MacFormat 1996 July/macformat-039.iso/DATABASE/POWER/CU148.TXT

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1.5
Ronald Reagan, an
elderly, laid-back ex-
actor, was the most
popular president in
American history, and
no less popular on
leaving office than
when he was sworn
in. After the scandal
of Nixon's presidency,
the bumbling of Ford's
brief term, and the
failures of Jimmy
Carter's economic and
foreign policies,
Reagan's greatest achievement may simply have been to
restore the prestige of his office. The son of a hard-
drinking itinerant shoe-salesman, "Dutch" Reagan acquired
a taste for showbusiness as a sportscaster on a local
station. He went to Hollywood in 1937, and over the next
20 years made some 50 films. He called himself the Errol
Flynn of the B-movies. Reagan turned to politics in the
Fifties and in 1966 he rode the backlash against
Californian liberalism to an easy victory over the
incumbent Democratic governor of the state. His eight
years as governor saw tremendous economic growth in the
state, but he could not have the Republican presidential
nomination in 1976, and most observers wrote him off as
too old in 1980. His conservative backers sewed up the
Republican convention, however, and he duly trounced the
faltering Jimmy Carter to become the 40th US president.
His popularity soared when he survived an assassination
attempt in 1981 with a lighthearted courage that John
Wayne could not have bettered. But his economic policies
produced the highest unemployment in 40 years, and deep
recession by the middle of 1982. His Middle East policy
was also less than successful, but few of the
administration's blunders were blamed on Reagan, who
soon acquired the nickname of the "Teflon president". His
second term saw continued prosperity, as well as the
indictment of several of his former aides on corruption
charges. The "Iran-Contra" affair proved more
troublesome, but once more, little of the mud stuck, though
many people thought he must have known what was going
on, or could only have failed to notice if he was asleep at
his post. The electorate  seemed not to care, and by the
time Bush succeeded him in 1989, it was clear that the
prosperity of the Reagan years had been built on
unsustainable borrowing, and a new recession was
looming. The American public still does not blame Reagan;
perhaps his brand of Micawberish optimism is just what
the American electorate likes in its presidents
@
2.2
Ronald Reagan has been involved in politics for as many
years as he spent in the studio.  Indeed, he once claimed
that his film career suffered, that he was condemned to be
the "Errol Flynn of B movies" because of his political
activities.

Back in the forties he was a liberal, a member of
Americans for Democratic Action and the World
Federalists, and a very effective campaigner for
Democratic candidates smeared as commies by Mr Nixon.
What ever Democrats may now say, they thought so highly
of him in those days that he was invited to run for
Congress.  Instead, he was elected president of the Screen
Actors Guild for six terms, and led a strike to win
television residual rights for actors.

His liberalism did not survive the postwar strikes which
crippled Hollywood.  He denounced communism in
testimony before the House Committee on Un-American
Activities and campaigned for Mr Barry Goldwater in
1964, thus preparing the way to his second career as a
conservative Republican politician.  His half-hearted
attempt to win the Republican presidential nomination in
1968 was more successful than even he had expected.

He was undoubtedly a successful Governor of California
from 1966 to 1974.  Mr Jesse Unruh, the then Democratic
Speaker of the California Assembly, said: "As a governor I
think he has been better than most Democrats would
concede and not nearly as good as most Republicans and
conservatives might like to think.  As a politician, I think
he has been nearly masterful."

He inherited from his Democratic predecessor, Mr Pat
Brown, a budget deficit of 194,000m Dollars, and
bequeathed to his Democratic successor, Mr Jerry Brown,
the son of Pat, a surplus of 500m Dollars.  His most
impressive accomplishment was the reform of the welfare
programme, which earlier had threatened to bankrupt the
state.  In an extraordinary tribute by a liberal Democrat to
a conservative Republican, his successor said, "The Reagan
welfare programme is holding up, and considering today's
high unemployment, it is amazing that it has kept welfare
down as much as it has."

