TEXT OF PAGE 2. OF FEBRUARY 5, 1988 STATEMENT TO THEN-NEW YORK STOCK EXCHANGE C.E.O. JOHN J. PHELAN, JR.:

The second item here resembles economic forecasts we often saw in the late 1970s--particularly in reference to oil prices and potential "major losses" on U.S. loans to the Third World.
It was consideration of such in 1978 that originally in part led me to do the work i did then to respond to such "concerns."

The difference now is that we have experienced the series of tumultuous reverses in the stock markets.

In order to avoid seeing the forecast become reality, (again) we have to reevaluate what might cause such turmoil, and we need to take appropriate and adequate steps to deal with the "problems" and prevent them from getting beyond our control.

This is my purpose in making these submissions to the directors of the stock exchanges--as it was my purpose in writing to Robert McNamara in 1978 and in writing A.W. Clausen in 1986.
You must understand this, Mr. Phelan.
Aside from it, i was reluctant to make a second submission to you except to give you the correction for your copy of my Christmas statement to Desmond Tutu for fear it would be misconstrued as an attempt to interfere in the 1988 American election process.

However, as you do see because i am providing you with the items enclosed, i have brought these circumstances to the attention of both American political parties.
I have explained exactly why i did everything i did in relation to them.
I have further explained why i haven't finished my potentially final report as SPECIAL DIPLOMATIC ADVISER TO THE U.S. PRESIDENT for President Reagan.
I have requested the cooperation of both American political parties (and i am in the process of asking for it from Canada's three major political parties).
And i continue to wait for instructions from President Reagan how he would have me complete the "International Diplomatic Work...on a direct basis" to his satisfaction.

If i do receive written instructions from the White House--it remains possible that President Reagan may choose to provide them via the Vancouver U.S. CONSULATE as was arranged in September, 1987--and i can disclose a copy of them to you, i will do so.
My recent dealings with Ms. Carney's office and the U.S. CONSULATE in Vancouver suggest that i may hear back, finally, from President Reagan almost immediately.
There is an obvious need for exigency in response to "(my) present situation."

However, as President Reagan did choose his January 11, 1988 remarks very poorly--whether deliberately or not--and it appears to me there has been a reaction to them by the international investment infrastructure that might well be in part the result of consideration of the contents of my disclosures to the stock market directors, i make this further submission to you so you understand accurately what is "(my) present situation" and so you can decide by reference to it whether the American political parties' future "actions" are competently responsive to it.

In light of the continuing restrictions on my financial capabilities and with respect for the fact that the stock exchanges are not agencies of the government(s), of course these present submissions to the stock exchange directors fall in the category described on page 3. of my most recent statement to President Carter.
As no doubt you can understand, Mr. Phelan, i'd prefer to be criticized for making them--after having disputed any irresponsible allegations that i am following suit with the "Irangate" conspirators who exceeded their authorities--than to see any more stock market crashes like those since October 19, 1987.

I'm not about to tell you how you should respond to these circumstances.

If the authorities don't respond as you think they should, presumably you will respond according to what you believe is "best" with respect for your responsibilities and "influence."



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