The MacNeil/Lehrer NewsHour

INTRO

JIM LEHRER: Good evening. In the news this Friday new government figures show the economy colling off. Jesse Jackson got an audience at the State Department, but not with President Reagan. Congress finally ended a two-year arm wrestle over a new bankruptcy law. And Argentina negotiated a deal on a part of its foreign debt problem. Robert MacNeil is away tonight; Charlayne Hunter-Gault is in New York.Charlayne?

CHARLAYNE HUNTER-GAULT: Tonight we have a special report from Miami on the mixed reactions and possible black-hispanic fallout from Jesse Jackson's latest diplomatic coup. An expert on bankruptcy tells us how the new bankruptcy bill will affect consumers, lenders, other businesses and labor. Also, from Argentina, special correspondent Charles Krause has the first foreign broadcast interview with the country's new president, Raul Alfonsin. Judy Woodruff takes a long look at the long career of departing Canadian Prime Minister Pierre Elliott Trudeau, and we find out more about the whys of the new PG-13 movie rating with the man who oversees the system.

LEHRER: The economy is slowing down. The government's famous indes of leading economic indicators fell 0.1% in May, the Commerce Department announced today. White House spokesmen and others expressed the hope it means the economy is not overheating, and thus upward pressure may now come off of interest rates. Interest rates were the villain in another set of Commerce Department figures out today -- home sales fell for the third straight month in May. The report also said for the first time ever the average price of a new house is now over $100,000. Wall Street is the most avid reader of government economic statistics, and its reaction today was mixed. The Dow Jones industrial average was up 5.85 points and closed at 1132.40.

Charlayne?

HUNTER-GAULT: The Supreme Court today settled a dispute that began a year and a half ago, when a group protesting in behalf of the poor tried to stage a sleep-in in Lafayette Park across the street from the White House. The Court ruled, seven to two, that the Park Service had a right to say that demonstrators could only pitch tents in the park but not sleep in them. In effect, the Court said, the government's interest in maintaining the park outweighs whatever constitutional rights the demonstrators might have in using sleep as a form of expression. The majority opinion, written by Justice Byron White, said the government has the power to keep the parks attractive and available to the millions of people who wish to enjoy them. The minority view, written by Justice Thurgood Marshall, said the decision bolsters a bureaucracy that has shown itself to be hostile to citizens' rights to a free expression under the First Amendment. The group that tried to sleep in the park was the Community for Creative Non-Violence, which works to provide shelter for homeless people in Washington. The group's leader, Mitch Snyder, said they would defy the Supreme Court ruling.

MITCH SNYDER, Community for Creative Non-Violence: It's very hard to bring the presence of people who eat out of garbage pails and sleep in rat-infested alleys into the hallowed halls of justice. There is so much insulation and isolation in a place like the Supreme Court that we are deeply grateful that there were two justices that are still in touch enough with their own humanity to recognize that homeless people cannot, in fact, respond in the way that people who have homes and jobs and cars and well-fed stomachs think that they can. They've just traded off neatness for the First Amendment, and that's a real bad trade. As an American citizen, I don't much appreciate that, and we will invite homeless people as part of demonstrations, as we have in the past, to sleep in this park, and in so sleeping to face arrest. Maybe then people will take more notice of them.

HUNTER-GAULT: Snyder said when the Supreme Court starts its new term in October his organization will begin a month of civil disobedience, including sleep-ins in Lafayette Park.

Jim?

LEHRER: This was Jesse Jackson's day in Washington. Fresh and flush from having returned late last night with 48 freed prisoners from Cuban jails, he made the rounds today, the early-morning network television programs, then a series of meetings on Capitol Hill and elsewhere.But the big one did get away. Both President Reagan and Secretary of State Shultz said no thank you to Jackson's request for a meeting. So he had to be content with Undersecretary of State Michael Armacost. And afterward Jackson confessed disappointment.

Rev. JESSE JACKSON, Democratic presidential candidate: I think it's unfortunate that I have very relevant and current information that they're not privy to, and I would like to share it in the best interests of our nation and in the best interests of peace. Much of their information is dated. In the case of Cuba, for example, we have interests that are too broad and contacts that are too low to make the kind of change that we should make. After 25 yearsof cold-war behavior and hot-war rhetoric and bad relations, it's time to go another way.

LEHRER: But Jackson said the State Department had responded to Castro's offer for negotiations on the return of undesirables who came to the United States in the 1980 Mariel boatlift.

Rev. JACKSON: I'm glad to announce that already on the Mariel prison situation the administration has responded. It's offered two dates in July to begin meetings on the Mariel prison situation. I hope that President Fidel Castro will respond to these two dates and do so immediately.

LEHRER: Jackson is no hero at the State Department. After he left the premises today, department spokesman John Hughes said the prisoner release did not represent a change in Cuban policy or attitude, and Hughes took Jackson to task for criticizing U.S. policy during the trip.

JOHN HUGHES, State Department Spokesman: The tradition has been not to criticize the United States from foreign platforms, especially from hostile countries, from countries hostile to the United States. So I suppose that some of the Reverend Jackson's remarks about the United States government, particularly those made in Nicaragua, may raise questions as to whether what he did was in the tradition that has long prevailed.

LEHRER: Jackson declined to say anything at all today about the Lewis Farrakhan matter. He said his written statement yesterday deploring the Muslim leader's anti-Israel statements was all he had to say about it. He left Washington for Chicago lat this afternoon for a convention of his rainbow coalition group there tomorrow.

Charlayne? Miami Looks at Jackson

HUNTER-GAULT: In Miami, home of one of the largest concentrations of Cubans outside of Cuba, the feelings about Jesse Jackson's latest diplomatic effort were running deep on all sides. Special correspondent Elizabeth Brackett was in Miami today when the first group of former prisoners returned home.

