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31 1 2 3 4 11 lta. S?h>11M S. SCOTT t Yota re a l t fami 1iaic 5 Ilf with the old c2icbe by tlu iaevitable MC, Iwnat to intso- OD a) 6 2° duce you to an individual wbo aeeds no i.ntrcdoctios. Well ~ co 7 ~ Itve got the situation tonight of introducing a 9entlensA ~ 8 0 %#w wants no introductiva. It is ny pleasure to stand. bere .. . 9 ~ tonight and introduce a qentlemn that we've all coam to knm, ~ 10 W love and appreciate, and that's ti.wr9e weissman. Let's qtw z 11 ~ George Weissman a big round of applause. (APPLAUSE) 12 ~ As I stand here with George w.isssan I would z 13 ~ csrtainly want ta take this opportunity to express my sincere F ~ 14 ~ thanks and deep appreciation as I look around this room 15 ~ for the presence of our Senior Bxecutives from 120 Park, they 16 z honor us by being here, let's give thea~ a round of applause. PBILEIP NORRIi INCORPOtiA?llD IP84 CORPORA'PE "tAM WORLD CON!'8RA'NCS Ws a9=, NaW YORK aWTt3Ett 12, 14" PRN99IDI11Q: 8TA1M S. SCO'1'P ~ 17 Q (APPLAUSE) Ladies and qentiema. deorrqe weissaian. U w 18 '~ MR. GEORGE WHISSMANs Thank you Stan, that 19 20 ~ p' was so unexpected your calling me up here (I,AtJGBTRR), thank ~ E-~ d ~ w F you Chris Corey and Saul Loge wherever you are. (LAUGHTER) 21 z *el:wae, it's qood to be back with all of 22 23 24 25 you again. I know you've bad a st#asn2itint;isSay and a relax- ing meai and you've just begun to wbet your appetites. This evening I'm here to introduce our featured speaker, the Right Honorable Denis Healey,. Deputy leader of

0 1 2 3 4 7 22 23 24 25 CD N 8ritaina' Labor Party and a r.cogniXed authority on iater-- natiooal alfairs. 8e' 11 be speacieq Abant world concerns for,the rest of the decade and I can't think of a sore relevant topic for our conference or for our corporation. In a round about way phillip Morris, has been involved with world affairs from the very beginning. In fact you omid say we adhiered our initial success by capi- islisiag on an international incident. In 1847, Phillip Morris first opened its tobacco shop on Bond Street in London. A few years later the8ritish soldiers returned from the Cri- nean War, brought back the paparosa or tobacco rolled in paper and he began manufacturing the new products. His business thrived and exports began to the colonies of two cigarettes called, Oxford Blues and Caxobridge Ovals. We still make then today and they're called, phiilip Morris and they're called, English Ovals. The rest is history. We eventually became a srulti-national ccseQanY incorporated Americoa, and achieved our initial success here by capitalizing on our international background and our English pedigree. we still have that cigarette called 8nglish ovals, we have Benson & Hedges, and we have Marlboro, and many others. Mr. 8ealey, we've been anglo-philes for many years, ovRr and ows our sttoness has been shaped by the way we worked with publkc trends, national and inter- national affairs and public opinion. The course of our w'hole N O N ~ N N ~ ~ N

83 1 2 3 4 5 6 z 13 ~ industry has been shaped by pub1ic relations, public affairs over the last 3S "axs. Since Kor1d War 111, we've bad to tand off attadlas on ciorettos and the r.rersa 1 of the public opin- ion on smoking. During the war and tbsre are few of us that sMI, r it, Mae Arthur in the Pacific esta_.blished his Au.ber one priority as getting cigarettes to the troops and most olas wbo remember the war remaber how the cigarettes servird" as the currency of the day. In fact my favorite anecdote about that time comes from Ross Milbeiser out Vice-Chairman who was in a prison camp in cleraany, and Ross saw prisoners trading food !!4 f or cigarettes and made up bis mind to come back to work for ~ 14 I a cigarette company and that one fortunately for us was 15 ~ Phillip Morris. 16 z But unfortunately the tides turned and it s 17 0 v led to cbanges in products, in media, in the public tolerance, w 18 °[ ~ 19 z' in our advertising, and in consumer 14+.rceptions of our pro- U duets. 22 23 24 25 If ImY sa.y one word to-a21n of you attend- i n+q this conference it's that bow well you public affairs and public relations or the corporation and the industry over the next decade will determine the future of the in- d<istry, the future of this company, and your own persona 1 futures becaasp no matter bow smart we are, no matter how