He appointed more blacks and Hispanic-Americans to
important state government posts than any of his
predecessors, established an effective Ecology Corps, and
sponsored anti-pollution laws which are said to be the
toughest and most effective in the country.  After voting to
dismiss Mr Clark Kerr, the president of the University of
California, and threatening to use the highway patrol to
stop campus riots, he doubled the university's budget and
awarded impressive salary increases to faculty members.

With a population of more than 20m, California is the most
populous state in the Union, and one of the most complex.
Any other governor with such a record would be regarded
as a natural candidate for the Presidency.  Indeed, a writer
in The New York Times said that his public image as a
second-rate cowboy actor concealed a well-kept secret that
would do Reagan no injury.  "He is a closet moderate and
regularly practised compromise with consenting adult
politicians in Sacramento."

The suggestion that Reagan is in fact a real politician in
cowboy actor's clothing is doubly significant when the
electoral importance of California is considered.  Its
primary is often the most influential, in part because of
the state's political clout but also because it is one of the
last to be held before the national conventions.  It can
make up a lot of minds.  For instance, in 1964 Mr
Goldwater did badly in the earlier primaries but his
victory in California started an unstoppable bandwagon.

California also sends more delegates to the conventions,
but no less important psephologists regard it as a
barometric and not a kooky or volatile state.  In The Real
Majority, Scammon wrote, "Among large states, Illinois and
California are the two that vote most consistently like
America as a whole.  Since 1948 California has never been
more than two percentage points away from the final
national percentage for the presidential winner".
@
2.3
Mr Ronald Reagan, the Republican candidate, has won the
American presidential election in a landslide victory that
included the South, Mr Jimmy Carter's power base in 1976.
Mr Reagan won in every region of the country and
captured the key states of Texas, Ohio and Pennsylvania.
President Carter has been able to take so far only his
native Georgia, West Virginia, Rhode Island and the District
of Columbia.  By 2.30 am GMT Mr Reagan had 304 electoral
college votes, well above the necessary 270.  In the
congressional races, Senator Birch Bayh of Indiana was the
first Democrat to fall victim to a right-wing campaign
against liberals.

Mr Ronald Reagan the 69 year old former Governor of
California and former film actor, has won a sweeping
victory in the American presidential election.  By 9 pm
tonight, Eastern time, the percentages of votes counted
were running consistently at about 51 per cent for Mr
Regan, 44 per cent for President Carter and 4 per cent for
Mr John Anderson.

NBC News was the first to predict formally that Mr Reagan
had won.  It made its prediction at 8.15 pm.  In 1976
when Mr Carter won his narrow victory over President
Ford, the network finally predicted his victory at 3.31 am.

Mr Carter is thus the fifth consecutive American President
who fails to complete two terms in office.  Of his
predecessors, one was murdered, one withdrew because of
opposition to his policy over Vietnam, one was forced to
resign in disgrace and one was defeated in an election.
President Eisenhower was the last to complete two terms.

President Carter telephoned Mr Reagan in California this
evening to congratulate him on his victory and shortly
before 10 pm went to his party head-quarters in
Washington to announce to his supporters that he had
conceded defeat.

Mr Reagan has made gains in every region of the country.
It looks as though President Carter will be lucky to win as
many states as President Hoover did in 1932, when he
carried six.  Two challengers to incumbent Presidents did
worse, Senator Barry Goldwater in 1964 who won six
states (and 39 per cent), and Senator George McGovern
who carried one state and the district of Columbia in 1972.

The signs of defeat came early when Mr Carter lost the
South, where the polls closed early and the networks were
able to announce that Florida, Alabama, Mississippi,
Tennessee and later, Texas, all went to the challenger.  The
moment of truth came at 8 pm when the networks were
able to announce, in quick succession, the loss of the
industrial North-east.

When he said farewell to his fellow citizens in Plains,
Georgia this morning, after voting and before returning to
Washington, President Carter's emotions got the better of
him, and he choked up.  He had by then a pretty clear idea
of what was going to happen to him.

Early this afternoon, as the first "exit polls" conducted by
the networks at the polling stations showed a large victory
for Mr Reagan, we learnt that Mr Pat Caddell, Mr Carter's
own polling expert had told the President last night that
Mr Reagan would win with a majority of 7 per cent of the
vote.
@
3.1
Last October, President Reagan delivered a carefully-
phrased challenge to the American business community
aimed at "privatizing" social policy.

