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Tuesday, 8 December 1953, 2:45 p.m. General Assembly President: Mrs. Vijaya Lakshmi Pandit (India) Madam President and Members of the General Assembly, When Secretary General Hammarskjold's invitation to address the General Assembly reached me in Bermuda, I was just beginning a series of conferences with the prime Ministers and Foreign Ministers of the United Kingdom and France. Our subject was some of the problems that beset our world. During the remainder of the Bermuda Conference, I had constantly in mind that ahead of me lay a great honour. That honour is mine today as I stand here, privileged to address the General Assembly of the United Nations. At the same time that I appreciate the distinction of addressing you, I have a sense of exhilaration as I look upon this Assembly. Never before in history has so much hope for so many people been gathered together in a single organization. Your deliberations and decisions during these sombre years have already realized part of those hopes. But the great tests and the great accomplishments still lie ahead. And in the confident expectation of those accomplishments, I would use the office which, for the time being, I hold, to assure you that the Government of the United States will remain steadfast in its support of this body. This we shall do in the conviction that you will provide a great share of the wisdom, of the courage and of the faith which can bring to this world lasting peace for all nations, and happiness and well-being for all men. Clearly, it would not be fitting for me to take this occasion to present to you a unilateral American report on Bermuda. Nevertheless, I assure you that in our deliberations on that lovely island we sought to invoke those same great concepts of universal peace and human dignity which are so clearly etched in your Charter. Neither would it be a measure of this great opportunity to recite, however hopefully, pious platitudes. I therefore decided that this occasion warranted my saying to you some of the things that have been on the minds and hearts of my legislative and executive associates, and on mine, for a great many months: thoughts I had originally planned to say primarily to the American people. I know that the American people share my deep belief that if a danger exists in the world, it is a danger shared by all; and equally, that if hope exists in the mind of one nation, that hope should be shared by all. Finally, if there is to be advanced any proposal designed to ease even by the smallest measure the tensions of today's world, what more appropriate audience could there be than the members of the General Assembly of the United Nations. I feel impelled to speak today in a language that in a sense is new, one which I, who have spent so much of my life in the military profession, would have preferred never to use. That new language is the language of atomic warfare. The atomic age has moved forward at such a pace that every citizen of the world should have some comprehension, at least in comparative terms, of the extent of this development, of the utmost significance to every one of us.Clearly, if the peoples of the world are to conduct an intelligent search for peace, they must be armed with the significant facts of today's existence. My recital of atomic danger and power is necessarily stated in United States terms, for these are the only incontrovertible facts that I know, I need hardly point out to this Assembly, however, that this subject is global, not merely national in character. On 16 July 1945, the United States set off the world's biggest atomic explosion. Since that date in 1945, the United States of America has conducted forty-two test explosions. Atomic bombs are more than twenty-five times as powerful as the weapons with which the atomic age dawned, while hydrogen weapons are in the ranges of millions of tons of TNT equivalent. Today, the United States stockpile of atomic weapons, which, of course,increases daily, exceeds by many times the total equivalent of the total of all bombs and all shells that came from every plane and every gun in every theatre of war in all the years of the Second World War. A single air group whether afloat or land based, can now deliver to any reachable target a destructive cargo exceeding in power all the bombs that fell on Britain in all the Second World War. In size and variety, the development of atomic weapons has been no less remarkable. The development has been such that atomic weapons have virtually achieved conventional status within our armed services. In the United States,the Army, the Navy, the Air Force and the Marine Corps are all capable of putting this weapon to military use. But the dread secret and the fearful engines of atomic might are not ours alone. In the first place, the secret is possessed by our friends and allies, the United Kingdom and Canada, whose scientific genius made a tremendous contribution to our original discoveries and the designs of atomic bombs. The secret is also known by the Soviet Union. The Soviet Union has informed us that, over recent years, it has devoted extensive resources to atomic weapons. During this period the Soviet Union has exploded a series of atomic devices, including at least one involving thermo-nuclear reactions. If at one time the United States possessed what might have been called a monopoly of atomic power, that monopoly ceased to exist several years ago.Therefore, although our earlier start has permitted us to accumulate what is today a great quantitative advantage, the atomic realities of today comprehend two facts of even greater significance. First, the knowledge now possessed by several nations will eventually be shared by