LOOK / JULY 23, 1968


He is a retired movie actor, a millionaire, a conservative who believes the least government is the best government. He was elected governor of California by a margin of nearly a million, after convincing the white-and-blue-collar voters who crossed party lines to back him that he shared their anxieties: crime in the streets, the Molotov cocktail, rebellious college students, paper-shuffling bureaucrats, the high cost of government. He promised California a "Creative Society," with business executives replacing the politicians he disdains and the intellectuals he is suspicious of.

After 18 months in office, Gov. Ronald Reagan still has the support of most of the Californians who voted for him, according to the polls. And he has done moderately well as a "non-candidate" for the Presidency. Without campaigning in person, he received nearly a quarter of the GOP primary vote in Nebraska and Oregon. He may be a power to negotiate with in Miami as the favorite-son candidate of his 86-man delegation, the second largest at the Republican National Convention.

For all his appeal, Ronald Reagan has detractors. The most powerful of these is Jesse Unruh, the famous and feared Democratic leader of the California Assembly. Unruh says of him: "He's a very attractive personality. He projects himself to the public. He synthesizes their mood to his own position--he's the most common denominator." Then Unruh puts in the shiv:

"As far as he is concerned, government is an unnecessary evil. In his campaign, he played on people's fear of big government. But once he got into office, he found he couldn't do much about it. Now, he's trying to have it both ways--he's become the biggest spender in California history and still spouts economy."

Robert T. Monagan, Republican minority leader of the Assembly, calls Reagan "an intelligent man with amazing insight" who "grabs things quickly." Then Monagan puts in his shiv: "At first, there was a lack of understanding on the part of his staff as to how the legislative process operates. They thought all they had to do was issue a command, and we'd hop to it. This is no longer true, they have learned by hard experience. If they stop being suspicious of all legislators and stop believing that all Democrats are bad, then maybe they can make progress."

This Republican leader's comment has point because the Assembly is dominated 42-38 by Democrats, and the Senate is split evenly. "Look, face the facts." says an influential GOP senator. "Reagan couldn't get a Mother's Day resolution through the legislature."

Do critics expect him "to wave a magic wand"? Reagan asks defensively. After all, hadn't he predicted in his campaign "that it was going to be a long haul . . . that all we could hope to do was slow down the toboggan"?

A ranking Reagan aide, "communications director" Lyn Nofziger, elaborates on that: "The three previous governors were longtime political pros. Reagan came in with no political experience. We all had a helluva lot to learn. Naturally, we made some mistakes. But we made a real effort to live up to the Governor's campaign promises. We've established a climate--which is the first thing you have to do--of responsible government."

Just eight months after he took the oath of office. Reagan issued a 48-page slickly printed booklet, recounting his accomplishments. It claimed he "brought economy to government . . . reversed dangerous financial trends, cut spending, reduced the number of state employees, refused to continue a state debt and insisted on pay-as-we-go financing." It also explained Reagan's Creative Society: "It is a philosophy which suggests that perhaps independent organizations, or even private firms, might be better qualified, equipped and motivated to solve specific problems than bureaus in Sacramento or Washington."

But Reagan also had to learn some bitter lessons during those eight months. The first was that 58 percent of the state's expenditures are mandated by law, mainly for education and welfare, and cannot be cut without legislative approval. Another was that four to seven percent more revenue has to be found every year because of inflation and population pressures.

It sounds incredible, but in 1947-48, California's budget was only $645 million. In 1967-68, Reagan raised taxes $943 million to cover the highest budget in history, nearly $5.1 billion, including a $194 million debt left by Democratic Gov. Edmund G. Brown. The sales tax went up to five cents, and there were new taxes on cigarettes, liquor, banks and corporations. The most painful boost came in the state income tax--which in some cases doubled and tripled--but Reagan proposed payroll withholding on the grounds that "taxes should hurt." For the next fiscal year, Reagan has asked $5.7 billion, the highest state outlay in the country.

Reagan works hard to cut costs, but the amount saved is relatively small. He ordered his secretary to use up his predecessor's leftover letterheads by typing his name over Governor Brown's. He stopped the sending out of free state road maps. He canceled a projected state office building when it was found that 2,000 workers could fit into existing space designed for 1,000.

Bill Boyarsky, Associated Press correspondent who covers the State Capitol, writes in his new book, The Rise of Ronald Reagan: "Throughout the state government maintenance was postponed, car purchases put off, construction cancelled, and other steps taken to show an immediate reduction in the budget. But one day the cars would have to be bought and the new buildings put up, and so there was no long-range saving."