ELIZABETH BRACKETT [voice-over]: It was a new round of tears and hugs and joy.The suddenly famous Cuban and American former prisoners were greeted in Miami by family, friends and an outpouring of affection from the Miami Cuban community. But while Cubans here were thrilled at the return of the prisoners, there were few cheers for the efforts of the Reverend Jesse Jackson. Instead, many Cubans worried that Jackson had only made the still-despised Fidel Castro look good.

LUIS GOVANTES, Miami Cuban: Jesse Jackson did something very good for the prisoners, but he was the vehicle for Castro, for a big Castro propaganda around the world, and really it is against the freedom and against the United States what Jackson did. I believe Jackson is, in a way, a traitor to the United States.

BRACKETT [voice-over]: Criticism of Jackson's efforts have poured into Cuban radio stations in Miami. Radio news director Tomas Garcia Fuste says Jackson has hurt, not helped, the effort for world peace.

TOMAS GARCIA FUSTE, news director, WQBA Radio: I don't think that he looking for peace. He looking for -- he's helping the international communists is what he's doing. I don't say that he be a communist or not, but he help the communists.

BRACKETT [voice-over]: On the street in Miami's Little Havana the sentiments were the same. There was no rejoicing here, and several branded Jackson a brother of Castro.

[on camera] While there was little praise for Jackson in the Cuban community, here in the nearby black community, Jackson's release of the prisoners has created new excitement and additional pride in Jackson.

[voice-over] Here in the Green and Ford barbershop in downtown Miami, barber Clayborn Leslie says Jackson's success has made the popular leader even stronger.

CLAYBORN LESLIE, barber: Oh, they've always thought Jackson was great, and even now, as a black man, I'm awfully proud of him. I really am. Sure.

EVERETT FORT, barber: Well, at least he feels you've got to communicate with people. If you can't communicate there's no getting along at all. So at least he began, you know, places he's been, they are communicating.

BRACKETT [voice-over]: But long-time civil rights leader John Due worries that the already tense relationship between the black and the Cuban communities in Miami could grow worse as a result of the Jackson trip.

JOHN DUE, president NAACP Miami chapter: What he has done is to raise to a conscious level that there is a problem of understanding and communication, and there is a need therefore to relate to this problem and respond to it. Otherwise there might be a permanent misunderstanding and conflict.

BRACKETT: Right now what is the misunderstanding?

Mr. DUE: Again, the black community not understanding exactly why the Cuban community feels as it does about the dictatorship and, number two, there is a need for the Cuban community to understand the concern of the black community to be more assertive about all affairs in society, and not just be concerned about, you know, so-called black problems.

BRACKETT [voice-over]: In the long run, says Due, Jackson's trip may be regarded as more of minus than a plus. But today it was hard to refute the relief and the joy of families and a community reunited.

LEHRER: That report by Elizabeth Brackett.

The Congress was busy today on the debt front. The House and Senate passed an urgent $53-billion increase in the federal debt limit, pushing it up to $1.57 trillion. That makes it legal now for the government to borrow that much to pay for existing programs, and, as a technical, practical matter, prevents the government from running out of money in mid-July.

Charlayne Bankruptcy Reform

HUNTER-GAULT: After years of trying, Congress today approved a major overhaul of the federal bankruptcy system. The legislation, which President Reagan is expected to sign into law, is expected to have a major impact on consumers and businesses. On the consumer side, the proposed law limits the consumer's ability to avoid paying debts by declaring bankruptcy. That was seen as a victory for the credit industry, which has long argued there should be greater penalties for declaring personal bankruptcy. The proposed new law would also restrict an employer's right to terminate union contracts by filing for bankruptcy, a provision that reverses a recent Supreme Court ruling. To find out more about the impact of the bill, we talk now with Richard Levin, a bankruptcy lawyer who helped draft the 1978 Bankruptcy Reform Act when he served as counsel to the House Judiciary Committee. He joins us tonight from Los Angeles, where he is based.

Mr. Levin, this bill seems to have a little something for everbody in it, isn't that right?

RICHARD LEVIN: Well, I think that's what happened.

HUNTER-GAULT: Well, all right, let's start wich the most controversial part of the bill, which was the business with the contracts and labor. What effect is it going to have on labor?

Mr. LEVIN: It's going to help the labor unions a little bit, when a company gets into financial trouble. Under the laws the Supreme Court decided in February of this year the company in financial trouble, once it files a bankruptcy petition, could abrogate its labor contracts unilaterally upon the filing of the petition. The Court would then hold a hearing later in the case -- could be early in the case, but it could be later, as happened in Continental Airlines, deciding whether the abrogation was proper or not. Under this bill, the company may not act unilaterally. The company must go to the court first for permission before it can make any changes in the labor contract, and the bill also requires that the company negotiate in good faith with the union before going to the court to request changes.

HUNTER-GAULT: Well, what does that mean for a company that is in really dire financial straits? I mean, are they going to have to hold on until a long exhaustive series of hearings, or is there any special relief or what?

Mr. LEVIN: There are time limits set forth in the bill. They -- the hearing is supposed to take place within 14 days after the company asks the court for relief. And it can be extended for an additional seven days, and then the court has to make a decision within 30 days after the hearing. If the court doesn't act, then the company can then act unilaterally.

HUNTER-GAULT: Are there special circumstances now that a union contract could be terminated that didn't exist before?

