The MacNeil/Lehrer NewsHour

MR. LEHRER: Good evening. Leading the news this Tuesday, intense fighting continued between rebel and pro-Aquino military troops in the Philippines, Pres. Bush gave his cabinet a report on the Malta summit, and former East German Leader Eric Honecker was placed under house arrest. We'll have the details in our News Summary in a moment. Robin.

MR. MacNeil: After the News Summary, can the Aquino government survive the prolonged rebellion? We have the views of former Amb. Stephen Bosworth, Author Stanley Karnow, and diplomat Paul Kreisberg. Next, European reactions to the Malta Summit, we hear from former British Prime Minister James Callaghan and former French Foreign Minister Jean Francois-Poncet, and we close with a report on the struggle for compensation for Japanese-Americans interned during World War II.NEWS SUMMARY

MR. MacNeil: Thousands of civilians including some 200 Americans remain trapped tonight by intense fighting between rebel and government forces and Manila. The attempted coup against the government of Corazon Aquino entered its sixth day with rebels still holding much of the Macati financial district. Pro Aquino troops retook some of the buildings there, but the rebels held on to several others. Buses were sent to try to evacuate tourists and other foreigners trapped in their hotels. But many of them went away empty because government and rebel leaders could not agree on an evacuation plan. The U.S. Government expressed concern for the safety of American tourists and businessmen. The White House said Pres. Bush is keeping his options open about how to protect them, and the Pentagon has contingency plans for everything. State Department Spokesman Richard Boucher said the administration has been keeping in close contact with Americans in the Macati area and with the Philippine government.

RICHARD BOUCHER, State Dept. Spokesman: We greatly appreciate the restraint demonstrated so far by the Philippine government forces in light of our expressions of concern about the safety of Americans in the area. We hope that such restraint will continue on both sides and that agreement can be reached on arrangements to safely evacuate innocent civilians caught in the area of fighting.

MR. MacNeil: Boucher said the administration did not believe that Americans were targets of the rebels, but the Associated Press quoted a rebel source as saying they might hold some Americans because of U.S. support for Mrs. Aquino. We'll have more on this story right after the News Summary. Jim.

MR. LEHRER: President Bush briefed the cabinet today on his summit meeting with Soviet Pres. Gorbachev. National Security Adviser Brent Scowcroft also talked to reporters about two post summit communications flare-ups. Scowcroft said Mr. Bush called British Prime Minister Margaret Thatcher to clarify a U.S. position on an integrated Europe. He said a Presidential statement had been misinterpreted as being a prod to Mrs. Thatcher to accept a single European currency and other unification ideas. The other problem arose over an interview with Vice Pres. Quayle that was published in the Washington Post today. Quayle said he did not believe there had been a change in Soviet foreign policy. He said it remained a totalitarian government that wants to create instability in other nations. Pres. Bush, on the other hand, said yesterday the United States stands on a new threshold of U.S.-Soviet relations that have been mandated by changes in Soviet policy. There was a photo session before today's cabinet meeting. The President refused to take any questions about a conflict with Quayle. Scowcroft told reporters that their words aside, there were no differences in the policy beliefs of the President and the Vice President.

MR. MacNeil: West Germany's foreign minister went to Moscow today to talk about the prospect of German unification. Foreign Minister Hans Dietrich Genscher met with Soviet Leader Mikhail Gorbachev and Foreign Minister Eduard Shevardnadze. He said they assured Gorbachev that while West Germany pursues its ultimate goal of unity with East Germany, both sides will keep in mind their responsibility for the security of the whole of Europe. The Soviet News Agency Tass reported that at the meeting, Shevardnadze rejected the idea of German unity, saying it could only increase turmoil in Eastern Europe. In East Germany, the former Communist Party Leader Eric Honecker was put under house arrest along with many of his former colleagues. Honecker was removed from office six weeks ago after thirty-five years as head of the Communist Party. He is under investigation for corruption. Also today, the East Berlin government eliminated visa requirements for West Germans, allowing virtually free travel within Germany for the first time since the end of World War II. East Germany also announced that it has disarmed the Communist Party militias which are based in factories throughout the country. In Czechoslovakia, one of the country's two main regions named a non-Communist dominated government today, the first one since the Communists took over in 1948. That's our News Summary. Now it's on to the Philippines rebellion, European leaders on the summit and compensation for Japanese internees. FOCUS - REBELLION IN THE RANKS

MR. LEHRER: We begin tonight with the coup attempt that won't end. Its the one in the Philippines against Corazon Aquino. She and others in her Government continue to declare it over but today 5 days after it began rebel military forces continue to hold out in a district of Manila. Two thousand Americans and hundreds of other foreigners live in the area where leading hotels are located. Several people are trapped in the hotels by their fighting. We get three perspectives on the situation there. Those of a former U.S. Ambassador to the Philippians, Steven Bosworth. He is now president of the United States Japan Foundation in New York. Journalist Stanly Karnow whose book about the Philippines "In Our Image" was published last year and former foreign service officer Paul Kreisberg who is a Senior Associate with Carnegie Endowment for International peace. He has visited the Philippines frequently and was there during last anti Aquino coup attempt in 1987 and has written numerous articles about the country. Mr. Karnow let's start with the lead question. Is Mrs. Aquino going to survive this?