others, possibly all others. Second, even a vast superiority in numbers of weapons, and a consequent capability of devastating retaliation, is no preventive, of itself, against the fearful material damage and toll of human lives that would be inflicted by surprise aggression. The free world, at least dimly aware of these facts, has naturally embarked on a large programme of warning and defence systems. That programme will be accelerated and extended. But let no one think that the expenditure of vast sums for weapons and systems of defence can guarantee absolute safety for the cities and citizens of any nation. The awful arithmetic of the atomic bomb doesn't permit of any such easy solution. Even against the most powerful defence,an aggressor in possession of the effective minimum number of atomic bombs fora surprise attack could probably place a sufficient number of his bombs on the chosen targets to cause hideous damage. Should such an atomic attack be launched against the United States, our reactions would be swift and resolute. But for me to say that the defence capabilities of the United States are such that they could inflict terrible losses upon an aggressor, for me to say that the retaliation capabilities of the United States are so great that such an aggressor's land would be laid waste, all this, while fact, is not the true expression of the purpose and the hopes of the United States. To pause there would be to confirm the hopeless finality of a belief that two atomic colossi are doomed malevolently to eye each other indefinitely across a trembling world. To stop there would be to accept helplessly the probability of civilization destroyed, the annihilation of the irreplaceable heritage of mankind handed down to us from generation to generation, and the condemnation of mankind to begin all over again the age-old struggle upward from savagery towards decency, and right, and justice. Surely no sane member of the human race could discover victory in such desolation. Could anyone wish his name to be coupled by history with such human degradation and destruction?Occasional pages of history do record the faces of the "great destroyers", but the whole book of history reveals mankind's never-ending quest for peace and mankind's God-given capacity to build. It is with the book of history, and not with isolated pages, that the United States will ever wish to be identified. My country wants to be constructive,not destructive. It wants agreements, not wars, among nations. It wants itself to live in freedom and in the confidence that the peoples of every other nation enjoy equally the right of choosing their own way of life. So my country's purpose is to help us to move out of the dark chamber of horrors into the light, to find a way by which the minds of men, the hopes of men, the souls of men everywhere, can move forward towards peace and happiness and well-being. In this quest, I know that we must not lack patience. I know that in a world divided, such as ours today, salvation cannot be attained by one dramatic act.I know that many steps will have to be taken over many months before the world can look at itself one day and truly realize that a new climate of mutually peaceful confidence is abroad in the world. But I know, above all else, that we must start to take these steps - now. The United States and its allies, the United Kingdom and France, have over the past months tried to take some of these steps. Let no one say that we shun the conference table. On the record has long stood the request of the United States, the United Kingdom and France to negotiate with the Soviet Union the problems of a divided Germany. On that record has long stood the request of the same three nations to negotiate an Austrian peace treaty. On the same record still stands the request of the United Nations to negotiate the problems of Korea. Most recently we have received from the Soviet Union what is in effect an expression of willingness to hold a four-Power meeting. Along with our allies,the United Kingdom and France, we were pleased to see that this note did not contain the unacceptable pre-conditions previously put forward. As you already know from our joint Bermuda communique, the United States, the United Kingdom and France have agreed promptly to meet with the Soviet Union. The Government of the United States approaches this conference with hopeful sincerity. We will bend every effort of our minds to the single purpose of emerging from that conference with tangible results towards peace, the only true way of lessening international tension. We never have, and never will, propose or suggest that the Soviet Union surrender what rightly belongs to it. We will never say that the peoples of the USSR are an enemy with whom we have no desire ever to deal or mingle in friendly and fruitful relationship. On the contrary, we hope that this coming conference may initiate a relationship with the Soviet Union which will eventually bring about a freer mingling of the peoples of the East and of the West - the one sure, human way of developing the understanding required for confident and peaceful relations. Instead of the discontent which is now settling upon Eastern Germany,occupied Austria and the countries of Eastern Europe, we seek a harmonious family of free European nations, with none a threat to the other, and least of all a threat to the peoples of the USSR. Beyond the turmoil and strife and misery of Asis, we seek peaceful opportunity for these peoples to develop their natural resources and to elevate their lot. These are not idle words or shallow visions. Behind them lies a story of nations lately come to independence, not as a result of war, but through free grant or peaceful negotiation. There