Mr. LEVIN: No, in fact, Congress has tightened the standards a little bit. The standard enunciated by the Supreme Court in February looked only to a balancing of the equities between the union and the company. In this bill the court must not only balance the equities, but it must also find that the equities clearly weigh in favor of the rejection, and the court must also take into account the sacrifices being made by other creditors and the company so that the union does not bear a disproportionately high share of the burden of the company's failure.

HUNTER-GAULT: Well, what about business? I mean, what does it get out of this?

Mr. LEVIN: Well, it gets more than it would have gotten under some proposals that have been proposed in the Senate in recent weeks which would have been -- which would have given the unions far greater leverage in reorganization cases. What this does for business is allow it to reject a labor union contract if the equities are in favor of the rejection, which was the prior law. It just requires the business to be a little more solicitous of the union's bargaining position and to spend some time bargaining with the union before it can act unilaterally. So bankruptcy relief still is available; it's just a little bit more difficult, and it'll give some additional protection to labor.

HUNTER-GAULT: So we won't be seeing anymore cases like the Continental Airline, which, as you indicated, went ahead and filed without any consultation or any notification?

Mr. LEVIN: You won't see a case like that where there -- well, as I understand Continental, there was negotiation before the filing. I don't know the extent of the negotiation, but what you won't see is a unilateral action by a company. The company is going to have to spend some time talking with the union, either shortly before the filing of the bankruptcy case or shortly after to work out the contract terms, but bankruptcy will still be available for that purpose.

HUNTER-GAULT: All right, and what about personal bankruptcy? It's going to be much more difficult, isn't it, to file for personal bankruptcy?

Mr. LEVIN: Well, here the consumer finance industry that pushed for these amendment was not as successful, I think, as labor wasin the amendments they got. The law is tightened up a little bit over what it was in 1979, but not by such a significant degree. What the law now requires is that before a consumer file a straight bankruptcy case, where he gets release from all of his debts, he has to at least be advised by the clerk of the court and by his attorney of the availability of a repayment plan under Chapter 13 of the bankruptcy code whereby he can, over three years, pay back all or a portion of his debts to his creditors.

HUNTER-GAULT: But doesn't it also say that the courts now have to take into consideration a person's ability to pay? I mean, in the past you could declare bankruptcy even if you could pay the bills, couldn't you?

Mr. LEVIN: That's right. The consumer credit industry wanted to see an absolute requirement of inability to pay put in the statute as a threashold condition for filing a personal bankruptcy. The compromise that was ultimately reached was that the court could dismiss a consumer bankruptcy case if it found that the filing of the bankruptcy petition constituted a substantial abuse. And though the statute itself doesn't say so, I think the legislative history makes clear that the substantial abuse concept directs the courts to take into account the consumer's ability to pay.

HUNTER-GAULT: Why did the Congress feel it necessary to put in a provision that said that the court can hold a consumer liable for debts amassed in the months before he declares -- he or she declares bankruptcy?

Mr. LEVIN: Well, the retail credit industry, in particular, was concerned that consumers were -- it's called loading up. They were loading up their debts by using their charge cards for retail purchases shortly before bankruptcy, and then filing bankruptcy, oh, within weeks later and was getting release from those debts. So Congress has now said that -- has limited what the consumer credit industry wanted here, but has said that if the consumer purchases luxury goods worth more than $500 within 40 days before bankruptcy on credit, or takes a cash advance of $1,000 or more within 20 days before bankruptcy, then that debt will -- it's presumed that that debt was incurred with the intention of filing bankruptcy, and it will not be released by the bankruptcy, but the consumer can overcome that presumption if he can prove that something happened between the time he incurred the debt and the time the bankruptcy was filed that changed his circumstances and he didn't really have the intention of filing bankruptcy at the time he incurred the debt.

HUNTER-GAULT: It sounds like a lot of weight on the consumer.

Mr. LEVIN: A lot of weight on the consumer, and it's unlikely that many consumers will be able to prove that. So it's almost an absolute rule, but not quite absolute.

HUNTER-GAULT: Briefly, could you just describe to me what significantly different impact there's going to be on the lenders?

Mr. LEVIN: Well, I'm not sure there will be a lot of impact. As I read the bankruptcy filings over the last three or four years when there has been such an explosion in bankruptcy filings, I think most of it is attributable to the economy and interest rates and unemployment, and it's not really attributable to the new bankruptcy -- well, no longer new, but the 1978 bankruptcy law --

HUNTER-GAULT: Which was viewed by many people as too permissive.

Mr. LEVIN: Exactly. And I think the bankruptcy filings are dropping off a little bit now, not back to the pre-1980 level, but they are dropping off a little bit --

HUNTER-GAULT: As a result of the improvement in the economy?

Mr. LEVIN: I believe so. And I think that these changes will give lenders a little bit of benefit, but since the standards -- the substantial abuse provision, for example, where the court can dismiss the case only if there's a substantial abuse, will not affect too many cases. I think it will be a very small percentage.

HUNTER-GAULT: All right, well, we'll be watching that along with, I'm sure, yourself, Mr. Levin. Thank you for being with us.

Mr. LEVIN: Thank you.

HUNTER-GAULT: Jim?

LEHRER: A new union for air traffic controllers was officially born today. It is called the American Air Traffic Controllers Council and will be affiliated with the AFL-CIO and the American Federation of Government Employees. The first step, according to union officials, is to try and sign up members to a nationwide organization drive. If that's successful, the new union would replace the one which disappeared three years ago after the strike that led to a mass firing of controllers by President Reagan.

Still to come tonight on the NewsHour, an interview with the new president of Argentina, a profile of the outgoing prime minister of Canada and an explanation of the new movie rating PG-13.