STANLEY KARNOW, Journalist: I think she's going to survive it. I think that a key element in this whole story has been the American presence. And I think that the Army knows that American Aid will be forth coming if the defeat the rebels. I think most of the rebels will eventually come to heal because they know if they prevail there wouldn't be any American Military Aid for them. I think that they have been reduced to a pocket now of really hard core rebels. They should have known in the beginning, of course, that if they had succeeded American support for them would have been cut off. However, they went ahead of it probably out of some sort of desperation. So it's a long answer to your question. I think somehow she'll survive but the now the question is survive how. What has this done to her reputation?

MR. LEHRER: Do you think she's going to survive, Mr. Kreisberg?

PAUL KREISBERG, Former U.S. Diplomat: I think she'll survive until the next coup but she has been seriously wounded. This coup and her reputation and the reputation of her government is declining and I think is going to continue.

MR. LEHRER: Wounded at home as well as abroad?

MR. KREISBERG: Wounded at home Wounded in terms of her ability to attract foreign investment in to the Philippines. Wounded in terms of her ability to help bail the Philippians out of the financial distress that it is in. The country is in serious trouble and it's not at all clear that she's going to be to get it out of it.

MR. LEHRER: Amb. Bosworth what is your view whether or not she is going to make it?

STEPHEN BOSWORTH, Former U.S. Amb. to the Philippines: Oh I think she is going to make it. I think that it would be very helpful if this affair can be wrapped up rather quickly and that looks to be rather nasty. But yes I think that she can make it. I have somewhat the same view as your other two panelists. I think that it is going to require now a renewed effort by her and by her government to do more than survive and that is to become effective. I guess I am somewhat more positive in my appraisal of what the Aquino Government has done to date. I think they have made fairly substantial progress. The tragedy of this is just as the economy had began to attract foreign investments. Just as the multilateral assistance initiative was being launched this coup has occurred and there is no getting around the fact that is has been a devastating blow to business confidence.

MR. LEHRER: Stan Karnow, just as simple matter of military might and logistics why can't the Army stop this? You say that itis a small pocket left. Why can't that root them out of there and get this thing over with?

MR. KARNOW: Well, this is were the crisis right now is does the Army bring their artillery is and blast them out of the Inter Continental Hotel with the Americans eating scrambled eggs in their rooms and turning the Americans into scrambled eggs in the process.

MR. LEHRER: That's really the choice you think?

MR. KARNOW: Well, anyone who's been in a situation like this knows that city fighting and street fighting is very difficult. And certainly the United States has asked the Aquino Government to exercise restraint and I think that is inhibiting their pursuit of the rebels.

MR. LEHRER: They have the strength and the numbers to go in there and do that if they wanted to but the fall out from it would be too much?

MR. KARNOW: I think so.

MR. LEHRER: Who are these people, Mr. Kreisberg, who are the rebels? Can you describe them in some way that we will understand particularly going back to when the Ambassador was there, Amb. Bosworth was when Mrs. Aquino came in and all of that. Describe who these people are and fit them in the context of the revolution that brought her to power in the first place?

MR. KREISBERG: In the first place, we're not absolutely sure who all the leaders are. They are primarily military men. They are not members of the Philippine constabulary. The Philippine armed forces are basically divided into those two categories and they are young, mostly in their 30s and they represent a group of idealist essentially lower middle class.

MR. LEHRER: Idealistic but no ideologues?

MR. KREISBERG: Not ideologues. There is almost no ideology there. There is nothing that they want essentially except to have a strong Philippines. A year ago the President of the Philippine Defense College said the Philippine Army has a moral obligation to defend the country against any challenges including against the civilian authorities if they are not doing what the Army feels they should do. Shocking statement to be made two years after the revolution but essentially they are people who want to have a strong Government and one which is honest and one which moves quickly efficiently.

MR. LEHRER: Not, are they aligned in any way mentally if not otherwise with Ferdinand Marcos and what is left of the pro Marcos feeling in the Country?

