MS. FREDERICK: Gentlemen, I'm sorry we do not have time enough for two complete sequences of questions. We now have only twelve minutes left. Therefore, I would like to ask for shorter questions and shorter answers. And we also will drop the follow-up question. Each candidate may still respond, of course, to the other's answer. Mr. Trewhitt, a question for Governor Carter.

MR. TREWHITT: Governor Carter, before this event the most communications I received concerned Panama. Is - would you as president be prepared to sign a treaty which at a fixed date yielded administrative and economic control of the Canal Zone and shared defense, which, as I understand it, is the position the United States took in 1974?

MR. CARTER: Well, here again, the Panamanian question is one that's been confused by Mr. Ford. He had directed his diplomatic relation representative to yield to the Panamanians full sovereignty over the Panama Canal Zone at the end of a certain period of time. When Mr. Reagan raised this - question in Florida - Mr. Ford not only disavowed his instructions, but he also even dropped, parenthetically, the use of the word "detente." I would never give up complete control or practical control of the Panama Canal Zone, but I would continue to negotiate with the Panamanians. When the original treaty was signed back in the early 1900s, when Theodore Roosevelt was president, Panama retained sovereignty over the Panama Canal Zone. We retained control as though we had sovereignty. Now I would be willing to go ahead with negotiations. I believe that we could share more fully responsibilities for the Panama Canal Zone with Panama. I would be willing to continue to raise the payment for shipment of goods through the Panama Canal Zone. I might even be willing to reduce to some degree our military emplacements in the Panama Canal Zone, but I would not relinquish practical control of the Panama Canal Zone any time in the foreseeable future.

MS. FREDERICK: President Ford.

MR. FORD: The United States must and will maintain complete access to the Panama Canal. The United States must maintain a defense capability of the Panama Canal. And the United States will maintain our national security interest in the Panama Canal. The negotiations far the Panama Canal started under President Johnson and have continued up to the present time. I believe those negotiations should continue. But there are certain guidelines that must be followed, and I've just defined them. Let me take just a minute to comment on something that Governor Carter said. On nonproliferation, in May of l975, I called for a conference of - nuclear suppliers. That conference has met six times. In May of this year, Governor Carter took the first initiative, approximately twelve months after I had taken my initiative a year ago.

MS. FREDERICK: Mr. Valeriani, a question for President Ford.

MR. VALERIANI: Mr. President, the Government Accounting Office has just put out a report suggesting that you shot from the hip in the Mayaguez rescue mission and that you ignored diplomatic messages saying that a peaceful solution was in prospect. Why didn't you do more diplomatically at the time; and a related question: Did the White House try to prevent the release of that report?

MR. FORD: The White House did not - prevent the release of that report. On July twelfth of this year, we gave full permission for the release of that report. I was very disappointed in the fact that the - GAO released that report because I think it interjected political partisan politics at the present time. But let me comment on the report. Somebody who sits in Washington, D.C., eighteen months after the Mayaguez incident, can be a very good grandstand quarterback. And let me make another observation. This morning, I got a call from the skipper of the Mayaguez. He was furious because he told me that it was the action of me, President Ford, that saved the lives of the crew of the Mayaguez. And I can assure you that if we had not taken the strong and forceful action that we did, we would have been - criticized very, very - severely for sitting back and not moving. Captain Miller is thankful. The crew is thankful. We did the right thing. It seems to me that those who sit in Washington eighteen months after the incident are not the best judges of the decision-making process that had to be made by the National Security Council and by myself at the time the incident was developing in the Pacific. Let me assure you that we made every possible overture to the People's Republic of China and through them to the Cambodian Government. We made - diplomatic - protests to the Cambodian government through the United Nations. Every possible diplomatic means was utilized. But at the same time, I had a responsibility, and so did the National Security Coun- Council, to meet the problem at hand. And we handled it responsibly and I think Captain Miller's testimony to that effect is the best evidence.

MS. FREDERICK: Governor Carter.