Speaking to the prestigious National Alliance of Business,
Mr Reagan said he intended to slash federal spending for
social programmes in favour of increasing "private sector
leadership and responsibility for solving public needs."

The President's message, though non-specific, was
nonetheless clear.  "In effect, the Reagan Administration
has given us the chance to put up or shut up," said Mr
Roberto C. Goizueta, chairman and chief executive of Coca-
Cola.

In return for less federal regulation and interference,
American business is being asked to shoulder additional
responsibility for the health of the society in which it
operates.

This is a golden opportunity, in Mr Goizueta's opinion.
"Today we are beginning to get the opportunity we have
wanted for so long to prove that when private enterprise
is relatively free, it can be the primary agent of response
to human need," he said.

To other, equally prominent business leaders, however, Mr
Reagan's challenge is regarded as a simplistic solution to a
widening problem which would threaten to engulf and
exhaust the strained resources of the private sector.

Given the magnitude of the proposed federal spending
cutbacks, which amount to 22,000m dollars in 1982 alone,
this group believes it is unrealistic to expect business to
pick up the slack.

Presently, corporations and foundations together
contribute only about a year to social programmes, far
short of the amount needed to make up the difference,
according to a new study by the American Enterprise
Institute (AEL), a conservative "think tank" based in
Washington.

"The real question is one of balance.  How much can we
realistically expect from the private sector in dealing with
social programmes," said Mr William Baroody Jr., president
of the institute.

Both Mr Baroody and a prestigious group of business
executives interviewed for a report by the Harvard
Business School are in agreement that corporations have
neither the resources nor the ability to take on primary
responsibility for the poor and disadvantaged.

There was also unanimous agreement, however, that
business has a larger role to play in social affairs and that
this role can be more than justified in profit and loss
terms.

Mr John Filer, chairman of Aetnar Life and Casualty,
summed up the sentiments of many when he stated, "If
the city in which you do business is in total disarray, it's
going to be ever so much more difficult and expensive to
operate your business in that community."
@
3.2
When you look at the way the Americans work out their
Budget, the wonder is not that it is done badly but that it
is done at all.  As both Houses of Congress try to edge their
way towards a compromise resolution for the 1983 Budget,
the odds are worse than 50-50 that at the end of the
process the United States will actually come up with an
agreed Budget for next year.

This year the debates within the United States on the
Budget have assumed a significance far larger than at any
time in the recent past.  The United States is staring
budgetary disaster in the face, with the Federal
Government running deficits far larger than the country
can afford.  Unless Congress can come up with a package
which the Administration accepts, the Federal deficit could
be 230,000m dollars by 1985.

For the economy, that prospect would mean high interest
rates, the decimation of whole industries, such as
construction and, unless money supply policy was eased, a
recovery which would be anaemic at best.

The reason why all this could happen is twofold.  The first
part is that in its first year of office, the Reagan
Administration committed itself to a tax-cutting spree
spread over three years.  Each year the Federal
Government is planning to take less of people's wages in
taxes.  Yet at the same time, existing policies pledge the
government to spend more on services.

An example of what this all means will come on July 1.
Tax cuts will give an extra 30,000m dollars back to income
tax payers; increases in various Federal benefits will boost
the cost by another 15,000m dollars.  By coincidence, the
total cost of 45,000m dollars is exactly the amount which
the United States Treasury is expected to have to borrow
in the three months beginning in July.

Unless something is changed, this pattern will be repeated
in subsequent years.  Even President Reagan's allies in the
Senate have had to put off plans to find around 40,000m
dollars in savings from various Social Security
programmes; they just do not have the votes to carry it
through Congress before an election.  No Congressman is
willing to fight on a platform of cutting old age pensions.
The costs of compromise are higher than the costs of
deadlock for many congressmen.

It is this pattern of congressmen being in favour of cutting
deficits but being unable to face what that means in terms
of reduced benefits and services which makes it so hard to
get over every single hurdle in the budgetary process.