MR. KREISBERG: There may be some who are. I suspect most are not. Some of the people who were aligned with Marcos on the outside, the civilians support them because they so strongly oppose Corazon Aquino and her government. But I don't think they are aligned with any particular former leading group in the Philippians. They're opposed to the landed aristocracy in the Philippians.

MR. LEHRER: Could you describe their politics as right or left?

MR. KREISBERG: It is neither right nor left. It is perhaps what in Italy of the 1920s was called socialistic facism. They are determined that they know what to do to help the people of the Philippians become more prosperous. They haven't told what that is but they have great confidence in themselves.

MR. LEHRER: Mr. Ambassador anything you want to ad or subtract to that description?

STEPHEN BOSWORTH, Former U.S. Ambassador, Philippines: Well I think the description is on balance generally accurate. I think that there are two points that might be made. One I don't think that one should over look the fact that from the beginning, until at least relatively recently this group of young officers was very tightly tied to the former minister of defense. Indeed most ofthem were members of his security detachment at the Ministery of Defense. And that's where they were when they were plotting against Ferdinand Marcos back in 1985. The second point to be made is reinforcement of what Paul Kreisberg was saying. I find in my contacts with these people and what I know about them they are generally self-anointed They were moral purists. If you will they remind me a good deal of the same strain military thought that we saw in South Korea in the early 1960s and in some countries in Latin America in the 1960s. I think it should be plainly stated. These people are not Democrats. They have no commitment to democratic institutions or democratic principals. Their objective here is not simply reform as they see it. Their objective is political power and the exercise of it.

MR. LEHRER: But they're not willing to go through the political process to gain the power?

AMB. BOSWORTH: Precisely not.

MR. LEHRER: Are there people who are rallying. Non military people who are rallying to their side in this fight against Aquino?

MR. KARNOW: Well I think there is a lot of political posturing, there is a lot of opportunism and we see the Vice President Norel strangely enough supporting the rebellion against his own government.

MR. LEHRER: We ran a piece of that last night, in fact, him saying that.

MR. KARNOW: That's right. I do think, however, I would like to qualify these remarks about these rebels. I would not want to paint them as robin hoods in any way. Even though Gringo Hanason jumps out of airplanes with snakes around his neck and that kind of nonsense.

MR. LEHRER: This is kind of the de facto leader of these people.

MR. KARNOW: Presumably.

MR. LEHRER: More than de facto?

MR. KARNOW: And there is a lot of surrealism in the Philippians. It's a strange theatrical kind of country. Nevertheless there are people in that reform group. I would possibly agree that we could not call them democrats whatever that means in that Philippians but they do reflect a lot of the frustrations that have been going on in the Army. They were a reform movement that stood up and challenged Marcos and then they were involved in the Mutiny against Marcos. I have spoken to numbers of Army officers in the Philippians, out in the field, who would not rebel against the Government but were very sympathetic to Gringo Hanason and the rebels. Look at the problem from their point of view. Not to justify it but to explain it. They are fighting a communist insurgency with a government which is fundamentally with out any land reform, with the power of the old families and old dynasties. That is not exactly a formula for fighting against communist insurgency. Communist insurgencies are not just fought by military means. You need social programs, political programs and so forth. And a lot of these as Paul Kreisberg rightly said a lot of them are quite idealistic whether they are in the rebel group or they are not. And that is why I think this coup attempt is so much more serious than a lot of fighting around a hotel.

MR. LEHRER: Well, Mr. Kreisberg, Americans hold Corazon Aquino in a special position. I mean, that she is a heroine of the World for what happened in all of that. Explain why these rebels and others do not feel the same way Americans and others in the World feel about her?

MR. KREISBERG: They feel that she simply has been incompetent, that she has gathered incompetents around her, many of whom are friends or relatives, who have been going back to some of the corrupt ways during the Marcos Administrations. 5 percenter or 10 percenter in trying to bring in foreign investment. They feel that she hasn't set priorities for the country. They feel that when she makes a decision its after a long long time, she doesn't follow through. She recommends policies and then does nothing to push them in to practice. And then there are a variety of very concrete things that she has done that bother them. She has tried to bring the constabulary and the Philippine police in to one organization. That has created a lot of antagonism with in the constabularies. many of whose generals are now going to have to retire. So you have concrete issues that effect the individuals and their lives. You have national policy issues that they fell do not portray her as being a strong leader and Filipinos want a strong leader. They may want democracy, they want freedom. They want to be free to say whatever they want. But at the same time, they want to have a strong man at the top of the government. And this was the appeal that Marcos has for so many people for 20 years.

MR. LEHRER: Amb. Bosworth, does that indictment make sense to you?

