Being here with so many friends from Mexico, I can't help but take my thoughts back to California. Tonight is reminiscent of the gala evenings in old California, the vineyards, the music, the pride and accomplishments of the Hispanic frontier men and women, individuals who conquered a wilderness, but while doing so, maintained a phenomenal level of dignity. All of this, and more, reflects the character of a people whose legacy is now shared by the citizens of our two countries.

I'm not certain it goes back as far as the hacienda days, but I would like to extend to you a traditional greeting that I've adopted as my own, just as I adopted California. President and Mrs. De la Madrid, mi casa es su casa [my house is your house].

Today we've had frank and fulfilling discussions. Mr. President, I hope you agree with me that although we do not see eye to eye on everything, it is clear that we as individuals, and our two nations as well, remain solid in our friendship and undeterred in our trust.

The good will between us goes far beyond the transitory issues of the day. Our people recognize that issues, even those that seem important at the moment, will someday pass from the scene. What will not change are the many gifts and mandates given to us by God that serve as the basis of our societies. I can't believe that the Lord brought us to this level of political, social, and economic development, that He located us -- the Mexican and American people -- in such proximity and did not intend us to be friends.

In the last 50 years, when people of bordering countries in so many parts of the world were killing each other, or were immersed in envy and hatred, the mutual respect and ever-increasing cooperation between our peoples and governments shined in contrast.

Our trade and commerce is a powerful engine for economic progress for both our countries. The cultural and social ties between our people enrich and add diversity and flavor to our everyday lives. Yet the cement with the strongest grip is found in the ideals and values that our people share.

President Thomas Jefferson, a man so important to the development of human liberty, outlined in his first inaugural address some of the aspirations of our new republic. Although spoken 183 years ago, the words still ring true. Our desire in foreign affairs, he said, was ``equal and exact justice to all men, of whatever state or persuasion, religious or political; peace, commerce and honest friendship with all nations. . . .''

I heard an echo of these sentiments last August in La Paz when you, Mr. President, said, ``Nationalism, cultural identity, freedom, democracy, economic development with social justice, an independent foreign policy, and defense of our territorial integrity are shared values embodied in our national design and vital bonds that link us all.''

Mr. President, if we can be guided by these principles with our shared values and interests overshadowing momentary disagreements, surely the good will between us will endure, and our relationship will continue to shine as an example to others.

And now will all of you join me in a toast to our honored guests -- to President and Mrs. De la Madrid, to their health, and to the continued good will between our two great nations.

President De la Madrid. President Reagan, Mrs. Reagan, may my first words be to express my gratitude for the kind courtesies that we have received during our visit to Washington today. Both during our work meetings and today, during this dinner, we have seen proofs of affectionate and cordial friendship that both my wife, myself, and the members of my party appreciate very much.

This kind of a dialog is also always fruitful. It makes it possible for us to compare our analysis and evaluation, our perceptions of reality, to agree on our similarities, and also to know our differences.

Geography has influenced both of us. It has led us to be neighbors, and it has led us to be friends. Neighbors we are because geography is as it is, but friends is something that comes from our own self. It is a quality of the human being.

Friends always seek to extend areas of consensus and to make their differences smaller, to seek formulas to overcome the problems that come from our close, complex, and very broad relationship. Friendship presupposes all of this. There must be sincerity and frankness, dignity and respect in our dealings, careful examination of our discrepancies and above all, it demands good will.

Differences of opinion are natural and can be explained among human beings. They can be explained among us. Even though Mexico and the United States have often traveled the same road, even though they stem from the same roots, there are differences in our culture, and these differences have made our sensibilities also different. It has come to enrich the human race, because it is variation which is needed for this enrichment. It is not good for everyone to be just the same.

In this way, Americans and Mexicans find themselves face to face with a rich culture and a rich and profound perception of our nationalities. But there are not only differences among us -- or between us; analogies are also evident.

Both nations have rooted their political and social systems in the aspiration to live in freedom, to permanently build democracy, and to seek the equality of opportunity for all. Both nations postulate respect for law and justice as a norm for peaceful and dignified coexistence. And that which makes our two countries similar, Mr. President, is that we are not societies that are frozen and opposed to change. We are societies that are open to change.

We who love freedom must be open to change. We cannot freeze the human spirit. And it is for this reason that we are also obliged to be tolerant.

President Reagan, our conversations have been honorable and cordial. They reflect our common purpose: to extend the areas in which we agree and to reduce our differences. But the road to travel is a long one. The life of individuals has a limit, but the life of nations does not have a historical horizon.

The important thing about this meeting is that we have renewed our will to continue to travel that road as individuals and as nations that are living in good faith. As I said before, during the luncheon that was kindly offered me by Secretary Shultz, we know that you want to have dignified, prosperous, and strong neighbors.

It is very important that a powerful nation such as the United States, which is the most powerful nation of all, can say to the other countries, ``We have neighbors who are dignified; they are not slaves.'' I, therefore, President Reagan, express my hope that this relationship with dignity and cordiality that has been built by the Americans and the Mexicans will always be the common denominator of our relationship, that we shall always be capable with talent and good will to continue to strengthen our friendship to our mutual benefit.

This is the thinking and the will of the Mexican people. And I am certain that there is this same thinking and this same will in the United States. That is why I express my wishes that the relations between Mexico and the United States will always be vigorous, that they may be strengthened by our will to understanding, and because friendship and cooperation is what will bring us together.

I wish to ask you to join me in a toast to the personal happiness of President Reagan and his charming wife, Nancy, to the happiness and prosperity of the American people, and to those values which we cherish, which are freedom, democracy, and justice.

Note: President Reagan spoke at 10 p.m. in the State Dining Room at the White House. President De la Madrid spoke in Spanish, and his remarks were translated by an interpreter.