MR. CARTER: Well, I'm reluctant to comment on the recent report - I haven't read it. I think the American people have only one - requirement - that the facts about Mayaguez be given to them accurately and completely. Mr. Ford has been there for eighteen months. He had the facts that were released today immediately after the Mayaguez incident. I understand that the report today is accurate. Mr. Ford has said, I believe, that it was accurate, and that the White House made no attempt to block the issuing of that report. I don't know if that's exactly accurate or not. I understand that both the - the - Department of State and the Defense Department have approved the accuracy of today's report, or yesterday's report, and also the National Security Agency. I don't know what was right, or what was wrong, or what was done. The only thing I believe is that whatever the - the knowledge was that Mr. Ford had should have been given to the American people eighteen months ago, immediately after the Mayaguez - incident occurred. This is - what the American people want. When something happens that endangers our security, or when something happens that threatens our stature in the world, or when American people are endangered by the actions of a foreign country, - just forty sailors on the Mayaguez, we obviously have to move aggressively and quickly to rescue them. But then after the immediate action is taken, I believe the president has an obligation to tell the American people the truth and not wait eighteen months later for the report to be issued.

MS. FREDERICK: Gentlemen, at this time we have time for only two very short questions. Mr. Frankel, a question for Governor Carter.

MR. FRANKEL: Governor Carter, if the price of - gaining influence among the Arabs is closing our eyes a little bit to their boycott against Israel, how would you handle that?

MR. CARTER: I believe that the boycott of American businesses by the Arab countries because those businesses trade with Israel or because they have American Jews who are owners or directors in the company is an absolute disgrace. This is the first time that I've - remember in the history of our country when we've let a foreign country circumvent or change our Bill of Rights. I'll do everything I can as president to stop the boycott of American businesses by the Arab countries. It's not a matter of diplomacy or trade with me. It's a matter of morality. And I don't believe that Arab countries will pursue it when we have a strong president who will protect the integrity of our country, the commitment of our Constitution and Bill of Rights and protect people in this country who happen to be Jews. It may later be Catholics; it may be - later be Baptists who are threatened by some foreign country. But we ought to stand staunch. And I think it's a disgrace that so far Mr. Ford's administration has blocked the passage of legislation that would've revealed by law every instance of the boycott and it would've prevented the boycott from continuing.

MS. FREDERICK: President Ford.

MR. FORD: Again Governor Carter is inaccurate. The Arab boycott action was first taken in 1952. And in November of 1975 I was the first president to order the executive branch to take action, affirmative action, through the Department of Commerce and other cabinet departments, to make certain that no American businessman or business organization should discriminate against Jews because of an Arab boycott. And I might add that - my administration - and I'm very proud of it - is the first administration that has taken an antitrust action against companies in this country that have allegedly cooperated with the Arab boycott. Just on Monday of this week I signed a tax bill that included an amendment that would prevent companies in the United States from taking a tax deduction if they have in any way whatsoever cooperated with the Arab boycott. And last week when we were trying to get the Export Administration Act through the Congress - necessary legislation - my administration went to Capitol Hill and tried to convince the House and the Senate that we should have an amendment on that legislation which would take strong and effective action against those who - participate or cooperate with the Arab boycott. One other point. Because the Congress failed to act, I am going to announce tomorrow that the Department of Commerce will disclose those companies that have - participated in the Arab boycott. This is something that we can do; the Congress failed to do it, and we intend to do it.

MS. FREDERICK: Mr. Trewhitt, a very brief question for President Ford.

MR. TREWHITT: Mr. President, if you get the accounting of missing in action you want from North Vietnam - or from Vietnam, I'm sorry, now would you then be prepared to reopen negotiations for restoration of relations with that country?

MR. FORD: Let me restate - our policy. As long as Vietnam, North Vietnam, does not give us a full and complete accounting of our missing in action, I will never - go along with the admission of Vietnam to the United Nations. If they do give us a bona fide, complete - accounting of the eight hundred MIA's, then I believe that the United States should begin negotiations for the - admission of Vietnam to the United Nations. But not until they have given us the full accounting of our MIAs.

MS. FREDERICK: Governor Carter.

