The President. Prime Minister Thatcher, Nancy and I welcome you, Mr. Thatcher, and your daughter, Carol, to this house, and it's my deep hope that as the leaders of two nations whose relationship is vital for the preservation of human freedom that we'll be in close and frequent consultation in the years ahead. Absolute trust between the Prime Minister of the United Kingdom and the President of the United States will continue to be the hallmark of Anglo-American cooperation.

Roosevelt and Churchill, Attlee and Truman, Eisenhower and Macmillan -- these names inseparably linked in recent history -- the legacy of their relationships is nothing less than the security and the freedom enjoyed by our nations today. We will continue in this great tradition, not only because it's essential but also because our two peoples expect and insist on it.

Our joint love of liberty was spawned by a common heritage. It was English history and tradition, with the Magna Carta and the Common Law, which gave birth to our Declaration of Independence. It was men of enormous intellectual capacity and courage -- John Locke, Adam Smith, Thomas Jefferson, Alexander Hamilton, and John Stuart Mill -- whose powerful ideas fed our notions of individual freedom and the dignity of all people.

In her London address last month to the Pilgrim Club the Prime Minister affirmed that her own political convictions are founded in that love of freedom, that rejection of tyranny and repression which inspired the Pilgrim Fathers and those who followed them to America. Well, it's widely known that I share many of your ideals and beliefs, Prime Minister Thatcher. My admiration for you was reinforced during today's productive meeting. I believe, however, that our relationship goes beyond cordiality and shared ideals. In these days the survival of our nations and the peace of the world are threatened by forces which are willing to exert any pressure, test any will, and destroy any freedom.

Survival in this era requires us, as those who preceded us, to take freedom in the palm of our hands and never to cower behind a veil of unrealistic optimism. We shall learn from those who spoke of the need for vigilance, even when speaking out was not popular. Winston Churchill was such a man, a man more than any other who symbolizes the link between our two nations. He was the son of Britain, but the child of a New World woman. His dedication to principle was not without hardship, yet his courage never wavered. We, undeniably, are the beneficiaries of the freedom he loved and the peace that he sought.

He had two nations in his soul, but he touched all nations with his spirit. But today peace, Churchill's peace, is in danger. It may serve us to look to the wisdom of his words. He said, and I shall quote him, ``The peace will not be preserved without the virtues that make victory possible in war. Peace will not be preserved by pious sentiments expressed in terms of platitudes or by official grimaces and diplomatic correctitude, however desirable these may be from time to time. It will not be preserved by casting aside in dangerous years the panoply of warlike strength. There must be earnest thought; there must also be faithful perseverance and foresight. Great Heart must have his sword and armor to guard the pilgrims on their way. Above all, among the English-speaking peoples there must be the union of hearts based upon conviction and common ideals.''

After our discussions today I'm confident that we too will be as Great Heart and guard the world's pilgrims on their way. Together we'll strive to preserve the liberty and peace so cherished by our peoples. No foe of freedom should doubt our resolve. We will prevail, because our faith is strong and our cause is just. And the same Winston Churchill that I quoted with that lovely passage also had the wit and humor that in Canada in the dark days of World War II he could call attention to the fact that the enemy had threatened to wring the neck of the United Kingdom. And after the Battle of Britain, as he was speaking, who will ever forget him leaning over that podium and saying, ``Some chicken. Some neck.'' [Laughter]

I ask you now to honor our most welcome guest this evening and and her country by joining me in a toast to Her Majesty, the Queen. The Queen.

You are very welcome here. We're delighted that you'd come.

The Prime Minister. Mr. President, ladies and gentlemen:

May I first thank you, Mr. President, for your wonderful hospitality this evening, for this remarkably beautiful banquet, and for the lovely music which you arranged for our delight.

I thought as I heard that song ``I'll be seeing you in all the old familiar places,'' this is quite a nice, old familiar place in which to see you, Mr. President. [Laughter] And I hope we'll be able to sing that song for very, very many years. And what was the other? ``There'll be bluebirds over the White Cliffs of Dover tomorrow when the dawn is free.'' Well, the dawn is free now. And you and I have to try to make something of it which would match the hopes of those who made it free.

We started this momentous day on your lawn, Mr. President, in weather that, when it occurs for some public occasion with us, we describe as royal weather. And it's a great pleasure to end the day in your house at this glittering dinner party as guests of you and Mrs. Reagan. We've heard so much of your oratory as a speaker, and it's been such a delight to hear you speak. And I've been very moved by what you've said.

I'm told, Mr. President, that when you and Mrs. Reagan were inspecting your new home, where we're dining this evening, to see what refurbishment was needed, you came across some charred areas, vestiges of certain heated events in 1812. [Laughter] I don't think I need apologize for them, because I'm relieved to hear that Mrs. Reagan saw in this not a source of historical reproach, but an opportunity for redecoration -- [laughter] -- and very beautiful it is.