There are still a lot to go.  The Republican-controlled
Senate has now agreed on a Budget resolution which the
White House is supporting, even though it is very different
from the scheme which President Reagan put forward.
The Democratic-controlled House is looking at various
alternative resolutions.  When one finally emerges, there
will have to be a conference to try to merge the two.  Even
if that happens, the resolution is no more than an outline.
It will have to go back to various committees to be
converted into tax and spending votes.

The reason the process is so hard is that the cuts have to
be so big and the extra taxes have to be so tough.  And the
reason for that, critics of the Administration say, is as
Joseph Pechman of the Brookings Institution puts it: "We
went on a tax cutting spree last year."

Brookings has always been looked on as a centre of
Keynesian thinking, but Pechman is firm on the need to cut
Budget deficits.  He argues that the final 10 per cent tax in
President Reagan's programme should be scrapped as a
sign that not all the burden of the adjustment is going to
have to be borne by cuts in pensions and welfare payment.

In the Administration, there is still no sign that this
thinking is gaining ground.  Dr Norman Ture, under
secretary of the Treasury says that the only thing which
threatens large deficits in the mid-eighties is the failure of
Congress to cut spending.

"By 1985, taxes will account for about 19 per cent of our
gross national product", he says.

"The only way we can be running big deficits is if we allow
spending to be much higher than that and we ought not to
have Federal spending above that level."

Dr Ture is one of the leading "supply-siders" in the
Administration, believing that the importance of Budget
deficits is in any case being overstated.  "There is no stable
long-term relationship between deficits and interest rates",
he argues.

That, critics reply, is because there has never before been
a policy which tries to hold down the money supply as the
Federal Reserve Board is doing now.

All of the projections of the Budget deficit made in the
accompanying chart assume that there will be a "normal"
recovery.

But if that happens and money supply is kept tight,
interest rates will stay high.  High interest rates will choke
off the recovery and push the deficit higher, possibly to
350,000m dollars by 1985.  It is a classic vicious circle.
@
3.3
The final report of the congressional Iran-Contra
committee lays the blame for America's biggest scandal
since Watergate squarely on President Reagan, whom it
accuses of failing in his constitutional duty to uphold the
law.

'The ultimate responsibility of the events in the Iran-
Contra affair must rest with the President,' it says.  'If the
President did not know what his National Security
Advisers were doing, he should have.'

The long-awaited 690-page report of the joint Senate and
House of Representatives investigating committee is a
devastating indictment of Mr Reagan's style of
government, of his former advisers and of a Government
which it says disdained the law, deceived Congress,
misused its powers and undermined the principles of US
democracy.

However, eight of the Republican members of the
committee refused to sign the report, which they called
'partisan and hysterical' in its conclusions.

They also insisted that there had been no systematic
breaking of the law nor administration-wide dishonesty,
and issued their own dissenting view and report.  But even
the majority report does accept President Reagan's public
statements that he did not know of the diversion of Iran
arms sales profits to the Nicaraguan Contras.  But this did
not affect the issue of his responsibility, it says.

'The President created or at least tolerated an environment
where those who did know of the diversion believed with
certainty that they were carrying out the President's
policies.'

It was the policy of President Reagan, not an isolated
decision by Rear-Admiral John Pindexter, the former
National Security Adviser, nor Lieutenant-Colonel Oliver
North, his aide, to sell arms secretly to Iran and to
maintain the Contras 'body and soul', the report
emphasizes.  The facts about his advisers' pursuit of a
covert operation, their lying, shreding of documents and
cover-up, had been on the public record for months.

'The actions of those individuals do not comport with the
notions of a country guided by law.  But the President has
yet to condemn their conduct.'

Listing what he told the public about the arms sales, the
shooting down of a CIA-chartered plane in Nicaragua, the
trading of arms for hostages and the signing of presidential
intelligence findings, it concludes, 'all of these statements
by the President were wrong'.  US policy, the report says,
was made by a 'cabal of the Zealots', who believed a
rightful cause justified any means.