AMB. BOSWORTH: Well, I think it depends on whose perspective you are looking at. I think that, yes, some people in the military particularly the people who are now known as the rebels, wanted to see a stronger and more assertive central government, but I think if you look at the Government's perspective and realize what that Government inherited the complete absence of an administrative apparatus through which to exercise its influence and authority in the countryside for example. I think one has to be a little careful in making blanket condemnations of the Governments failure or its success for that matter. I think it's a mixed bag. I think on balance they have done an acceptable job in many areas. There is no question that there are some areas in which their performance has been deficient, but I think their major accomplishment up until now has been the rejuvenation of the economy. And the insurgency in fact has at least leveled off and perhaps begun to decline. And I think that's due in part to an improved performance by some of the military in the counter insurgency battle. But it's also due to the fact that the general economic situation has been getting gradually better. Now they still have a long way to go. It's still a very poor country. But my sense has been that economic perspectives were significantly improved over the period of say three or four years ago.

MR. LEHRER: Stan Karnow, let's go back to where we began and that is the military situation and the use of the U.S. military in this. Is it your feeling that she would not have survived with out the U.S. help?

MR. KARNOW: From everything I've heard and read U.S. that U.S. intervention was really crucial and decisive in saving her. This was the first time that rebels have used air power even though it was primitive air power sort of speak. But she was up against it and I think reluctantly asked for U.S. intervention. Now she must have known and the people around her must have known that the minute she asked for U.S. intervention she was facing this dilemma even if she doesn't ask for and faces the prospect of being blasted out of her palace, or she asks for it and faces the prospected of being blasted by all her political opponents who are now going to say in the crunch here you have to turn around to Uncle Sam and that makes us all look like a neo colonial situation and the U.S. Marines are coming back like they did in 1901, and I think the whole U.S.-Philippines relationship is reallyone of the big elements in this picture. How it sorts itself out is something we can discuss.

MR. LEHRER: With the bases?

MR. KARNOW: With the basis, with negotiations coming up. Is she going to turn around now having in a sense damaged her nationalistic credentials and over compensate by being tougher in the base negotiations and so forth. But this has been a real turning point I think in the whole U.S. Philippine relationship.

MR. LEHRER: Mr. Kreisberg, its also a turning point in the U.S. approach to these things. Isn't it awfully unusual for the U.S. to intervene in an internal situation like this in this fashion?

MR. KREISBERG: This was the first time, I think, we've ever done it and it was clearly done with great reluctance by the administration. They tried, I think, to put off doing anything more than was absolutely the minimum that could be done under the circumstances. They were asked to strafe, they were asked to bomb. And they ended up essentially by sending up some F4s to float around and try to maintain cover for the Philippine F5 while they were able to get the air power in control. My impression is that we were already being asked by some of our allies whether this is now going to be a new American practice that if we are asked for help by friendly governments we will provide it. I think we're trying to steer away from that. I think it is an unusual circumstance.

MR. LEHRER: Justified?

MR. KREISBERG: I think under circumstances there was probably no way that the President could turn down President Aquino.

MR. LEHRER: Do you agree, Mr. Bosworth, that there was no way that President Bush could have said no to this request?

AMB. BOSWORTH: I think we did the right thing. I think there was no way we could have said no to it. I think both sides recognize that it would create problems in the future. But I think both sides also concluded that those problems would be less than the problems of trying to deal with a successful coup and a government in the Philippines controlled by or influenced by these young military officers.:

MR. LEHRER: Do you have anything to add to that, Stan?

MR. KARNOW: I agree completely with that. It does open up this whole new situation. Are we now going to be on call, or does this tell us that the American colonial relationship with the Philippines continues because it's a special case. I mean if some other country says come on in and bomb our rebels.

MR. LEHRER: Forget it.

MR. KARNOW: Forget it, but the Philippines is different because of that historical background.

MR. LEHRER: Well, Stan Karnow, Mr. Kreisbery Ambassador Bosworth thank you all three for being with us.

MR. MacNeil: Still to come on the News Hour European Leaders on the Summit and compensation for Japanese Americans. But first this is pledge week on Public television. We're taking a short break now so that your public television station can ask for your support. That support helps keep programs like this on the Air. For those stations not taking a pledge break, the Newshour continues with a look at our troubled Savings & Loan industry. Yesterday amid growing criticism over poor oversight and delays M. Danny Wall resigned as the nations top thrift regulator. With the Governments 160 billion dollar bailout now under way our Business Correspondent Paul Solman explains how so many S&Ls got into trouble in the first place.