is a record already written of assistance gladly given by nations of the West to needy peoples and to those suffering the temporary effects of famine, drought and natural disaster. These are deeds of peace. They speak more loudly than promises or protestations of peaceful intent. But I do not wish to rest either upon the reiteration of past proposals or the restatement of past deeds. The gravity of the time is such that every new avenue of peace, no matter how dimly discernible, should be explored. There is at least one new avenue of peace which has not been well explored -an avenue now laid out by the General Assembly of the United Nations. In its resolution of 28 November 1953 (resolution 715 (VIII)) this General Assembly suggested: "that the Disarmament Commission study the desirability of establishing a sub-committee consisting of representatives of the Powers principally involved, which should seek in private an acceptable solution and report...on such a solution to the General Assembly and to the Security Council not later than 1 September 1954. The United States, heeding the suggestion of the General Assembly of the United Nations, is instantly prepared to meet privately with such other countries as may be "principally involved", to seek "an acceptable solution" to the atomic armaments race which overshadows not only the peace, but the very life, of the world. We shall carry into these private or diplomatic talks a new conception. The United States would seek more than the mere reduction or elimination of atomic materials for military purposes. It is not enough to take this weapon out of the hands of the soldiers. It must be put into the hands of those who will know how to strip its military casing and adapt it to the arts of peace. The United States knows that if the fearful trend of atomic military build-up can be reversed, this greatest of destructive forces can be developed into a great boon, for the benefit of all mankind. The United States knows that peaceful power from atomic energy is no dream of the future. The capability,already proved, is here today. Who can doubt that, if the entire body of the world's scientists and engineers had adequate amounts of fissionable material with which to test and develop their ideas, this capability would rapidly be transformed into universal, efficient and economic usage? To hasten the day when fear of the atom will begin to disappear from the minds the people and the governments of the East and West, there are certain steps that can be taken now. I therefore make the following proposal. The governments principally involved, to the extent permitted by elementary prudence, should begin now and continue to make joint contributions from their stockpiles of normal uranium and fissionable materials to an international atomic energy agency. We would expect that such an agency would be set up under the aegis of the United Nations. The ratios of contributions, the procedures and other details would properly be within the scope of the "private conversations" I referred to earlier. The United States is prepared to undertake these explorations in good faith.Any partner of the United States acting in the same good faith will find the United States a not unreasonable or ungenerous associate. Undoubtedly, initial and early contributions to this plan would be small in quantity. However, the proposal has the great virtue that it can be undertaken without the irritations and mutual suspicions incident to any attempt to set up a completely acceptable system of world-wide inspection and control. The atomic energy agency could be made responsible for the impounding,storage and protection of the contributed fissionable and other materials. The ingenuity of our scientists will provide special safe conditions under which such a bank of fissionable material can be made essentially immune to surprise seizure. The more important responsibility of this atomic energy agency would be to devise methods whereby this fissionable material would be allocated to serve the peaceful pursuits of mankind. Experts would be mobilized to apply atomic energy to the needs of agriculture, medicine and other peaceful activities. A special purpose would be to provide abundant electrical energy in the power-starved areas of the world. Thus the contributing Powers would be dedicating some of their strength to serve the needs rather than the fears of mankind. The United States would be more than willing - it would be proud to take up with others "principally involved" the development of plans whereby such peaceful use of atomic energy would be expedited. Of those "principally involved" the Soviet Union must, of course, be one. I would be prepared to submit to the Congress of the United States, and with every expectation of approval, any such plan that would, first, encourage world-wide investigation into the most effective peacetime uses of fissionable material, and with the certainty that the investigators had all the material needed for the conducting of all experiments that were appropriate; second,begin to diminish the potential destructive power of the world's atomic stockpiles; third, allow all peoples of all nations to see that, in this enlightened age, the great Powers of the earth, both of the East and of the West, are interested in human aspirations first rather than in building up the armaments of war; fourth, open up a new channel for peaceful discussion and initiative at least a new approach to the many difficult problems that must be solved in both private and public conversations if the world is to shake off the inertia imposed by fear and is to make positive progress towards peace. Against the dark background of the atomic bomb, the United States does not