MR. CARTER: One of the - most embarrassing - failures of the Ford administration, and one that touches specifically on human rights, is his refusal to appoint a presidential commission to go to Vietnam, to go to Laos, to go to Cambodia and try to trade for the release of information about those who are missing in action in those wars. This is what the families of MIAs want. So far, Mr. Ford has not done it. We've had several fragmentary efforts by members of the Congress and by - by private citizens. Several months ago the Vietnam government said, "We are ready to sit down and negotiate for release of information on MIAs. So far, Mr. Ford has not responded. I would never normalize relationships with Vietnam, nor permit them to join the United Nations until they've taken this action. But that's not enough. We need to have an active and aggressive action on the part of the president, the leader of his country, to seek out every possible way to get that information which has kept the MIA families in despair and doubt, and Mr. Ford has just not done it.

MS. FREDERICK: Thank you Governor Carter. That completes the questioning for this evening. Each candidate now has up to three minutes for a closing statement. It was determined by the toss of a coin that Governor Carter would take the first question, and he now goes first with his closing remarks. Governor Carter.

MR. CARTER: The purpose of this debate and the outcome of the election will determine three basic things: Leadership, upholding the principles of our country, and proper priorities and commitments for the future. This election will also determine what kind of world we leave our children. Will it be a nightmare world threatened with the proliferation of atomic bombs, not just in five major countries but dozens of smaller countries that have been permitted to develop atomic weapons because of a failure of our top leadership to stop proliferation? Will we have a world of hunger and - and hatred, and will we be living in an armed camp stripped of our friendship and allies hiding behind a tight defense that's been drawn in around us because we are fearful of the outside world? Will we have a government of secrecy that excludes the American people from participation in making basic decisions and therefore covers up mistakes and makes it possible for our government - our government - to depart from the principles of our Constitution and Bill of Rights? Or will we have a world of peace with the threat of atomic weapons eliminated, with full trade, with our people at work, inflation controlled, openness in government, our people proud once again, Congress, citizens, president, secretary of state working in harmony and unity toward a common future? Or world where people have enough to eat and a world where we care about those who don't? Can we become a breadbasket of the world instead of the arms merchant of the world? I believe we can and we ought to. Now we've been hurt in recent years in this country. In the aftermath of Vietnam, Cambodia, Chile, Pakistan, Angola, Watergate, CIA, we've been hurt. Our people feel that we've lost something precious. That's not necessary. I wanna see our nation - return to a posture and an image and a standard to make us proud once again. I remember the world with NATO, and the world of Point Four, and the world of the Marshall Plan, and the world of the Peace Corps. Why can't we have that once again? We ought to be a beacon for nations who search for peace and who search for freedom, who search for individual liberty, who search for basic human rights. We haven't been lately. We can be once again. We'll never have that world leadership until we are strong at home, and we can have that strength if we return to the basic principles. It ought not to be a strength of bombast and threats. It ought to be a quiet strength based on the integrity of our people, the vision of the Constitution, an in- innate strong will and purpose that God's given us in the greatest nation on earth - the United States.

MS. FREDERICK: President Ford.

MR. FORD: As we have seen tonight, foreign policy and defense policy are difficult and complex issues. We can debate methods, we can debate one decision or another, but there are two things which cannot be debated - experience and results. In the last two years, I have made policy decisions involving - long-range difficulties and policies and made day-to-day judgments not only as president of the United States but as the leader of the free world What is the result of that leadership? America is strong. America is free. America is respected. Not a single young American today is fighting or dying on any foreign battlefield. America is at peace and with freedom. Thank you, and good night.

MS. FREDERICK: Thank you, President Ford. Thank you, Governor Carter. I also want to thank our questioners and the audience here this evening. The third and final debate between President Ford and Governor Carter will take place on October the twenty-second at nine-thirty P.M. Eastern daylight time on the campus of the College of William and Mary in Williamsburg, Virginia. The subject matter will cover all issues. These debates are sponsored by the League of Women Voters Education Fund to help voters become better informed on the issues and to generate greater voter turnout in the November election. Now, from the Palace of Fine Arts Theater in San Francisco, good night.