MR. SOLMAN: They're auctioning off foreclosed real estate here in Denver, much of it foreclosed by savings banks. The bidders couldn't be happier, they're getting a bargain, but for the country as a whole it is a sad expensive story and one that should never have happened. To understand what went wrong. Return with us now to yesteryear and everyone's favorite bank movie Frank Capra's It's a Wonderful Life. They called it a building and loan association but it was really just a savings bank with a basic rather modest economic purpose to accumulate the savings of the local community and lend them back out to that same community minus a small fee for the service. So it didn't necessarily mean prosperity for those who started it but the local savings bank was vital to communities across America, pooling their wealth while sharing the risk of lending to each other. When a run occurred at Jimmy Stewarts fictional bank he was forced to explain the basic idea to the residents of Bedford Falls.

JIMMY STEWART: No, but you're thinking of this place all wrong. It's as if I had the money in the back in the safe. The money is not here. Why your money is in Joe's house that is right next to yours and in the Kennedy House and a 100 others.

MR. SOLMAN: During the depression many banks failed. In response the government introduced insurance for depositors to restore faith in the system. Under Pres. Roosevelt, savings banks would continue to make home loans the government would guarantee deposits. By the 1940's the country was doing just fine and savings banks were too. Jimmy Stewart's modest institution typical. It didn't make much dough but then running a savings and loan was a road to riches. Then in the '70s came a devastating blow inflation. Bank's like Jimmy Stewarts were used to paying maybe three percent for short term deposits lending it out long term let's say at 5 percent for 30 year home mortgages. The bank kept the 2 percent difference for itself. But here's where the problem begins. Commericial banks in the big city were willing to pay depositors higher rates than the savings and loans were offering because the commercial banks could lend out the money at higher rates. To keep depositors from shifting their accounts to the city savings banks had to raise their interest rates as well. But that meant they had to pay out more for new deposits than they were bringing in from their old loans. Suddenly the industry was facing huge loses. How to save the industry? Well, in retrospect, the government probably should have bailed out those savings and loans that needed to be back in the early 1980s. Instead, however, the government permitted savings banks to lend beyond home mortgages encouraging them to make supposedly more profitable new types of loans. So savings banks now had two choices. They could remain small modest and local like Jimmy Stewerts bank or they could go the go-go route and many did. Professor Paul Krugman teaches a case on the savings and loan industry at MIT's business school. He says the government should never have encouraged savings banks to lend beyond home mortgages.

PAUL KRUGMAN: We told them if you flip a coin and it comes up heads, then you make a lot of money and if it comes up tails and you lose, it's the taxpayer's problem. So naturally a lot of them went in for coin flipping, into making lots of risky loans.

MARY CREEDON, Federal Savings & Loan Insurance Corp.: They invested in a wind mill farm, in an ethanol plant, in properties in Alaska. So again it wasn't traditional forms of investments, it wasn't local investment in many instances and it was high risk types of investment.

MR. SOLMAN: Deregulation made such lending practically inevitable according to Paul Krugman.

PAUL KRUGMAN: What we did in deregulating them was to leave the privilege their depositors still couldn't do so they could borrow money as if they were safe while giving them the privilege now to lend to the riskiest assets possible and you've got to expect that the government is going to lose money when it takes away the responsibility and leaves the privilege and that's what's happened.

WILLIAM SEIDMAN, Chairman, FDIC: [Nov. 30, 1988] The government should have been supervising these institutions much more rigorously than they were and the government should have understood that you can't grow your way out of this problem, but the industry, itself, should have called for this kind of regulation, and they did not and so there's blame to go around for everybody. FOCUS - SUMMIT SUM-UP

MR. MacNeil: Next, two Western European views on the outcome of the Bush-Gorbachev summit in Malta. We return for a joint interview with two former European officials we interviewed last week before the summit, former British Prime Minister James Callaghan and former French Foreign Minister, Jean Francois-Poncet. I talked with them earlier today. Lord Callaghan, what to you was the most important message to come out of the summit?

JAMES CALLAGHAN, Former Prime Minister, Great Britain: That the words that Pres. Bush would not use, namely that the cold war almost certainly seems to be over. I don't blame him for not using them. But I think that's probably what came over it.

MR. MacNeil: That the cold war is over. Mr. Bush said, well, it's just a matter of semantics in refusing to say so in so many words. Do you think it's more than a matter of semantics?

LORD CALLAGHAN: No, I think the war is over basically but there are some mopping operations still to be done, as they say in these military circles. Nicaragua is obviously one. There are other areas where adjustments have got to be made. But the basic hostility has been replaced as Pres. Bush said by a cooperative spirit between the two.

MR. MacNeil: Mr. Francois-Poncet, what was the most important result of the summit to you?