wish merely to present strength, but also the desire and the hope for peace.The coming months will be fraught with fateful decisions. In this Assembly, in the capitals and military headquarters of the world, in the hearts of men everywhere, be they governed or governors, may they be the decisions which will lead this world out of fear and into peace. To the making of these fateful decisions, the United States pledges before you, and therefore before the world, its determination to help solve the fearful atomic dilemma - to devote its entire heart and mind to finding the way by which the miraculous inventiveness of man shall not be dedicated to his death, but consecrated to his life. I again thank representatives for the great honour they have done me in inviting me to appear before them and in listening to me so graciously. Source: https://www.iaea.org/about/history/atoms-for-peace-speech

Truman’s First Annual Message January 21, 1946 [Released January 21, 1946. Dated January 14, 1946] To the Congress of the United States: A quarter century ago the Congress decided that it could no longer consider the financial programs of the various departments on a piecemeal basis. Instead it has called on the President to present a comprehensive Executive Budget. The Congress has shown its satisfaction with that method by extending the budget system and tightening its controls. The bigger and more complex the Federal Program, the more necessary it is for the Chief Executive to submit a single budget for action by the Congress. At the same time, it is clear that the budgetary program and the general program of the Government are actually inseparable. The president bears the responsibility for recommending to the Congress a comprehensive set of proposals on all Government activities and their financing. In formulating policies, as in preparing budgetary estimates, the Nation and the Congress have the right to expect the President to adjust and coordinate the views of the various departments and agencies to form a unified program. And that program requires consideration in connection with the Budget, which is the annual work program of the Government. Since our programs for this period which combines war liquidation with reconversion to a peacetime economy are inevitably large and numerous it is imperative that they be planned and executed with the utmost efficiency and the utmost economy. We have cut the war program to the maximum extent consistent with national security. We have held our peacetime programs to the level necessary to our national well-being and the attainment of our postwar objectives. Where increased programs have been recommended, the increases have been held as low as is consistent with these goals. I can assure the Congress of the necessity of these programs. I can further assure the Congress that the program as a whole is well within our capacity to finance it. All the programs I have recommended for action are included in the Budget figures. For these reasons I have chosen to combine the customary Message on the State of the Union with the annual Budget Message, and to include in the Budget not only estimates for functions authorized by the Congress, but also for those which I recommend for its action. I am also transmitting herewith the Fifth Quarterly Report of the Director of War Mobilization and Reconversion. It is a comprehensive discussion of the present state of the reconversion program and of the immediate and long-range needs and recommendations. This constitutes, then, as complete a report as I find it possible to prepare now. It constitutes a program of government in relation to the Nation's needs. With the growing responsibility of modern government to foster economic expansion and to promote conditions that assure full and steady employment opportunities, it has become necessary to formulate and determine the Government program in the light of national economic conditions as a whole. In both the executive and the legislative branches we must make arrangements which will permit us to formulate the Government program in that light. Such an approach has become imperative if the American political and economic system is to succeed under the conditions of economic instability and uncertainty which we have to face. The Government needs to assure business, labor, and agriculture that Government policies will take due account of the requirements of a full employment economy. The lack of that assurance would, I believe, aggravate the economic instability. With the passage of a full employment bill which I confidently anticipate for the very near future, the executive and legislative branches of government will be empowered to devote their best talents and resources in subsequent years to preparing and acting on such a program. I. FROM WAR TO PEACE--THE YEAR OF DECISION In his last Message on the State of the Union, delivered one year ago, President Roosevelt said: "This new year of 1945 can be the greatest year of achievement in human history. "1945 can see the final ending of the Nazi-Fascist reign of terror in Europe. "1945 can see the closing in of the forces of retribution about the center of the malignant power of imperialistic Japan. "Most important of all--1945 can and must see the substantial beginning of the organization of world peace." All those hopes, and more, were fulfilled in the year 1945. It was the greatest year of achievement in human history. It saw the end of the Nazi-Fascist terror in Europe, and also the end of the malignant power of Japan. And it saw the substantial beginning of world organization for peace. These momentous events became realities because of the steadfast purpose of the United Nations and of the forces that fought for