This sense of renewal that's in the air is making itself felt far beyond this lovely house. You, Mr. President, won a massive victory in November after a marvelous campaign in which you made clear your determination to set your country on a fresh course. You underlined that determination last week in a budget speech which I very much admired and so it seemed to me did all those who heard it.

Mr. President, when you come to visit us in Britain -- and I do hope it will be soon -- you'll find that there's been change and renewal in the Old World too. Indeed, not long ago I was reading a book whose author had visited London shortly after the war. He wrote that ``in spite of the homesickness, the hunger and annoyance at socialist bumbling, my farewell to London held its measure of regret. There were friendships made and cherished to this day.''

Mr. President, you were that homesick and hungry author. You will remember the book which you wrote after, I think, you'd been making a film. Was it ``The Hasty Heart'' in London? Well, I doubt whether I'll be able to do much about your homesickness. You may even feel hunger if you're in search of a real American jellybean in London. [Laughter] But when you do come over, I can promise you two things. The first is the friendship of the British people, and the second, that the years of socialist bumbling are at an end.

I'm proud to lead a Conservative administration in Britain. For me, and I know for you, too, conservatism doesn't mean maintenance of the status quo. It means maintenance of the old values, the only background against which one could make the changes and adaptations which have to be made to keep abreast of the technological change that we need to embrace for a prosperous future. Conservatism means harnessing, but still more, the liberation of the fundamental strengths and resources which make a country great, which make its people prosperous and self-reliant.

As a Conservative I want determined and decisive government. But that's something very different from an all-powerful government. You and I, Mr. President, believe in strong governments in areas where only governments can do the job, areas where governments can and must be strong -- strong in the defense of the nation, strong in protecting law and order, strong in promoting a sound currency. It we do these things very well, we shall indeed be leaders of strong government, doing the things that only government can do.

But for too long and in too many places we've seen government assume the role of universal provider and universal arbiter. In many areas of our daily life there are hard but essential choices to be made. But in a free society those choices ought not to be made by government, but by free men and women and managers and work force alike, whose lives and livelihood are directly affected.

Mr. President, wall-to-wall government is no substitute for that freedom of choice. Wall-to-wall government is economically inefficient and morally demeaning to the individual. Just take a look at those countries where the art has been brought to its cold, callous perfection to see where that leads.

Mr. President, in Britain's case we've set ourselves to reverse a process of industrial decline which has lasted decades. We too seek to release the real energies of the wealth-creating sector in the first place and, above all, by conquering the crippling forces of inflation. We're winning that battle. The cost is heavy, particularly in terms of the present levels of unemployment. But we won't solve that problem just by reflation, whatever the short-term attractions. The only true solution is a revitalized economy, providing real jobs of permanent economic viability. That is our goal, and we're going to stick to it.

Now above all is the time to stay on course. I say that, Mr. President, not least because only a firmly based economy can enable us to act as a strong and effective partner in an alliance -- and that we are determined to be, because an enduring alliance with the United States is fundamental to our beliefs and our objectives. Never in the post-war years has that alliance been more essential to us all. You spoke of Winston Churchill. We all do. Nearly 50 years ago Winston told our two countries that together there is no problem we cannot solve. We are together tonight. Together let us prove him right.

Mr. President, it is my very, very great pleasure to ask the assembled company to rise and drink a toast to our wonderful host, the new leader not only of the United States but of the whole of the Western World. I give you the toast: The President of the United States, President Reagan.

The President. Madam Prime Minister, thank you very much.

And now may I invite all of you to go to the Green and the Blue and the Red Rooms for coffee and liqueurs, and from there then make your way into the East Room, where you started this evening and where we are going to be entertained for a period by the Harlem Ballet.

So, I think we shall lead the way and all have our coffee in there.

[The President spoke at 9:24 p.m. in the State Dining Room at the White House.

Following the entertainment in the East Room, the President spoke at 10:30 p.m. as follows.]

Madam Prime Minister, Mr. Thatcher, Carol, Mr. Vice President, Barbara, all of you ladies and gentlemen:

I don't know how many of you know, this is the Harlem Ballet -- 12 years. Arthur Mitchell, would you stand up?

I think all of these young people here will agree, Arthur Mitchell is the man who had a dream 12 years ago and these young people from Harlem that he took and he put together in this very graceful and beautiful display that we've seen here. Nancy and I saw them a few weeks ago when they opened at the Kennedy Center in a full evening of ballet, and they have kindly come here to entertain us, and we are deeply grateful to them. And I think that what Arthur has done and the pride that he must have in seeing such beauty here on the stage and such grace -- I just said to the Prime Minister while you were dancing, ``Who could lack faith in the human race when they can produce such beauty and grace as we have seen here?''

We thank all of you. Now there's going to be dancing in the foyer, but again, our heartfelt thanks to all of you, and we hope we'll see you again soon.

Thank you.