JEAN FRANCOIS-PONCET, Former Foreign Minister, France: It seems to me that the summit was not a decision making summit and it was probably wrong to expect big, new decisions. This being said, I think it confirmed something very important, that we have entered a new era, an era in which those summits are no longer confrontational, but there are summits in which cooperation is sought, and in that particular instance, the big problem was how can the West help Gorbachev. It seems to me the issue was how can we reinforce Gorbachev in the difficult straits in which he is at this particular time. And I think in that respect it was useful.

MR. MacNeil: Did Mr. Bush go far enough to please you in that direction of helping Gorbachev to make perestroika work?

MR. FRANCOIS-PONCET: Well, I think he couldn't do much. None of us really knows what we can do to help Gorbachev. I think all of us want to help him and, in fact, the only thing that could be done was to stage that meeting which increased his internal credibility, his international stature and that is really what he came back with and that is really what he came back with, and that is of help to him. Whether it helps him enough remains to be seen.

MR. MacNeil: How do you feel about that, Lord Callaghan, the issue of helping Gorbachev?

LORD CALLAGHAN: I think Francois-Poncet's uttered the central point. There is of course a subsidiary question, and that is the German question that I'm sure he and I would both want to address ourselvesto, but clearly the Soviet economy is something that can be remedied only by themselves. We can give managerial assistance, we can supply technical skill, we can a certain amount of economic aid. But the plain truth is that as long as inflation runs at the rate it does, as long as monetary incomes expand much faster than the production of goods, as long as the ruble won't buy what it is supposed to buy, the remedy for that lies basically in Soviet hands, and they're going to have a very difficult job. I don't say that because I think it's easy for them to do. I think it's going to be very difficult for Mr. Gorbachev but I think anybody else but Mr. Gorbachev would not be as good for the West as he is.

MR. MacNeil: Do you think that the gestures Mr. Gorbachev made will actually give Mr. Gorbachev something to take home as Francois-Poncet said?

LORD CALLAGHAN: Well, they give him status, obviously, and that is important in his own country where has much more criticism than he finds abroad, so it helps him in that sense. In material terms, I agree with Francois-Poncet. I don't think there is very much that can be given, but what we can give I think is being given and we shall certainly hope to increase what we're doing now.

MR. MacNeil: You mentioned Germany. Do you think this summit accelerated, retarded, affected in any way the momentum towards German unification?

LORD CALLAGHAN: I think perhaps it halted it a little. I hope so anyway because I don't want that to go too fast. I think it's very important that there should be a government in East Germany, and although it exists today, it is one without authority, but a government that will hold free elections. That is the first requirement. Secondly, my own view is that there must be a peace treaty between the old allies and the two Germanies before we can start talking about any question of reunification, although it is finally a matter for the Germans to decide, we have interest in such matters as borders, what they think about them and many other questions as well, and I would therefore, I don't know that anybody else would take this up, but I would myself want to see a peace treaty negotiated before the question of reunification came on the table at all.

MR. MacNeil: Mr. Francois-Poncet, do you agree with Lord Callaghan that the effect of this summit was to halt a little bit the progress towards German unification?

MR. FRANCOIS-PONCET: Well, I think I'd like to make a different kind of remark. What struck me in that summit and everything that surrounded it is that it was utterly different from Yalta. In that summit the feeling I have had is that the super powers were no longer in control of the situation in Europe. Obviously, the Soviet Europe no longer controls anything, and the time when the United States controlled what happened in Germany obviously has gone. I'm not saying that Washington no longer has any influence on Bonn. But obviously the situation, the ball in Europe is rolling. And no one really knows where it is rolling. I'm quite sure that the intent of Gorbachev and Bush was to slow the process of German reunification and I agree with Lord Callaghan that that is desirable. Whether that can be one is another question because today the fate of Europe is no longer in the hands of those who are supposed to be responsible for it, but is in the hands of the people. And what's happening in Eastern Germany today is rather worrying, and I think we --

MR. MacNeil: I was just going to say does that mean that France and Britain which with the United States are part ofthe original guarantors of West Berlin and therefore still have a kind of treaty and constitutional duty there, that they no longer have a say in imposing conditions on the reunification of Germany?

MR. FRANCOIS-PONCET: Well, I think we have a say. Whether we can still impose, as you say, I doubt. It seems to me that today new ideas have to take precedence over old ideas, and one of the new ideas is European integration, and I must say I was gratified to hear Pres. Bush saying that we must speed the pace of European reunification, because it seems to me that if Germany is to be reunified, and I don't think we are going to control that pace, I think the German people are going to decide whatever we may think, and the important thing is to see and to decide in what frame work it happens, and the important thing is that it consolidates and that it does not contradict European unification which I think is essential.

MR. MacNeil: Let me bring in Lord Callaghan. You wanted to comment on the German thing.