[Video postcard -- Prescott, Arizona] Argentina: New President Talks to Us

LEHRER: Argentina averted financial disaster today by negotiating a last-minute deal with its foreign creditors, mostly American banks, to whom $43.6 billion is owed. The deal was to pay overdue interest on those loans. But the country's overall money problem is not yet solved, and it is only one of several on the list of Argentina's new and democratic elected President Raul Alfonsin. Our special correspondent in Latin America, Charles Krause, is in Buenos Aires now, and this afternoon sent us by satellite an interview he did with President Alfonsin, his first for foreign broadcast since his election in November, 1983.

CHARLES KRAUSE [voice-over]: The interview took place in the Casa Rosada, the presidential palace in Buenos Aires. As of noon, President Alfonsin still did not know if the U.S. and European banks had accepted Argentina's latest proposal.

RAUL ALFONSIN, president of Argentina [through interpreter]: We believe Argentina has given proof of its decision to pay. It has shown it is willing to make an extraordinary effort to fulfill its commitments, and we are sure that this attitude is going to be understood perfectly by the banks, and we are also interested in the people of the United States.

KRAUSE: Mr. President, what has Argentina offered? What's on the table?

Pres. ALFONSIN [through interpreter]: We are trying to solve the problem of the debt line and to put if off for three months more with a payment by Argentina of $225 million, a loan from the banks of $125 million guaranteed by our deposits in the Federal Reserve.

KRAUSE: Why should you give in to the banks? Why not try and go it alone and be tougher?

Pres. ALFONSIN [through interpreter]: We want to be firm. I repeat, we want to keep our commitments. Unfortunately, we realize we are living in a world that I believe needs a fundamental change. I believe that a countryman of yours spoke about anticipatory changes which are necessary to avoid catastrophic changes. I think we are going through a very difficult stage. Finance cannot have a privilege over production neither in a country nor in the world. I don't think either that we can make debtors subject to the comings and goings of internal politics which are made accordingto the deficits, deposits and dollars, making a kind of reverse Marshall Plan with a purpose of overcoming the problem of deficits. All this goes against the chances for economic development of developing countries, and this gets even worse if we think of our difficulty to sell products abroad. You know that when we have opened up our economy, the economies of the central countries were very pleased. But they did not open up their markets. But we did do so. But we cannot sell our products either in Europe or in the United States. The possibility this country and other developing countries have of paying is related to the chance we are given to selling our products abroad.

KRAUSE: As you know, there have been riots in the Dominican Republica, in Brazil, and there has been social unrest in a number of Latin American countries, including Argentina, where there are strikes almost every day. Can your government survive if you have to take the austerity measures that the IMF and the banks are asking you to take?

Pres. ALFONSIN [through interpreter]: Democracy is here to stay, but anyway we will have serious social unrest, and we are unwilling to cause that. But we must take into account there is one solidarity northern countries show us with great nobility, and that is the one related to human rights. But although I thank them for it, I call it postmortem solidarity because they don't help democratic countries at the right moment. They put pressure on them to have tough economic policies which lead to convulsion in those countries because people demand what they need. As you know, we are coming out of an enormous crisis. We have made an adjustment in our economy. Before our productive apparatus was destroyed. We have made a foreign debt, which is enormous, which has no capitalized us. Quite the opposite. We are trying to keep our commitments of authoritarian governments because that's the way it has to be, because that's what lawful, because Argentina is one of the few countries who has never stopped paying because of a one-sided decision. This is an Argentine tradition, and we're going to do so with the effort of our people.

KRAUSE: Mr. President, if you reach agreement with the banks today, is this the end of Argentina's foreign debt problem?

Pres. ALFONSIN [through interpreter]: If we came to an agreement, that would not be the end of the crisis. We have to negotiate, first of all, we have to continue with the talks so that our letter of intent to the IMF is accepted.Then we will have to develop negotiations such to obtain an agreement between the Fund and all the other banks.Then we will have to go to the Club of Paris, because that's the way the country has been handed over to us. We have to try and solve the problems that we have inherited. If we do not come to an agreement, we have thought of all the other alternatives, but let me think that we are going to solve our problems and reject for the time being the alternative, that there should be such shortsightedness as to prevent us from keeping our commitments.

LEHRER: Several hours after correspondent Krause spoke with the Argentinian president, a compromise agreement was reached on the payment of the overdue interest.

Charlayne?

HUNTER-GAULT: On a completely different note, New York is about to become the first state in the country to enact its own law to control acid rain. The state legislature completed action today on a bill that will require power plants and factories to reduce their emissions of sulfer dioxide by 30% on a statewide basis over the next eight years. The measure went to Governor Cuomo, who has indicated he will sign it. Sulfur dioxide is considered the leading cause of acid rain. However, utility companies lobbied to defeat the bill, which is estimated to add as much as $3 to an everage utility bill. Canada's Departing Leader

HUNTER GAULT: Pierre Elliott Trudeau, Canada's prime minister for the past 16 years, officially steps down tomorrow. He'll hand over the reins of authority to the new leader of the Liberal Party, John Turner. But Trudeau is not likely to be soon forgotten. Both friends and foe alike say that he gave Canada a true sense of nationhood, Canadians a greater self-confidence as a people. That, in turn, they say, may have permanently changed Canadian-American relations for the better. Trudeau himself has refused to give any interviews since his decision to retire on February 29th, but through the eyes of both Canadians and Americans who knew him and worked with him, Judy Woodruff looks back over Trudeau's stewardship, one that goes back to Lyndon Johnson and Charles De Gaulle, to the Vietnam War and Beatlemania, to Canada's Trudeaumania.

ANNOUNCER: And now, ladies and gentlemen, that dominant figure, the prime minister of Canada, the Right Honorable Pierre Elliott Trudeau. [crowd yelling "Go, Trudeau, go Go, Trudeau, go!]