Some of the Governor's attempts at cost-cutting were embarrassing. On Lincoln's Birthday, 1967, a state holiday, he asked the 160,000 state employees "voluntarily" to come to work. Expectantly, Reagan showed up at 8:45 a.m. Few others did. At the state's San Francisco offices, only three of 3,000 workers reported. This year, Reagan stayed home, like everybody else.

Other economies made enemies. The howls were shrill when Reagan cut $45.5 million from the budgets of the nine-campus University of California and the 18 state colleges, suggesting that the students be charged tuition (they pay nominal fees go. The regents refused, as hundreds of students picketed the Capitol and enraged professors complained Reagan was punishing the university for its Berkeley dissenters. The influential Los Angeles Times remarked that Reagan's "image of anti-intellectualism which was not dimmed by a scornful remark he made about universities 'subsidizing intellectual curiosity'--something his friend William F. Buckley, Jr., called Reagan's faux pas of the year." The following year, a similar uproar ended with the levying of a small increase in university fees.

The mental-health community meanwhile became convinced that the conservative Gove rnor Reagan was gunning for it when he announced that he would eliminate as many as 4,000 employees in the Department of Mental Hygiene and would close a number of mentalhealth clinics. Reagan argued that the patient population had gone down 40 percent in the previous four years, but not the number of state-hospital personnel. He whittled $ 11.5 million from the appropriation. Unfortunately for Reagan, just as he was wielding his paring knife, a state commission that had been studying the mental hospitals for over two years reported they were shockingly understaffed. The Governor presumably had been basing his cuts on outmoded 1952 staffing standards. Mental-health people angrily predicted the cuts would lead to "warehousing"--the consigning of patients to large, unattended wards.

"There was a credibility gap here," admits a Reagan spokesman. "Everybody thought the Governor was against mental health when, all along, he intended to improve conditions." Whatever the reasons, this year Reagan permitted the budgeting of $6 million more for mental health and announced he was accepting the commission's recommendations for improving care. However, critics discovered that he was not coming up with the money to pay for improvements. "It's just that he's running for President and was horrified at all the bad publicity he was getting," explains a cynical Democrat.

Reagan went through another chastening experience when he tried his economizing on Medi-Cal, a welfare program in which the state joins the Federal and county governments in providing health care for 1.5 million people, most on relief, but others classified as medically indigent. Reagan, arguing that the program was $210 mil lion in deficit, ordered the elimination of a wide range of medical services. When the California Supreme Court blocked him, he called a special session of the legislature to amend the program and said he was cutting off all 160,000 of the medically indigent. The legislature opposed any revisions and started its own investigation of Medi-Cal costs. Meanwhile, to Reagan's embarrassment, the $210 million deficit turned out to be a $32 million surplus. The fall guy for this fiasco was the Governor's top appointee, finance director Gordon E.Smith, a conservative Republican who had been with a firm of management of consultants. He quit.

Smith's appointment was typical of Reagan's reliance on businessmen. The Governor named as real estate commissioner a past president of the California Real Estate Association, who advocated repeal of the state's open-housing law. He chose a savings and loan executive to supervise savings and loan institutions and banks. He made an agricultural business executive his director of agriculture. As state labor commissioner, a post traditionally held by a representative of labor, he named the general manager of a big bakery.

A Democratic state senator said: "If he wants to appoint a fox to guard the hen house, that's his responsibility."

All top appointments were passed on by a group of ten men, most of them with essentially conservative beliefs, known as Reagan's kitchen cabinet. They include Henry Salvatori, 67, multimillionaire oilman and generous backer of anti-Communist causes, and Holmes P. Tuttle,63, multimillionaire auto dealer.

Some of the kitchen cabinet's members are disappointed Goldwater backers who see in Reagan a chance to bet on a winner--or influence the winner. They raised $2.5 million when Reagan ran for governor, and they now appear eager to raise even more for a higher purpose. The cabinet members meet regularly in various Los Angeles clubs. Sometimes, the Governor sees them on weekends at his home in Pacific Palisades, a scenic part of Los Angeles. They offer Reagan assorted advice. "If I feel like I have to talk to him, I pick up the phone. If I want to see him, I get on the plane," says Holmes Tuttle. (But a Reagan staff member complains about the cabinet: "It's like living in the same house with your mother-in-law." )

Reagan showed his reliance on business when he used 250 executives, paid by their companies, on a detailed study of state government. Their report suggested 1,800 ways to improve efficiency and lower costs; Reagan has already put 300 of them into effect by executive action. There seems nothing wrong with letting private enterprise take a crack at government's problems, but some Californians think Reagan goes overboard. Last year at a sand and gravel convention, he told his listeners that "the West was built without any urban-renewal program." Reagan said he wasn't necessarily recommending abandonment of public welfare, but if every church in America adopted only three welfare families each, the welfare rolls would be cleared. "Every problem that besets us," said the Governor, "from dropouts to disease, from job training to student loans, is being solved someplace in this country by someone who did not wait for government."