'In a constitutional democracy, it is not true, as one official
maintained, that 'when you take the king's shilling, you do
the king's bidding'.  'The idea of monarchy was rejected
here 200 years ago, and since then the law not any official
or ideology - has been paramount.  For not instilling this
precept in his staff, for failing to take care that the law
reigned supreme, the President bears the responsibility.'

The mordant report, written with clarity, precision and
controlled anger, does not reveal much new about the
scandal, which it calls complicated and profoundly sad for
America.  It admits that after taking evidence from 500
witnesses and analysis of 300,000 documents, the full
truth may never be known.

And although it repeatedly points to deception, underhand
dealing and financial irregularities, it says the question of
guilt or criminal intent by any individuals is a matter for
counsel and the courts.

However, it criticizes especially Colonel North, whom it
called the 'central figure' at the operational level; the late
William Casey, the CIA Director, who promoted the concept
of an extra-legal covert organization; and Mr Edwin Meese,
the Attorney-General whose 'lapses' in delaying the sealing
of Colonel North's office and failing to question Admiral
Poindexter, 'placed a cloud' over his investigation.

It firmly clears Vice-President George Bush of
responsibility, saying there was no evidence he knew of
the diversion nor could anyone recall his views at
meetings on the Iran initiative.

The White House yesterday praised the work of the
committee and said President Reagan had already
undertaken reforms to prevent a recurrence.  Before the
report was even issued, however, the Administration
began playing down its significance.  Mr Marlin Fitzwater,
the White House spokesman, said there was really nothing
new in it.

Senator Daniel Inouye, the Democratic chairman of the
Senate committee, said in presenting the report it was time
to put the Iran-Contra affair behind the nation.  But the
lessons must endure.
  @
4.3
The Reykjavik summit ended in deadlock yesterday after
President Reagan refused to accept any limitation on his
"Star Wars" Strategic Defence Initiative (SDI) research
programme.  There is now little prospect of a full-scale
summit in Washington in the next few months.

The breakdown, after eleven and a half hours of talks -
almost twice the time scheduled for the summit - came
despite potential progress on the whole range of arms
control issues.

President Reagan said he made an historic offer on arms
control but Mr Gorbachev rejected it.  He told cheering US
servicemen before flying home that despite failing to agree
on arms control "we made great strides in resolving most
of our differences and we are going to continue the effort."

He said: "Though we put on the table the most far-reaching
arms control proposal in history, the General Secretary (Mr
Gorbachev) rejected it.

"The Soviet Union insisted we sign an agreement that
would deny to me and future presidents the right to test
and deploy defences against nuclear weapons.  This we
could not and will not do."

He said he offered Mr Gorbachev a 10-year delay in the
deployment of SDI in exchange for the elimination of all
strategic ballistic missiles from US and Soviet arsenals.  Mr
Gorbachev, however, agreed only if SDI research was
restricted to the laboratory, "which would have killed our
defensive shield", President Reagan said.

A sombre, weary and drawn Mr George Shultz, US
Secretary of State, said the United States was "in the end
deeply disappointed at this outcome".

He said President Reagan had refused to agree to Mr
Gorbachev's call for a change, described by the Russians as
a strengthening, in the 1972 anti-ballistic missile treaty,
which would have confined all research and deployment
for space-based defence to the laboratory.  This would
have effectively ended the US SDI programme, which was
the main thrust of the Soviet Union's negotiating demand.

The President "simply had to refuse to compromise the
security of the US, of our allies and freedom by
abandoning" strategic defence, Mr Shultz said.

The breakdown appeared to come in the final marathon
four-hour session, which had not been originally
scheduled.  Mr Reagan and Mr Gorbachev were both very
disappointed at their inability to get over the
disagreement.

In an emotional voice Mr Shultz said: "The President's
performance was magnificent, I have never been so proud
of my President as I have been in these sessions, and
particularly this afternoon."

Mr Shultz said the two leaders had made progress on most
other key areas of arms control and had laid the
foundation for some important potential agreements on
cutting strategic and medium-range arms.