JUDY WOODRUFF [voice-over]: April, 1968. First, Canada's Liberal Party, then the Canadian electorate swooned for a young justice minister who just two years earlier had been an unknown law professor. He was a rare breed in Canadian politics. His predecessors had been older, proper, even stodgy, the way the British Empire liked them.

JAMES SCHLESINGER, former defense secretary: By and large Canadians are far more reticient, filled with self-restraint to a point that they seem to colorless. Trudeau is a remarkably colorful person, and he picked up that flair partly from the United States.

WOODRUFF [voice-over]: Trudeaumania, or at last Trudeau curiosity, overflowed. In the United States, Pierre Elliot Trudeau became a jetset celebrity, squiring actresses, being seen in the right places with the right people. Former Defense Secretary James Schlesinger is an American admirer.

Mr. SCHLESINGER: In his early years he quite consciously was following in a groove that had first been chiseled by President Kennedy.

ALAN FOTHERINGHAM, Canadian columnist: The thing about Trudeau, if John Kennedy had not been invented, Pierre Trudeau would not have been invented.

WOODRUFF [voice-over]: Canadian news columnist Alan Fotheringham is a long-time Trudeau-watcher and critic.

Mr. FOTHERINGHAM: Six years later, along comes a guy in Canada who is not only all those things -- rich and dashing and great, etc. -- but is bicultural and bilingual.And so we though we had a better Kennedy. And Canadians were very proud of him in that sense.

PIERRE ELLIOTT TRUDEAU, departing Prime Minister of Canada: There's a limit to vanity, isn't there?

WOODRUFF [voice-over]: He was spirited, irreverent; he had flair and style. He was cool on television. And if he seemed to view it all with detached amusement, it was because he was amused. There was another side, the keen intellect, the debater, the questioner, the fighter.

Prime Min. TRUDEAU: There's a lot of bleeding hearts around that just don't like to see people with helmets and guns. All I can say is go on and bleed.

CRAIG OLIVER, Canadian television: Trudeau's the kind of guy who would walk down the street and cross the street to join a fight. I remember being on an Arctic canoe trip in which he pulled up his canoe to chase six grizzly bears across a hill, followed closely by a man with a gun, not sure who he was going to rescue from whom.

Mr. FOTHERINGHAM: Well, that's Trudeau.He boasts that he never lost a fistfight as a boy and he's never lost a debate as a man.

ALLAN GOTLIEB, Canadian Ambassador: He is a sportsman, Trudeau. He likes -- he's very competitive in whatever he does. So he likes to ski. He likes to -- he likes to engage in almost any form of -- he likes to canoe. He likes to test his limits all the time.

WOODRUFF [voice-over]: Two developments tested the limits of Canadian-American friendship during the Trudeau years -- a new sense of nationhood and the desire for an independent foreign policy.

Amb. GOTLIEB: The driving political force behind his career has been building our nationhood. Now, that, to an American that is a very hard point to get across. It sounds corny. They say, "What do you mean, nationhood? I mean, come on!" When is the last time you Americans talked about your nationhood? Well, it's a point -- you know, you might don't want to hear this, but I say this once in awhile. You know, we Canadians, we talk about our nationhood. We talk about our unity, we talk about our national identity.

Prime Min. TRUDEAU: These people in Quebec and in Canada want to split it up; they want to take it away from their children; they want to break it down. No! That's our answer.

WOODRUFF [voice-over]: Trudeau was obsessed with keeping his home province of Quebec in the Canadian confederation. He fought for unity and for an official French-English bilingualism.

Prime Min. TRUDEAU: Voulez-vous cesser --

WOODRUFF [voice-over]: He won, but at a price.

STEPHEN CLARKSON, University of Toronto: His whole career was oriented towards keeping Quebec in the Canadian federation so that external affairs were really secondary to him. He had no strategy for dealing with the United States. He didn't come to power to try and do something to the United States or try to do something for Canada in relationship to the United States.

Prime Min. TRUDEAU: We're a different people from you, and we're a different people partly because of you. Living next to you is, in some ways, like sleeping with an elephant.

WOODRUFF [voice-over]: Trudeau proceeded cautiously at first with the Americans. Despite philosophical differences, Trudeau maintained propriety in his relations with U.S. presidents, growing bolder with his own seniority. There were niceties with Nixon, friendship with Ford, congeniality with Carter, reticence and then a row with Reagan.

Mr. FOTHERINGHAM: Trudeau has the attention span of a hummingbird, and this inconsistency irritated Washington, and eventually Washington did not take him seriously. And under Reagan I don't think Washington takes Trudeau seriously. They're irritated at his poking and needling at the giant, but they don't take him seriously because he doesn't stick at issues.

RICHARD GWYN, Trudeau biographer: I don't think Trudeau ever got the length or the reach of the United States. He's a European, essentially. He's European; he's an intellectual, he's very sophisticated. I think he had a certain European view of the United States, which is a polite way of saying I think he looked down a bit on the United States.

Mr. SCHLESINGER: He expressed Canadian views frequently with a pungency that we resented, but it is part of a new assertiveness on the part of Canadians, and we have come to accept that. That has altered the relationship.

WOODRUFF [voice-over]: One of the first targets of Canada's new assertiveness was its energy industry. During the 1973 energy crisis, Canadians discovered that much of their oil industry was owned by Americans. Over howls of protest from American investors, the government moved to Canadianize the industry, to regain ownership or at least control of oil production.

JIM COUTTS, former Trudeau aide: The general reaction is, "What the hell's going on up there? These are our friends, I invested my money. It looked like a good investment. We were getting along well, we were making products. Now what's all the fuss about?"

