in how one nation understands the life of another. And today, this is something badly needed in making policy, too.

The presence in this room of prominent representatives of the United States and of the Soviet Union is not merely a tribute to protocol or etiquette. It is also evidence to the fact that the policy of seeking better mutual understanding between our countries enjoys authoritative support.

Such support has inspired us on the long and arduous road to the agreement that starts real nuclear disarmament. But since we have no intention of stopping in the early stages, that support will also be needed tomorrow when we continue our joint effort to eliminate the largest and also the most dangerous portion of our nuclear arsenals.

In this context, I would like to mention the potential for developing relations between our countries inherent in contacts among our academic and cultural communities.

To a substantial degree, it is they who shape a nation's consciousness, and its attitudes towards other nations. And prescisely for that reason, they find a common language more easily, providing a necessary background for policy-making, too. The role that our two countries' intellectuals is playing in relations between our peoples and countries is big and important.

In the language of simple, human communication, both in Russian and in English, what we have achieved here means hope reborn.

Force is a variable and an unstable category. But truth, arrived at through honest efforts, is a constant for it is human. Today, we are closer to the truth than we were yesterday. I congratulate you.