He said the two leaders reached "sweeping potential
agreements" - including a reduction of strategic weapons
by half - that could not be finalized because of Soviet
insistence that SDI research on a space-based missile-
defence system be confined to the laboratory.

"It became more and more clear that the Soviet Union's
objective was effectively to kill off the SDI programme,
and to do so by seeking a change in the ABM treaty that
would so constrain ... that research would not be able to
proceed forcefully," he said.

"The President ... simply would not turn away from the
basic interest of the United States' allies in the free world
by abandoning this.

"So in the end, with great reluctance the President ... had to
refuse to compromise on the security of the United States,
our allies and freedom, by abandoning the shield that is in
the forefront of freedom," he added.

Mr Shultz said it was important to realize how effectively
and constructively the President worked, "how ready he
was to go the last mile to try to bring into being these
potentially very significant agreements."  But he could not
allow essential agreement to be destroyed in the
proceedings.

He said everything discussed was in relation to the other
parts.  He insisted that the very fact of SDI's "vigorous
presence" had done much to make the Reykjavik talks
possible, and that SDI was a necessary insurance policy.
But if the many sweeping arms agreements within grasp
came about only as a result of the very existence of the US
SDI programme, "one had to ask one self would they come
to pass if the SDI programme was dropped."

Mr Shultz said that the discussion throughout was
straightforward and civil and people did not lose their
temper, but it was vigorous and tense.

The two sides had outlined their positions on the first day
and agreed on "very good language on most issues."  On
intermediate range weapons they had been able to find a
"very fine" agreement that would leave only 100 warheads
- a "breathtaking reduction" - in the Asian part of the
Soviet Union and in the United States, thus eliminating
them from Europe.  They also successfully addressed the
question of short range missiles.

Earlier as the two leaders, accompanied by their foreign
ministers and close advisers, overran the summit
timetable, it appeared that main sticking points had held
up earlier hopes for rapid progress on guidelines for their
Geneva arms control negotiations.

Despite the news blackout imposed by both governments,
Mr Yevgeny Velikhov, a senior member of the Soviet arms
negotiating team infuriated the American side by claiming
- as the talks were in progress - that the two governments
were closer than ever before to an arms control
agreement.

The US Government claimed this was a blatant effort by
the Soviet side to pressure the Americans to sign a quick
agreement.

The two leaders began their final day of negotiations at
10am after receiving early morning reports from groups of
experts who had been negotiating throughout the night on
arms control, human rights, bilateral relations and regional
conflicts.

The decision to set up these groups was the first concrete
indication that what had been inaccurately described as "a
pre-summit" could be turning into something much more
important and historic in terms of superpower relations.
@
4.4
Smiling broadly and to the warm applause of their wives,
their delegations and senior negotiators, President Reagan
and Mr Mikhail Gorbachev yesterday signed the historic
agreement eliminating all ground-based intermediate-
range nuclear missiles.

The two leaders signed 16 times the clauses of both
Russian and English versions of the 200-page document.

They then exchanged their pens, shook hands warmly,
applauded each other and beamed to the whirr of dozens
of cameras and the television cameras carrying the simple
but portentous ceremony live to the US, the Soviet Union
and other parts of the world.

The treaty, President Reagan said, was an 'excellent
example of the rewards of patience'.  When the zero option
was first proposed more than six years ago, it was
dismissed as impossibly visionary and unrealistic.  'With
patience, determination and commitment we have made
this a reality.'

Mr Gorbachev hoped December 8, 1987 would 'become a
date that will be inscribed in the history books - a date
that will mark the watershed separating the era of a
mounting risk of nuclear war from the era of a
demilitarization of human life'.

The treaty, whose final verification details were worked
out only last weekend, requires the destruction within
three years of some 2,800 missiles with 3,800 warheads,
mainly based in Europe.  It was hailed by both leaders as
an historic achievement, a beginning to greater mutual
trust and a symbol of hope for mankind.

'We can be proud of planting this sapling, which may one
day grow into a mighty tree of peace,' Mr Gorbachev said.
Mr Reagan said the treaty protected the interests of
America's friends and allies.  It also embodies the need for
glasnost, a greater openness, in military programmes and
forces.