84 1 2 3 5 II 00 V) 6 OqO) 7 ~ 8 0 ~ 22 23 24 25 macdt iatelliganee gors into our 1obs it's going to take all ot our or*ativity and inWOMaitX to sea'i aigag.ttes that .re taxed out of the range of the ordinary consumer, and that are probibitecl from we in a nurber of public areas. eat I don't mean to sound grim and despondent because eafb year for the 36 years that I and Joe Cailsan and Rosa and 'a>ity-in this room bave been associated with tbe iadustry. T'ke alerm bells bave been ringing and yet consistently our smokers bave stayed with us in anasing strength as they have for 6,000 or 27.000 or 40,000 years dep.odir- epon vPhicels anthropological theory you hold. Smoking is not a habit that's going to dis- appear, it will remain a major factor in the world economy. Cigarettes raay keep on being as good or better than most currencies. Governments depend on cigarettes, they generate toa billion dollars in the United States tax revenues and five billion dollars in the U.K. Our own coaapany reflects the size of this lbi+siness. We are the 35tb largest industrial corporation in the States, in sales and ISth largest in net income. Now we operate in 170 countries and territories. We're a world class orgaeisation and as such we're affected by world events, as we always have been. We can no longer afford to think just in parochial terms, the economics, the politics,

1 3 4 22 23 24 25 th* public goods of the world affect us every day. And tonight we have with as a gentleman who can tell us what to expect on thue f ro®ts in the 80's . 1tr. Hea ley certain2y deserves to be called an eacp.rt, and has also been called the Renaissance Man, he's b.en D.piety Leader of Sritains' opposition Labo= Party. He's b.en the Party's spokessaa oa foreign affairs since 1480, formerly he was Chancellor of the Hxohecsqter and S.etretary of the State for Defense. Statesman, politician, author, xseer of Parliamsnt, D+rnis Hoa2ey har had an extraordinarily long active and coAtro- ve3cs l.a i carerr. . He's bser described by his colleagues Richard Crossman, who watched his froe an adjoining bench in Parlia- ~ ~ 0 _z R 0 w a ~ aent for years as quote, "A cospletely free man tied to no one and able to make up his own mind on each issue as it arises." 8e was educated at Oxford, a double first in classics and philosophy. He joined the Army in th. second orld war and was a Major in the Royal >,bqineera serving in 0 DTorth Africa and Italy. As we were talking at the table our F ~ ~ er of a sub- aths could have crossed because I was Ski w z pp p N 0 dtaser on the Mediterranean attac'6ed to British forces at the time working beach heads with the 8th Army and various N CJ1 A ~ other British Carnando ..Vnits, and I's sure Hr. Healey re- N ~ +j1 members the days when we lived off snaa and Il<affi and vrhen ~ we Americans traded British a pack of Phillip Morris for a

26 1 2 3 -5 II OD a) tin of teat, for a cmp],e of bottl*s of Nelscn's bloody rme. AM sare fiwatiass ouaom in a.d3ile. bnt after the war we all faced ahoicws and !tv* Ssaley could bave returned to ouford, Ut instead went to work for the Labor Party and began a long life in politics. 6 00 ~. In 1952 he was elected to Parlia.ent and he's ~ 7 8 I' :St cn_ ' bseo there ever siQce. Sbortiy thereafter b.caae a eeaiber of tlK delegation to the consultant to the asserblY of the Council ~ 9 02 of Burope at Strasberg. In >dtoveeber 59, be was elected to 10 ~ T1 z the Shadow Cabinet and soon became labor spokesman on foreign ~ affairs and defense. In 64, he became Secretary of Sta te for 12 vai ~ Defense a position he held until 1970. z 13 ~ F ~ When the Labor Party went out of office he 14 15 I ~ led the opposition parliastent on foreign and comawnwealth ~ affairs and in 1972, he becaaie Shadow Chancellor of the ~ 16 0 z ~ Sxchequer and when labor got back into power in 74, he be- 17 _ o ~. mM Chancellor a post•be b4ld until 1979, the longest period 18 -3 anyone has ever survived iii that position since World War II. 19 0 d Meanwhile Mr. Healey's been affiliated with 20 ~- numerous orgaaUations: including the Royal Ingtitute of 21 z Strategic Affairs, the Royal Institute for International 22 Affairs, The Fabian Society, and be's a patron of the arts, 23 be's going to run the Maria festival in London, next year. 24 And he staged some forbidden art exhibits at Oxford as a 25 I youth. (LAOGHTER) Very cute story, I mentioned a painting