freedom under their flags. The plain fact is that civilization was saved in 1945 by the United Nations. Our own part in this accomplishment was not the product of any single service. Those who fought on land, those who fought on the sea, and those who fought in the air deserve equal credit. They were supported by other millions in the armed forces who through no fault of their own could not go overseas and who rendered indispensable service in this country. They were supported by millions in all levels of government, including many volunteers, whose devoted public service furnished basic organization and leadership. They were also supported by the millions of Americans in private life--men and women in industry, in commerce, on the farms, and in all manner of activity on the home front--who contributed their brains and their brawn in arming, equipping, and feeding them. The country was brought through four years of peril by an effort that was truly national in character. Everlasting tribute and gratitude will be paid by all Americans to those brave men who did not come back, who will never come back--the 330,000 who died that the Nation might live and progress. All Americans will also remain deeply conscious of the obligation owed to that larger number of soldiers, sailors, and marines who suffered wounds and sickness in their service. They may be certain that their sacrifice will never be forgotten or their needs neglected. The beginning of the year 1946 finds the United States strong and deservedly confident. We have a record of enormous achievements as a democratic society in solving problems and meeting opportunities as they developed. We find ourselves possessed of immeasurable advantages--vast and varied natural resources; great plants, institutions, and other facilities; unsurpassed technological and managerial skills; an alert, resourceful, and able citizenry. We have in the United States Government rich resources in information, perspective, and facilities for doing whatever may be found necessary to do in giving support and form to the widespread and diversified efforts of all our people. And for the immediate future the business prospects are generally so favorable that there is danger of such feverish and opportunistic activity that our grave postwar problems may be neglected. We need to act now with full regard for pitfalls; we need to act with foresight and balance. We should not be lulled by the immediate alluring prospects into forgetting the fundamental complexity of modern affairs, the catastrophe that can come in this complexity, or the values that can be wrested from it. But the long-range difficulties we face should no more lead to despair than our immediate business prospects should lead to the optimism which comes from the present short-range prospect. On the foundation of our victory we can build a lasting peace, with greater freedom and security for mankind in our country and throughout the world. We will more certainly do this if we are constantly aware of the fact that we face crucial issues and prepare now to meet them. To achieve success will require both boldness in setting our sights and caution in steering our way on an uncharted course. But we have no luxury of choice. We must move ahead. No return to the past is possible. Our Nation has always been a land of great opportunities for those people of the world who sought to become part of us. Now we have become a land of great responsibilities to all the people of all the world. We must squarely recognize and face the fact of those responsibilities. Advances in science, in communication, in transportation, have compressed the world into a community. The economic and political health of each member of the world community bears directly on the economic and political health of each other member. The evolution of centuries has brought us to a new era in world history in which manifold relationships between nations must be formalized and developed in new and intricate ways. The United Nations Organization now being established represents a minimum essential beginning. It must be developed rapidly and steadily. Its work must be amplified to fill in the whole pattern that has been outlined. Economic collaboration, for example, already charted, now must be carried on as carefully and as comprehensively as the political and security measures. It is important that the nations come together as States in the Assembly and in the Security Council and in the other specialized assemblies and councils that have been and will be arranged. But this is not enough. Our ultimate security requires more than a process of consultation and compromise. It requires that we begin now to develop the United Nations Organization as the representative of the world as one society. The United Nations Organization, if we have the will adequately to staff it and to make it work as it should, will provide a great voice to speak constantly and responsibly in terms of world collaboration and world well-being. There are many new responsibilities for us as we enter into this new international era. The whole power and will and wisdom of our Government and of our people should be focused to contribute to and to influence international action. It is intricate, continuing business. Many concessions and adjustments will be required. The spectacular progress of science in recent years makes these necessities more vivid and urgent. That progress has speeded internal development and has changed world relationships so fast that we must realize the fact of a new era. It is an era in which affairs have become complex and rich in promise. Delicate and intricate relationships, involving us all in countless ways, must be carefully considered. On the