LORD CALLAGHAN: Yes, I do. I think Francois-Poncet is a little pessimistic about the degree of influence that we can exercise here. I agree with him that the people are marching, but I think also the leaders, especially of the Federal Republic, and there are none at the moment in Eastern Germany, the leaders of the Federal Republic, Kohl and Genscher, and the SPD leaders, they all see that if they were to force a reunification without being able to satisfy the West that their doubts can be removed, they will be laying up trouble for the future. Now I think because Germany, West Germany, has been imbedded in democracy in the last 40 years, we are likely to get their cooperation. I would agree if Francois means that we need their cooperation, but I think that is important if only for the sake of the Soviet Union's security in terms of the borders that it is likely to have in the future. Now as regards the integration and the unification of Europe, I was delighted with what Pres. Bush had to say. I don't say that because I want to make a point against our Prime Minister at all. She has one view of the future. I have another, and I believe that it is absolutely important for Britain to be right in the center of what is taking place in Europe over the next few years in conjunction with the French, our French friends and with our German friends, and with the others, so I hope Pres. Bush will continue to push this point.

MR. MacNeil: Let me ask each of you in conclusion, what did you not hear after the summit that you would like to have heard and that left you a bit disappointed? Lord Callaghan.

LORD CALLAGHAN: Nothing I think disappointed me. I think they said all the right things. What they did, I think the 21st century has arrived 10 years early, and what they have done is to leave we Europeans with a tremendous responsibility for our own future and a great deal of work to do. I think we are going to have our work cut out and we shall certainly need the support of the United States in what we're doing.

MR. MacNeil: Mr. Francois-Poncet, is there anything not said that disappointed you?

MR. FRANCOIS-PONCET: I don't think there was that much said. What was right at the summit was the music. The music was good. It was a music of cooperation, a music of peace, a music of unity. What has to come now are the words. We must know what we are going to build and the main problem is the new European order that is going to succeed, the post war European order. We are now confronted with deciding on what the post Communist order is going to be. And I must say I was delighted to hear what Lord Callaghan had to say because I heard him speak of a unified Europe in a way in which Mrs. Thatcher is going to speak. I think it is very important that France and England develop a common view as France and Germany have in the past. If we do that, then you Americans will have a solid, trustful partner in Europe, and I think you will need that partner more tomorrow then you needed it yesterday.

MR. MacNeil: Any addition to that, Lord Callaghan?

LORD CALLAGHAN: No, we'll work on it, Francois, to try to get a common agreement and a common line.

MR. MacNeil: Well, thank you both for joining us, Lord Callaghan in London, and Monsieur Francois-Poncet in Paris. Thank you. FINALLY - WAITING FOR JUSTICE

MR. LEHRER: Finally tonight a story about some Americans who have finally settled a serious score with their government. They are the Japanese-Americans who were interned during World War II. Pres. Bush recently signed a bill providing $1.25 billion for them. It ended years of debate over whether the internees were owed anything for the loss of their property and freedom. Robert Honda of public station KQED-San Francisco reports.

MR. HONDA: Shizu Hirabayashi of San Jose, California is one of 120,000 Japanese-Americans incarcerated by the U.S. Government during World War II. She even got married to her longtime boyfriend, Toby, at the internment camp in Utah. As a family of Japanese descent, the Hirabayashis were bussed off to remote internment camps soon after World War II broke out. The government said it wanted to prevent any possibly espionage or treason by Japanese-Americans as well as to protect them from the hostile anti-Japanese mood of the public. Life behind the barbed wired lasted about three years but the bitterness and bad memories lasted much longer.

SHIZU HIRABAYASHI: The barbed wire around us made us feel like prisoners and the sentries up above with their guns, and the fact that we weren't free to go outside of the compound.

MR. HONDA: For many years the former internees were humbled by the ordeal. They wanted to put the experiences and harsh images of camp behind them and they were reluctant to press demands on the U.S. Government, but as new generations of Japanese-Americans became more aware of what their parents had gone through, a community movement slowly began to build, a movement to compensate the former internees for loss of property and freedom. In the late 1970s, the traditionally reserved Japanese-Americans began to stage nationwide demonstrations and candlelight vigils to remember those who had died since camp. Over the next 20 years, Congressman Norman Mineta and other California legislators repeatedly tried to push through a compensation bill. The attempts failed but support in Congress grew. Finally in August of 1988 Congress passed a bill designed to pay each surviving internee $20,000. Shizu Hirabayashi's husband, Toby, had been optimistic he would be compensated for the three years he lost in camp. When the bill was passed the family had high hopes that the money was on the way.

SHIZU HIRABAYASHI: His attitude was like the saying goes, good things come to he who waits. He thought, well, if he waited long enough it will come to be.