WOODRUFF [voice-over]: Jim Coutts was Trudeau's chief of staff during the energy crisis years.

Mr. COUTTS: There are some who feel -- I share the feeling -- that in the strategic industries, in the strategic companies, strategic manufacturers, producers of goods and services, that there ought to be a dominant stake which is Canadian owned.

WOODRUFF [voice-over]: Economic nationalism begot cultural nationalism.

Mr. SCHLESINGER: They're continuously being bombarded with American magazines, with American television shows. Most of the Canadian population is within 50 miles of the American border. There is no way that they can escape from the United States.

WOODRUFF [voice-over]: With so many Canadians within range of American broadcasters, television and radio restrictions were imposed. Trudeau later made light of these rules changes in a 1977 speech to the U.S. Congress.

Prime Min. TRUDEAU: Sometimes they lead to chafing. Yet, how civilized are the responses. How temperate the replies. We threaten to black out your television commercials, you fire volleys of antitrust proceedings.Such admirable substitutes for hostility, Mr. President, Mr. Chairman.

Mr. GWYN: I don't think he reacted very well because in the nicest of ways you keep thinking we're really Americans, we're sort of nice Americans who've come to live up here in the North, and we're not. We're Canadians. And so in the nicest way, Americans, it seems to me, get offended when Canadians do a nationalist thing and wave the flag.

WOODRUFF [voice-over]: The American government also takes offense when Canada's foreign policy diverges from ours.Canadian prime ministers all want to influence the U.S. Trudeau wanted to embellish the role.

Prime Min. TRUDEAU: As friends we have a duty to hold up the looking glass in which you see yourselves. So I want today to discharge one of my responsibilities and hold up the looking glass for a short while.

A country can be influential in the world by the size of its heart and the breadth of its mind, and that's the role that Canada can play.

WOODRUFF [voice-over]: Trudeau applied his heart, mind and sometimes loud voice to issues that troubled him. For a time he tried to reduce Canada's troop commitments to the North Atlantic alliance, but eventually backed down. While flattered to be included, he scorned the Western summits for doing little more than approving pre-cooked communiques. Trudeau preferred to debate. He did not subscribe to the Communist conspiracy theory, and he disagreed with the U.S. on Central America. It was a new outspokenness that concerned a new administration. In 1981 Ronald Reagan made his first trip as president outside the U.S. He chose Ottawa. He was greeted by jeering acid rain protestors. The President reacted good-naturedly.

Pres. RONALD REAGAN: I think maybe we imported them. I think they're ours.

WOODRUFF [voice-over]: Trudeau's response was typically hospitable.

Prime Min. TRUDEAU: Hey, guys. When I go to the United States I'm not met with these kind of signs. You know, we -- the Americans have some beefs against us, too. But they receive them politely. Now, how about a great cheer for President Reagan? Hey, come on.

WOODRUFF [voice-over]: The formalities were cordial and helped break down the ideological suspicions each had of the other. But on Reagan's next visit to Ottawa a few months later at the economic summit, Trudeau gave the Americans fits by proposing a meeting with developing countries. It was something he had wanted for a long time.

Mr. GWYN: He really has a feel for, an empathy for the poor countries of this world. He knows them well. He went there as a student and as a young man, and he really went there. He didn't go there as a tourist. He went there barefoot, or at least in sandals and all the rest of it, and slept on the floors of huts.

WOODRUFF [voice-over]: Trudeau courted the Third World, traded with it and agitated successfully for the 1981 North-South summit held in Cancun, Mexico.

Prime Min. TRUDEAU: This meeting will be fruitful if we can use it to get to know each other better, of course, but also to see where we can persuade each other to --

WOODRUFF [voice-over]: The new American president gamely went along, and even held his own at the conference table. But some American officials were irritated with Trudeau.Others praised him for building bridges between rich and poor. In Canada his critics insist much of it was simply for publicity.

JOHN CROSBIE, Conservative member of Parliament: I think that Trudeau can be faulted for being in the forefront of expressing views and gaining publicity and then not following through. I mean, he never followed through on Cancun. His peace initiative, you know, the last six months of his administration here, again, great publicity for Trudeau, and the Canadian public love it. They think that Canada is at the forefront of the peace movement.But totally ineffective.

Prime Min. TRUDEAU: And with some pipsqueak in the Pentagon criticizes our peace initiative the press wants to say, "Oh, look, they don't like what we're doing."

I'm not asking the superpowers to love each other or even to trust each other, just to talk to each other because they have an equal interest in preventing the calamity that unfortunately has ceased to be unthinkable.

I for one think that it is in that direction that the superpowers must go. They must try and find some way of stop shouting at each other when the world is teetering on the brink of disaster and atomic war.

WOODRUFF [voice-over]: After sharing the plan with his own House of Commons, he shared it with the world. He took it to Western leaders; he took it to East Bloc leaders, to Soviet President Chernenko. He was received everywhere. There were nods of assent. The Americans were a trifle condescending.

Pres. REAGAN: We wish you Godspeed in your efforts to help build a durable peace.

Mr. SCHLESINGER: It was a cry from the heart. It was a moral gesture Politically it was an uphill fight at best.

WOODRUFF [voice-over]: It had been a gamble. It had been ambitious. He had cashed in on 16 years as a world leader. Trudeau came back empty-handed, but the Chicagobased Albert Einstein Peace Prize Foundation apparently felt otherwise. This week they awarded Trudeau $50,000 for his efforts and urged him to continue them in private life. Canada's Liberal Party bid adieu to Pierre Trudeau a few weeks ago, with fitting accolades to his years of service.

SINGER: "Guess it's just the way you always dreamed of, thank you, Mr. Trudeau."

