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on today's report from Washington, Senator Smathers discusses domestic and foreign problems of interest to the people of Florida and the nation. Now here is the first question Senator matters. I think it's best that we first discussed this Panamanian situation. Now there is one I believe, which you have followed for many years.

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This is not a new thing. What would you attribute this ultimate, uh, sort of break off to Bob? There have. Regrettably, there have been a series of differences that have existed between the Panamanians as distinguished from the United States, citizens who live in the Canal Zone for a long time and as far back as 1954 55 57 early sixties.

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I recommended, as did others, that they saw these grievances. But I think the basic problem arose was when in the canal zones, when the Canal Zone schools, which were taught by teachers from the United States when those schools were closed to the Panamanian students, most of the Panamanians who were my age.

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I hate to talk about my age, but were my age. They went to the school in the canal zone, and even though they were Panamanians, and spoke total Spanish language. They were United States oriented, and they thereby understood our position. They were really for us now when we cut off those schools right after World War Number two, then that began to develop a schism between the people on the outside of the Canal Zone and the people inside the Canal zone and the grievances about the prices of goods and who could bind the commissary and whether or not you had to get a pass and the flags and all that began to arise.

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And it was aggravated, of course, as the Communist moved into the area. Now, actually, no board whom I know very well who's sort of the leader in this thing and a very wild and, I think, extravagant leftist. He's the representative to Panama, to the United from Panama at the United Nations.

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I remember in 1900. I think it was in early late in the fifties that I talked with him quite a long time about it, and that's when they wanted to have the flag, and I recommend it at that time. The president is now. What they do is create a little area where they would call it the area of the flags and then have the Panamanian flag and the American flag.

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And I would say this is the symbol of friendship and cooperation. Later on, that was not done. But then General Eisenhower issued an order that the flags be flown simultaneously in together now when, of course, that rule was violated here the other day by some of the students at Balboa High School, which is within the zone.

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By then, the Panamanians, egged on by the Communists, they started this rumpus, and it's a very serious thing, and it could hurt us very badly. All over Latin America. Do you feel the U. N or the O s should take under their wing the settlement of these differences?

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I don't I First I think this the United States must make it eminently clear which we have. And I congratulate President Johnson on that. We will not negotiate under the threat of anybody's rifle. Now, if we can get a team together, if they will back off, we will back off and try to settle with the O.

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A s guidance. These various issues and grievances which have been so long with us on for that. But I don't think that we should give up any basic rights or any basic interests. Ah, under the threat of any any violence to us. For any of our people back to Washington, I'd like to know whether you feel that the honeymoon is coming to an end between the White House and the Congress.

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I wanted to You still attend the regular meetings of the leadership with President Johnson? Yes, Every Tuesday morning we go to the meetings, and I don't think the honeymoon is over at all. As a matter of fact, I think President Johnson, by virtue of his 32 years in the Congress, is going to get really more work out of the Congress and at a faster rate than has ever been done before.

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And I think we're going to pass practically all of the major bills, which he has recommend you have been sitting as chairman of the hearings in the Finance Committee have been dealing with the tax matters. Now, this last Tuesday, did President Johnson castigates you for not hurrying matters.

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I have been in a jocular way. Yes, the president calls me a couple of times, sometimes a day and rather needles. Me, I think is a better word about why don't we get the tax bill out? I tell him we're doing it as fast as we can.

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I do think we will have it reported by the end of January. I'll have more to say on that next week. Thank you very much. Senator Smathers. Well, Senator Smathers on this tax matter. The president would like some action by the end of January, but this is obviously impossible.

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I understand that you have discussed with the leadership yourself means to expedite it. Now what has come of that were you say it's impossible by the end of January? That's not correct. We're going to clear the bill through the Senate Finance Committee by the end of January.

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Now, Senator Gore from Tennessee was very much opposed to the bill in any form, whatever and anything in it, and he had pledged himself earlier to defeat it. Ah, and however he and he wrote a letter to the majority leader, Mike Mansfield, in which he objected to the Finance Committee meeting during the while the Senate was in session, which meant that we would have been delayed.

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Now. I worked out an agreement with Senator Gore and took him to Senator Humphrey and Senator Mansfield to approval, and the agreement was that we would finish the tax bill in the committee and report it to the floor by the end of January. Now that means then that it can be started.

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If we're if we're really sharp and on the ball, we can get the tax bill started being debated on the floor of the Senate by the first or second day of February. And what we hope to do, of course, is then to get it over with before the Lincoln Day speech is.

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And the Recesses start for the Republicans on their Lincoln Day speech is, and I think that there's a good chance to do it. But Senator, being realistic about up the tax bill from the Senate standpoint is certainly not going to be the same as the House version.

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Is it not at all these conferences? That's right, we're changing it. Well, that's what we've got to pass it through the Senate, as you know, before we then take it to the House conference. Now then that's where we work out the differences between the two bills.

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Now we have changed the House bill in several respects. I don't think I don't know whether we want to go and do it. But the major re point that's been changed as far as we've lost revenue to the government of $300 million when the Senate, uh, knocked out a provision which would prohibit a taxpayer from deducting the state tax, which he pays on his gasoline, and the state tax, which he pays on his license for his car.

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Now, if you knock that out which the House had done, it brings into the federal treasury an additional $300 million. So the bill now the tax reduction bill is in the neighborhood of about 11 billion. It was $11,000,000,100 million so it's now jumped up to about 11 billion 3 $400 million.

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These differences will be ironed out, and as a matter of fact, it may some of them may be changed on the floor. I'd like to get your opinion as to whether or not President Johnson is really economy minded. He seems from a standpoint of most political pundits to have taken the wind out of the Republican sales in his economy, messages not only to the Congress but also to the press.

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Well, I would say this. I think that President Johnson, without any disrespect to any president, I think President Johnson comes into this job knowing as much about the government and its various ramifications domestically. Speaking as any man who ever came to the presidency, be vice president through, came through that round orbit.

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Was he elected? Consequently, he I think he really knows that there are many instances in areas there's considerable waste and there are too many employees in some instances, and he's determined to cut it out now. I think so. The answer to your question is, I think President Johnson is genuinely interested in reducing waste and duplication and excess personnel and things of that character.

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On the other hand, I think President Johnson is committed totally committed to the program of keeping the country development and moving forward, and that we just cannot stop all government spending because to do so would take to really suddenly take too much out of our economy and throw us into a depression and However, with the tax bill coming along, which will release 11 billion so many millions of hundreds of millions out in the economy, you can then reduce the cost of the government considerably and thereby lower the amount of the deficit.

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He's going to cut the deficit in half from what it was last year. So I think that he's committed to a program of moving the country forward and recognizing that we've got 191 million people today, that it must be going forward all the time. But at the same time, he's trying to tighten up the government so that it operates more efficiently and without quite so much expense.

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Thank you very much. Senators, matters. Senators matters will be back with us next week At the same time for another factual report to the people of Florida