Reagan is fond of citing the accomplishments of a 70-year-old former president of the National Association of Manufacturers named H. C. "Chad" McClellan, who practically singlehandedly undertook a campaign to find jobs for thousands of unemployed in Watts and other depressed areas. All this, the Governor says, was done without costing the state one cent. But if you check the story out with McClellan, who is no Socialist, he says: "Look, I've been concentrating on getting industry to help out. But there just can't be too many of us working together, including the state and Federal governments. We in industry can't solve this alone."

It concerns key Reagan advisers that the Governor sometimes comes over as sounding unsympathetic to the poor and underprivileged when, they say, he's really not. Still, to some, he sounds that way. At a conference to ferret out "relief chiselers," Reagan said: "The forgotten American is that fellow living in the suburbs or in a high rise in the middle of town and is working 60 hours a week to provide the advantages for his family, but is being taxed heavily to take care of some other people's problems."

The Governor asked the legislature to save $8 million a year and "remove . . . the incentive to remain on aid" by limiting to $275 a month the payments a mother could receive from Aid to Families with Dependent Children--the same amount she could earn by working if she received the minimum wage.

Reagan believes that "the taxpayer becomes increasingly resentful of the ever-mounting cost of programs which too often appear to him to provide other families with things at his expense that he cannot afford for himself." Present California AFDC budgets provide an individual with $22 a month for food, $1.39 for personal needs and 67 cents for recreation. Reagan's proposed cutbacks would hit hardest at large families. For them, this close budget might be cut in half.

As for the minimum wage, Reagan isn't sure it's a good thing. He asks: "Isn't it possible we've created some of our problems with a minimum wage?" Teen-agers, according to Reagan, would find it easier to get work if employers weren't required to pay $1.60 an hour.

In his '66 election campaign, Reagan hit hard on the issue of crime in the streets and the rising crime rate. Among the few laws he has since gotten through the legislature is one increasing penalties for persons inflicting bodily harm on victims during a robbery, burglary or rape. He also ended a four-year unofficial moratorium on the death penalty by permitting the execution of the convicted killer of a Sacramento policeman. Reagan insists there is a deterrent in strong penalties, disagreeing with a California legislative research team that ret cently concluded the opposite.

There may be somber overtones to Reagan's philosophy, but he remains fairly popular with the voters. Sixty-six percent of them approved of his performance as governor in a May poll, compared with 74 percent a year ago. He has, interestingly, lost some popularity with the Radical Right. "To put it mildly, he has disappointed conservatives," says State Sen. John G. Schmitz, an Orange County Republican who admits belonging to the John Birch Society. "We thought he was the last best . . . hope. It's difficult to give up a dream, and conservatives still cling to the dream he's still their boy--but this view is now more prevalent outside California." Schmitz criticizes Reagan for spending at what he claims is a faster rate than Governor Brown.

No matter, Reagan still steadfastly refuses to disavow Bircher support. Taft Schreiber, vice president of Music Corporation of America, and a political moderate who is a longtime Reagan friend, business agent and kitchen-cabinet member, explains: "He knows maybe a dozen members of the John Birch Society. They are nice people, pressured by a call to arms. Ronnie feels if he denounced the Birch Society, it would include these nice guys."

Is the Reagan program, as some critics insist, a completely negative one of bludget-slashing and just being against things? "Go on, I dare you," a state Senator challenged me. "Ask Reagan when you interview him what three bills he would like to see the legislature pass --any three bills at all."

Sure enough, the Governor was startled when I put the question to him: He hesitated as I pushed the tape-recorder microphone forward. "Yes, tax reform would be one," Reagan answered. "Uh, I suppose I should say the reorganization plan we submitted, and yet I don't feel that strongly.... I want it very much, but we are operating already without it...."

When I pressed him on proposals, the Governor replied: ". . . Tax reform would be the No. 1 priority.... I think you've asked a tough one to answer.. - . [The] crime program that we tried last year.... More flexibility in the area of welfare to do the things--not just for economy--that we think are going to make it possible to break what I call the cycle of dependency.... The problem is just one of priorities. . . . so many of the things we want to do are restricted . . . by the fiscal chaos we inherited."

What this means in practice is that Reagan opposes new programs that cost money. He says wistfully: "If we had a million dollars to hand the forestry department, the state could provide jobs for young men in the coming summer by having them build firebreaks." Reagan crities call this poor-mouthing. California, after all, is one of the richest states, ranking fifth in per capita income.