PAUL ANKA [singing]: "The peerless Pierre extraordinaire, he did it his way."

WOODRUFF [voice-over]: And, once again, the Liberal Party for just a few hours felt that old familiar emotional surge, that feeling they once called Trudeaumania. [convention crowd yelling "Go, Trudeau, go. Go. Trudeau, go!]

HUNTER-GAULT: It looks as if there's been some major movement on arms control talks between the United States and the Soviet Union. Late this afternoon the White House responded positively to a Soviet Union. Late this afternoon the White House responded positively to a Soviet offer made earlier in the day to begin talks on banning anti-satellite weapons in space. The white House said the U.S. is willing to meet with the Soviets for formal discussions on anti-satellite weapons. A U.S. official also said the U.S. is ready to discuss arrangements for resuming other nuclear arms control talks. Earlier today the Soviet news agency Tass carried a statement that the talks could be held in Vienna, Austria, this September, pending that country's approval. Late this afternoon National Security Adviser Robert McFarlane said the administration is prepared to meet with the Soviet Union in September at any location agreeable to the Soviet Union and the government of the country where the meeting is held. McFarlane also said, "We take it seriously and we intend to be there."

[Video postcard -- Jerome, Arizona] PG-13: Rating the Movies

LEHRER: Now, on to the U.S. movie industry which produces its latest extravaganza Sunday, a new rating designation called PG-13. It is designed to solve a public relations problem caused mostly by "Indiana Jones and the Temple of Doom," a most successful movie of summer, but also one of extreme and gross violence. This film clip, for instance, shows the hero rescuing the heroine, in classic movie fashion. No problem there, but not shown in this promotion clip is another scene of a human heart being torn from a live body and several others even more extremely and grossly violent. But the rating for "Indiana Jones" is PG, "Parental guidance suggested, some material may not be suitable for children." Critics hollered that's ridiculous, it should have been rated R, restricting attendance by those under 17 to those accompanied by an adult. But the movie industry didn't want take kind of thing because it would cut out much of the lucrative teenage market. So PG-13 was born. It's a rating which says, in its fine print, "Parents are strongly cautioned to give special guidance for children under 13; some material may be inappropriate for young children." Jack Valenti, president of the Motion Picture Association of America, is here to explain. Mr. Valenti, your critics say this is a sham. Instead of really tackling the question of violence in movies, you've just come up with a new labeling system.

JACK VALENTI: Well, it's a free country. Anybody can make any criticisms, and I'd take mild issue with you. This rating wasn't put in to retain the "lucrative market for teenagers." We've been thinking about a PG-13 for two or three years. In all honesty it was hastened not only by the advent of "Indiana Jones" but by the statements made by Steve Spielberg, who is a very prestigious filmmaker. The fact is that I had been opposed to a change. I think a fragilesubjective system really can change and accept more categories. But I seem to be Horatius at the bridge and all the exhibitors and producer-distributors wanted to do it, and I've gone along with it. And I think it could have use to parents because what it's aimed is giving parents more cautionary warning about films that maybe their younger children might not or should not see. But that's a parental decision, Jim.

LEHRER: Okay. But what does PG-13 mean?

Mr. VALENTI: It means a film that is probably has a little more violence, a little more language, a little more sensuality than a PG film, but not as much as what we'd call an R film.

LEHRER: Would it cover tearing the human heart out of a live body? Would that be a PG-13?

Mr. VALENTI: I saw that with a number of children. Children realize things that grown-ups don't sometime in that anytime you tear a live heart out of a human body and it still lives, you know that that's a little make-believe going on. That scene was a little more violent, I think, than PG, but that scene wouldn't have put it into R, by no means.

LEHRER: Well, but you say this is going to give guidance to parents, parents who now -- "Indiana Jones" is the one that started this. The question is, would "Indiana Jones" be a PG-13 --

Mr. VALENTI: Absolutely.

LEHRER: It would be a PG-13?

Mr. VALENTI: Yes, of course.

LEHRER: Okay, well, who's going to make the decision whether it's a PG-13 --

Mr. VALENTI: We have a rating board in California that's composed of seven people. They're neither gods nor fools; they're intelligent people who like movies and who put themselves in the shoes of parents every time they make a rating, and they are parents. They understand it. This is not to mean they are flawless or they don't make mistakes. Of course they do. You and I would disagree on a rating, and so any subjective decision like rating a movie is bound to cause a lot of people disagreements. But keep in mind what the rating system is all about. We don't rate quality or lack of quality. We're trying to give a little information to parents so they can make a family decision about what movies their young children ought to see. That's all we purport to do.

LEHRER: But your term "little information." The critics say why don't you give a lot more -- why don't you want to give more information? Why just a little information?

Mr. VALENTI: Well, suppose I told you that "Indiana Jones" had violence in it. That wouldn't satisfy you.You'd go and say, "But you didn't tell me about the heart coming out of the man's body." How much space is there is an ad to talk about this? Where can you give all this information? The only information you can find out is to see the movie yourself, ask a neighbor who has seen it, read the review, listen to Jim Lehrer on television when he sounds off a little bit on movies --

LEHRER: I don't do that.

Mr. VALENTI: -- talk to theater owners. That's the way you find out. How do you find out about what books your children are reading? How do you find out what television shows they're seeing? How do you find out what pre-recorded cassettes they are watching? There is no risk-free environment, and every parent has a responsibility to monitor the social conduct of his child.

LEHRER: Are you suggesting, are you saying that there is no connection between the new PG-13 and the desire of the movie industry to make some money on its movies rather than go to the R?

Mr. VALENTI: Oh, I think that this probably will cost some money.

LEHRER: In what way?