87 1 2 3 5 6 7 8 by my Greek ca I lfd , Ra te, and he to ld re tha t when he Ns t at Oxrgrd,. he put it on eahibit a lo" with solw other iftfto- vative patA#srs at the tiw but when the little old ladies from the north country came tbrong'ht.the exhibit be had to hide the paintings. But he's also beea a book aotbor, be's a world statesman and he isn't stuffy. Ladies and geAtlemsn let me introduce to you a son wlso the Tiaies once described as resembling an Irish gg~r ," Always tough, brave, resolute, and reckless." The Right Honorable Denis Healey. (APPLpivSB) RT. HONORABLE DE>~iIS HEALBY: Well iadies and gentlemen, bnllshit could go no further. (LAUGHTER) When George was speaking I was reminded of a predecessor of nine who was Chancellor of the Excbecquer who found it very diffi- cult to make speeches for himself so he used to get his pri- 15 - vate secretary to write them out for him. And there was one 0 16 0 Z Amous occasion when the worm turted, the Chancellor was making 17 O the annual address to tis Frozen Penguins of the City of v w 18 w London in the Mansion Rouse, and he started out as followsr ~ 19 z 0 he said, My Lord Mayor, your Royal Highness, My Lord Bishops, d 20 Z W My Lord cherished gentlemen, the pro'qlem we face today is 21 ~ perhaps the most daunting our country has ever heard. Unless 22 we can find a solution in three short months I see nothing 23 but catastrophe ahead. There is only one way forward, he 24 turned over the page and he read out, from now on your on 25 your own you bastard. (LAUGHTER)

a® 1 2 3 4 I don't leel entirely lonely tonight because George and I wre in the M.dit.rraae#d in 1944, wwhen I was involved in landing the British troops at the Aasio beach bead and George was offsboee rescuing some of our sailors wbo bad just been sunk on a destroyer by a German guided boab and Andrew Whist bas been a elose friend for aiaay years and your new boss Samisb, is actually an undercover Britain (LAtXOr?BR) Samish I was going to say EAgiisbmaa but I'remsa1ber the sensi- tivity of the Scots (IAtfMTBR) about that particular word so I .Ieft it out. Now I want to give you a talk tonight bectase I know you've been very abstemious a11: day, you were only about six drinks ahead of me when I arrived after visiting most of New Engiarad in the hours before our talk bers, ~ wanted to start off by telling you that there are tbree 16 z t hings you should never believe. 17 9 o The first is the statement, I've ,)ust put a w 18 a check in the post. The second is the statement, which I ~ 19 z 0 quote to my lady friends, I' 1l respect you even more in the 20 ~ ~ morning darling. (IAtAGHTRR) And the third is the statement E- 21 z 22 23' 24 I'm from the government and I'm here to help you. (IAOMTSR) weil I'm from the opposition, in 8ritain, labor opposition so of course I'm here to horrify you and I want to talk a few minutes before you resume your drinking 25 II about the prospects vbich face us in the next 5 or 6 years before

89 1 2 3 4 5 6 8 22 23 24 25 the decade comes to an eO. Dlo++ I think ssat of you would agree that the most .i.portant s iwgle ob j.atives we eon ld have was peace and prosperity and some of you would share my views that you only get peacte if you get some sort of cooperation between eaat and west and you only get prosperity dluan you get some sort of cooperation between the northern part of the world and the south. And both of these objectives are currently threatened by two probless which could in the coming weeks and months produce critical sitsation. So I want to start off by talking a little bit about the arms race and about the debt crisis and both of these issues are relevant to how sany cigarettes people smoke and how much beer people drink. A word first of all about the as'ms race. For the last 30 or 40 years both Russia and the west have been accumulating a number of nuclear vroapons which makes really no sense because they can never use them. But so far although the balance between Russia and the United States has moved up and down from time to time, the differences between one side and the other haven't really upset the basic stability of the situation. But what is worrying at the soment is the discussion between Russia and the United States has come to a halt in this area but each side is beginning to deploy new types of weapon ahich could upset the stability in which the world has enjoyed for the last

B10 1 30 or 40 years. 2 First of aix both sides are deploying weapons 3 Which crollid hit their targets in thsree or four minutes after 4 being fired. The Russians with their various 8S missiles, 5 the $820, the 88ZZ, the 8833, theObitect States with the OD a) 6 oo° Pershing -2, #.a Germany snd the trouble is tbat it the ~ ~ 7 ~ first knowledge you have that the .esry is firing a missile 8 o at you comes three minutes before it hits its target there's 9 ~ going to be no chance of consulting the President of about ~ 10 w bow you react, the decision will have to be left to cosrputera, z 11 ~ And as we learned in the tragic incident of the shooting 12 ~ dcrwn of the Korean airliner, cos<putters are not infallible. z 13 ~ You may even have learned that in your own business because F 14 ~ computers are operated by human beings, and there's a good 15 ~D saying, garbage in, garbage out. U 16 z Secondly, both sides are beginning to deploy ~ 17 0 very small, very accurate weapons which can carry either U w 18 a nuclear or conventional warheads which means that if these ~ 19 p weapons are coming in your directi on it's very difficult to 20 decide bow to react. Your country has decided to put things H 21 z called flots on the cruise missiles afhich are a carrying 22 nuclear missiles but the problem is to know whether the 23 Russians will believe that it they don't have fiots they 24 won't be carrying nuclear missiles. And the risk is that 25 the deployment on both sides of cruise type missiles which