In foreign affairs, Reagan is a hawk, maybe an eagle. His first reaction after hearing of the U.S.S. Pueblo's capture was that the Navy "should go in and get her back." He has long wanted to "end the war in Vietnam by winning it." To do this, he told me months ago, we should consider mining Haiphong harbor, chasing the enemy in hot pursuit into North Vietnam and keeping North Vietnam off-balance by threatening an invasion.

I asked, what if this led to a nuclear confrontation with the Soviet Union or China? His reply:

"Well, let me ask at what point and at what hot spot in the world that we actually think menaces our shores do we then decide we have to accept that risk? Someplace along the line, aren't we going to have to face the situation of the farmers at Concord Bridge that were debating, as we know in history, did King George really mean to fight or didn't he? And finally, the farmer who sai(l, 'If they mean to have a war, let it start here! ' "

Sitting outside Reagan's open office door for several days, I had a good chance to study the Governor. At 57, he is in vigorous good health, with a body hardened by as much horseback riding as he can get in. He is not the intellectually lazy man his enemies suggest he is, although he remains in his office only from 9 a.m. to 5:30 p.m. Most of the time, he eats lunch in his outer office with administrators or aides. Reagan's staff of 95 is young and hard-working; it keeps a constant flow of problems moving in his direction. Executive Secretary William P. Clark, Jr., 36, a lawyer-rancher, sees that each of the 60 department directors distills his ideas into a one-page mini-memo. In half-inch letters stamped on it, the memo is marked either for Reagan's INFORMATION or DECISION.

At cabinet meetings three times a week, Reagan is very much in command as, with his top appointees, he munches jelly beans from a (desk-top jar and debates the proposals that come up. "He is not an administrator," says a man who works with him. "By background and inclination, he looks to the staff and department heads for administration. He retains an overview of policy and doesn't concern himself with who's going to clean the washrooms."

The temper of the times forces Reagan to be cautious about his safety. He had bulletproof glass put into his two office windows; each pane weighs over half a ton. He rented a big house for his family in preference to the decrepit and less-secure Governor's Mansion. When he gets home at night, his first action is to take a shower and wash off the dust of politics, changing into pajamas and bathrobe. Then he dines with his son Ronald Prescott ("Skipper" ), ten, and his handsome wife, Nancy Davis, a onetime movie actress. (Their daughter Patricia, 15, attends school in Phoenix. Reagan has two grown children, one adopted, by his first marriage, to actress Jane Wyman. )

After dinner, the Governor plays Ping-Pong or billiards with his son in a basement room or watches TV (his favorite program is Mission: Impossible!) Reagan isn't fond of commercials, and when one appears on the screen, he momentarily turns to the memos he. carries home from the Capitol.

The Reagans are very much private persons, loyal to old friends in other parts of the state. The close-knit Sacramento political eommunity senses an aloofness on the Governor's part. To counter this feeling, Reagan regularly has department heads and legislators over for dinner in small groups. Afterward, he may join his guests in singing around the piano. But some guests come away with the impression that Reagan prefers his bathrobe and pajamas to such festivities.

For months, Reagan's name has cropped up in talk about Presidential and Vice Presidential candidates. Officially, he denies any interest in either job. However, his kitchen cabinet has been paying F. Clifton White, the top-drawer political strategist who engineered the 1963-64 draft-Goldwater movement, to keep watch over the preconvention maneuverings. The Reagan people sense omens of a shift toward conservatism around the country, and a Reagan conservativeon the ticket today doesn't seem as remote to them as he might have a year ago. At the least, they hope to influence the party platform. Although Reagan hasn't done any campaigning, he exhibited himself to the party faithful, many of whom will be convention delegates, in several swings around the country last winter and spring, raising millions of dollars at GOP dinners. When audiences see him close up, they are reminded that in a TV political campaign, this old pro would have most prospective candidates of either party at a disadvantage.

As the convention proaches, Reagan appears interested in tidying up his relations with minorities--Negroes in partieular. After meeting recently with California black leaders, he announced he was moderating his longtime position in opposing the state's open-housing law. ". . . They have got some just grievances," he admitted. It may be that Reagan is cautiously moving a bit toward the center.

"The way we look at it," says one of the men who want Reagan to run for President, "is that anything can happen between now and the convention in Miami. All sorts of developments--some created by President Johnson and some caused by external events: inflation, the war in Vietnam, the collapse of the dollar, city riots, trouble in Europe --will affect all the candidates."

Or, as another observer says, "Every candidate this year is standing on a quaking platform of quicksand. Reagan can stand on that platform as well as any of them "