MR. HONDA: But more than a year later, not one penny had been paid out. Congress had approved the bill but had not appropriated any money, and without appropriation, the congressional action meant nothing. Congressman Mineta says the so-called redress payments have had to compete against high profile programs including the war on drugs.

REP. NORMAN MINETA, [D] California: And it's just not money for redress versus drugs. It's drugs versus housing, transportation, redress, health, all the other kinds of programs.

MR. HONDA: A national lobbyist for the Japanese-Americans, Grant Ujifusa says politicians are walking a tightrope even though they support the bill in principle.

GRANT UJIFUSA, Lobbyist: When it comes time, however, for the appropriations process to kick in, that Congressman from Texas or from Pennsylvania has to think about his district first.

MR. HONDA: One year after the law passed angry Japanese-American groups began protesting the delays. For many older former internees, the lack of congressional financing meant they would die before seeing any money. National Redress Coalition Leader Richard Konda says the death rate will only accelerate.

RICHARD KONDA, National Redress Coalition: There are at least 200 people passing away each month and those figures come from the Office of Redress Administration in Washington, D.C. and so that means that at least 3,000 people have died since Reagan signed the bill last year.

MRS. HIRABAYASHI: I keep thinking of Toby. I keep thinking that he waited a whole year after it was passed. It was passed in August 1988 and he died September 14, 1989, a whole year went by, and I feel like he shouldn't, it shouldn't have been that way, you know, that he had to wait. It's really sad.

MR. HONDA: The delays in reparations have been a source of frustration to all four generations of the Tokiwa family. Family members recently gathered in Northern California for their annual pilgrimage to the grave site of the first generation parents. The father served in the U.S. Army during World War I. His sons volunteered during World War II, despite being interned in camp.

RUDY TOKIWA: I've had many people tell me if they would have threw me into a concentration camp, I never would have volunteered to fight for that country, you're a damned fool for what you did, look at what it got you, now you walk around with crutches, did they do anything more for you, they're not doing anything for you.

MR. HONDA: Spurred on by the internees' bitter recollections of camp, Congress started the appropriation process over again in September, trying to find an acceptable way to pay for reparations in a year of an especially tight budget. A joint committee of House and Senate members approved a package under the funding category of entitlements for the next fiscal year. Theoretically, the move guarantees funding because entitlement programs do not need to be re-budgeted each year, and therefore, are not subject to the whims of Congress, however, the proposal set off an emotional debate in the House over priorities.

REP. HAROLD ROGERS, [R] Kentucky: But how we can elevate these payments, Mr. Speaker, above those of children who need care from this Congress, above the needs of the nation's defenses that this Congress is responsible for, how can we elevate these claims above those who are not receiving a proper education in this country that this Congress is obligated to try to help?

MR. HONDA: But House supporters went back to the images of camp internment to make their arguments. They called the compensation a constitutional issue, because internment was a violation of rights of American citizens.

REP. JAMES TRAFICANT, JR., [D] Ohio: History has proved there were no stateside conspiracies and the Japanese-Americans were taken away from their family and their children, natural citizens born in this country seeing their father leave. That was wrong. Today America should right that wrong. I'm glad to see that we brought this out as an entitlement because we made a great mistake, and everybody in this country should be treated the same way and when we start doing something other than that, we throw stones at and tear up page by page the Constitution.

MR. HONDA: Ultimately the stories of camp life helped to win support. In late October, the move to put reparations under entitlements was approved overwhelmingly. But the compromise puts off any payments until next October. For many internees the new one year delay took a lot of joy out of the occasion.

SPOKESMAN: They've sent out notices to the people 90 years old and older. Now if they don't pay these people this year, just think how they're going to feel. What are you going to do to these people?

MRS. HIRABAYASHI: It hurts. It hurts. Like I said, I hope there will come a day when he can look from above down on us and say that the wrong has been righted.

MR. HONDA: The government says there are about 16,000 former internees over the age of 70. Barring any unforeseen changes, those seniors will get their checks first starting October 1990. The compensation of any former internee who died after the bill was passed will go to their heirs. Even though the congressional process is finally at an end, many Japanese-Americans won't believe they've finally won the fight until the checks arrive. RECAP

MR. MacNeil: Again the main stories in today's news, thousands of foreigners, including 200 Americans, were trapped by continued heavy fighting between government troops and rebels in the Philippines. Pres. Bush reported to the cabinet on the Malta summit. East Germany's former Communist leader Eric Honecker was placed under house arrest. Good night, Jim.

MR. LEHRER: Good night, Robin. We'll see you tomorrow night. I'm Jim Lehrer. Thank you and good night.