Mr. VALENTI:Well, I think a lot of parents will see PG-13 as so sternly cautionary that they won't let their young children go.

LEHRER: But why not just put it in an R? Why was there objection --

Mr. VALENTI: I'll tell you exactly why. The theater owners had a very good point, and they said rather than make this a charade, let's be honest about it. We can monitor 15- and 16-year-olds, but you can't monitor 11- and 12-year-olds. A young child comes to your box office, an 18-year-old cashier is seeing him a ticket. He's a little gangling for his age, and she says, "Aren't you 11 or 12?" and he says, "No, I'm 13." Now, how do you establish that he's not? Children don't carry ID cards, at least my children don't. And therefore you force the child to lie. On the other hand, how many parents allow their seven-, eight-, nine- and 10-year-olds to just walk will-nilly out of the house and say, "I'm going to a movie, Mom. See you around," without the parent asking, "Well, what movie are you going to?" Maybe parents do, but if parents abandon their resonsibility, Jim, there's no rating system, no government agency that's going to salvage that child's conduct.

LEHRER: No, but I mean on the rating system specifically. Rather than create a PG-13, why don't you just rate movies like "Indiana Jones" R, say what it is?

Mr. VALENTI: Well, it's not an R. In our judgment it's not. It is in yours.

LEHRER: Now, why isn't it an R?

Mr. VALENTI: Because, in the view of the rating board, this kind of violence, which is known in the Steve Spielberg movies -- a "Raiders of the Lost Ark" kind of violence -- you see worse on television.

LEHRER: Well, that doesn't make it right, does it?

Mr. VALENTI: Well, it doesn't make it right, but how can a movie industry be more stern than television, where a five-year-old child can turn it on every night and see more mayhem on the 7 o'clock news than possibly you'd see -- the other night my children and I were watching the news and watching dead bodies in Nicaragua, for goodness sakes. I don't find -- I find that gross violence because that's real violence.

LEHRER: Well, is this the end of it from the industry standpoint as far as doing something about violence in movies?

Mr. VALENTI: Well, PG-13 is not aimed at violence. It's aimed at violence, it's aimed at the language, it's aimed at sensuality. No, it's not the end of it because it will always be people like yourself who are quarreling with this movie rating and we'll have to constantly be looking at it. I say again, though, I thought we had a pretty good movie rating before, and I think we did. I hope this will improve it, and I believe it will if parents use it in the correct fashion. If they don't, then it of course is barren of all value.

LEHRER: The president of an organization called the National Coalition on TV Violence called this today "the smallest possible gesture, and it's grossly inadequate."

Mr. VALENTI: Well, as I said, I don't know who you're talking about or what that organization is, but that's part of having a subjective rating system. Everybody loves movies; everybody's expert on movies, and we all have our judgments about it. But that's the parents' decision to make, not whoever this gentleman is or myself. I claim no expertise in telling parents how to raise their children. I don't want somebody telling me how to raise mine. I'll raise them according to my own value system -- my wife and I will do that.

LEHRER: Now this, as I said in introducing you, this goes into effect technically Sunday, but when is it goingto really matter?

Mr. VALENTI: Well, it's a date.It will affect all movies that have not gone into exhibition, that is, have not entered the marketplace. Any movie that is in the marketplace now will keep the same rating it has. Every movie that has been rated, say, in the last two or three weeks, is going to the marketplace, say, mid-July, can re-submit for a rating if they think they deserve one, and every picture after that will operate under this five-category system. My judgment is that I don't know how many pictures it will affect. I think we'll have to see how it operates in the real world before you really know. And how parents use it.

LEHRER: Generally speaking, Mr. Valenti, are you pleased with the rating system? Do you think it works?

Mr. VALENTI: Oh, absolutely. And each year we take a poll by the Opinion Research Corporation. Last September, 2,600 people were polled nationwide, and of parents with children under 17, 68% said the rating system is very useful to fairly useful in helping me guide my parents' moviegoing. Twenty-five percent said it was not useful; the rest had no opinion.Now, that's a pretty substantive argument in support because it's 1,000 more respondents than the Gallop and Harris poll use.

LEHRER: I take it you would agree with Richard Cohen, the Washington Post Columnist who wrote the other day that the problem about violence and sex in movies is with old fogies, with parents, rather than the young people. Is that pretty much --

Mr. VALENTI: Well, the rating system is not made for children. It's made for parents. And I think that's very true. I think children are more sophisticated today. My children, who grew up under the rating system, kind of laugh at me and say I'm kind of old-fashioned in my views about things, but I was quite stern with them when they were much younger. But the rating system is for parents, not for children. And if you don't have kids and you're not married -- or you're not married and you do have kids -- it's only for parents and not for anyone else. And it's only valuable to parents who use it seriously, cautiously and knowledgeably.

LEHRER: Jack Valenti, thank you very much.

Mr. VALENTI: Thank you.

LEHRER: Charlayne?

HUNTER-GAULT: Once again, the main stories in the NewsHour tonight.

There appears to be major movement on arms control talks with the United States responding positively today to a Soviet invitation made earlier today to meet in September to discuss banning anti-satellite weapons in space.

New government statistics released today show the economy colling off, prompting some hope that interest rates may come down.

Jesse Jackson expressed disappointment over rebuffs by both President Reagan and Secretary of State George Shultz, but said he made some headway at the State Department over sending back Cuban undesirables who came to the United States in the 1980 Mariel boatlift.

After a two-year struggle, Congress comes up with a new bankruptcy law.

And Argentina works out a deal on some of its foreign debt.

Good night, Jim.

LEHRER: Good night, Charlayne. And we'll see you on Monday night. Have a nice weekend. I'm Jim Lehrer. Thank you and good night.