Mr Reagan said he had listened to the wisdom of the old
Russian proverb, and then, excusing his pronunciation,
repeated his favourite maxim: 'Doveryai no proverya' -
Trust but verify.  Mr Gorbachev, standing beside him,
interrupted to say: 'You repeat that at every meeting,' and
was greeted with loud laughter and applause.

His impromptu remark, lending a disarming informality to
the ceremony, may also have been a subtle hint to Senate
hardliners who have doubts about ratification that
President Reagan has done everything he could to ensure
the best pssible verification of the treaty.

Mr Reagan added: We can only hope that this history-
making agreement will not be an end in itself, but the
beginning of a working relationship that will enable us to
tackle the other issues, urgent issues, before us: strategic
offensive nuclear weapons, the balance of conventional
forces in Europe, the destructive and tragic regional
conflicts that beset so many parts of our globe, and respect
for the human and natural rights that God has granted to
all men.'

The Soviet leader, in his brief speech before signing the
treaty, said succeeding generations would hand down their
verdict on its importance.  It had a 'universal significance'
for mankind, both from the standpoint of world politics
and from the standpoint of humanism.  He said it offered a
big chance to get on to the road leading away from the
threat of catastrophe.

At their opening 90-minute round of talks in the morning,
held with only interpreters and note-takers present, the
two leaders reviwed the general 1 elations between their
countries and spent considerable time on human rights -
although the White House would not say whether they
discussed specific cases.

In the afternoon, Mr Gorbachev, outlined Soviet aspirations
for arms control and future nuclear reductions, and Mr
Reagan detailed the US position and the need for progress
in reducing conventional forces.

Mr Marlin Fitzwater, the White House spokesman,
described Mr Gorbachev as 'animated' and Mr Reagan as
'forceful', and said it was a day of 'positive, productive
discussion'.

The two sides set up two working groups in the afternoon
- one on arms control, headed by the veteran American
expert Mr Paul Nitze and the Soviet Chief of the General
Staff, Marshal Sergei Akhromeyev, and the other on
regional conflicts, bilateral relations and human rights.
These will report back today with specific
recommendations.  Mr Fitzwater said neither leader went
into detail yesterday on the Anti-Ballistic Missile Treaty or
on the US Strategic Defence Initiative, but these issues and
any new ideas would be taken up by the working group.

Today they will also focus on regional conflicts, especially
Afghanistan, the Gulf, southern Africa and Central
America.

Meanwhile it was announced that Marshal Akhromeyev
will visit the Pentagon today for talks with Mr Frank
Carlucci, the Defence Secretary.  His tour of the building
will include the command centre and the meeting room of
the Joint Chiefs of Staff.

Mr Gorbachev was given a set of solid-gold cufflinks which
matched the pair the President was wearing when they
first met yesterday.  The cufflinks pictured the biblical
prophet Issiah breaking swords into ploughshares.

The INF treaty actually eliminates only 4 per cent of the
superpowers' nuclear stockpile.  In his public remarks
since arriving, Mr Gorbachev has emphasized several times
that he is eager now to move on to further arms
reductions, starting with a 50 per cent cut in strategic
weapons and moving on to other nuclear weapons,
including battlefield weapons, in Europe.

After the signing ceremony Mr Gorbachev, introducing a
note of controversy, said: 'People want to live in a world in
which American and Soviet spacecraft come together for
dockings and joint voyages, not for Star Wars.'

Mr Reagan spoke of America's moral wealth.  'Only those
who don't know us believe that America is a materialistic
land.  But the true America is not supermarkets filled with
meats, milk and goods of all description; it is not highways
filled with cars.  No, true America is a land of faith and
family.'

President Reagan had welcomed Mr Gorbachev on the
south lawn of the White House declaring that the two
superpowers were about to take a 'gaint step' towards
peace.

The two leaders met again in the evening at a glittering
state dinner in the White House.  The menu included
salmon, lobster with caviar sauce, veal, sweet corn, brie
and crushed walnuts with California chardonnay.