domestic scene, as well as on the international scene, we must lay a new and better foundation for cooperation. We face a great peacetime venture; the challenging venture of a free enterprise economy making full and effective use of its rich resources and technical advances. This is a venture in which business, agriculture, and labor have vastly greater opportunities than heretofore. But they all also have vastly greater responsibilities. We will not measure up to those responsibilities by the simple return to "normalcy" that was tried after the last war. The general objective, on the contrary, is to move forward to find the way in time of peace to the full utilization and development of our physical and human resources that were demonstrated so effectively in the war. To accomplish this, it is not intended that the Federal Government should do things that can be done as well for the Nation by private enterprise, or by State and local governments. On the contrary, the war has demonstrated how effectively we can organize our productive system and develop the potential abilities of our people by aiding the efforts of private enterprise. As we move toward one common objective there will be many and urgent problems to meet. Industrial peace between management and labor will have to be achieved--through the process of collective bargaining--with Government assistance but not Government compulsion. This is a problem which is the concern not only of management, labor, and the Government, but also the concern of every one of us. Private capital and private management are entitled to adequate reward for efficiency, but business must recognize that its reward results from the employment of the resources of the Nation. Business is a public trust and must adhere to national standards in the conduct of its affairs. These standards include as a minimum the establishment of fair wages and fair employment practices. Labor also has its own new peacetime responsibilities. Under our collective bargaining system, which must become progressively more secure, labor attains increasing political as well as economic power, and this, as with all power, means increased responsibility. The lives of millions of veterans and war workers will be greatly affected by the success or failure of our program of war liquidation and reconversion. Their transition to peacetime pursuits will be determined by our efforts to break the bottlenecks in key items of production, to make surplus property immediately available where it is needed, to maintain an effective national employment service, and many other reconversion policies. Our obligations to the people who won the war will not be paid if we fail to prevent inflation and to maintain employment opportunities. While our peacetime prosperity will be based on the private enterprise the government can and must assist in many ways. It is the Government's responsibility to see that our economic system remains competitive, that new businesses have adequate opportunities, and that our national resources are restored and improved. Government must realize the effect of its operations on the whole economy. It is the responsibility of Government to gear its total program to the achievement of full production and full employment. Our basic objective--toward which all others lead--is to improve the welfare of the American people. In addition to economic prosperity, this means that we use social security in the fullest sense of the word. And people must be protected from excessive want during old age, sickness, and unemployment. Opportunities for a good economy and adequate medical care must be readily available. Every family should build a decent home. The new economic rights to which I have referred on previous occasions is a charter of economic freedom which seeks to assure that all who will may work toward their own security and the general advancement; that we become a well-housed people, a well-nourished people, an educated people, a people socially and economically secure, an alert and responsible people. These and other problems which may face us can be met by the cooperation of all of us in furthering a positive and well-balanced Government program--a program which will further national and international well-being. II. THE FEDERAL PROGRAM INTERNATIONAL AFFAIRS I. FOREIGN POLICY The year 1945 brought with it the final defeat of our enemies. There lies before us now the work of building a just and enduring peace. Our most immediate task toward that end is to deprive our enemies completely and forever of their power to start another war. Of even greater importance to the preservation of international peace is the need to preserve the wartime agreement of the United Nations and to direct it into the ways of peace. Long before our enemies surrendered, the foundations had been laid on which to continue this unity in the peace to come. The Atlantic meeting in 1941 and the conferences at Casablanca, Quebec, Moscow, Cairo, Tehran, and Dumbarton Oaks each added a stone to the structure. Early in 1945, at Yalta, the three major powers broadened and solidified this base of understanding. There fundamental decisions were reached concerning the occupation and control of Germany. There also a formula was arrived at for the interim government of the areas in Europe which were rapidly being wrested from Nazi control. This formula was based on the policy of the United States that people be permitted to choose their own form of government by their own freely expressed choice without interference from any foreign source. At Potsdam, in July 1945, Marshal Stalin, Prime Ministers Churchill and Attlee, and I met to exchange views primarily with respect to Germany. As a result, agreements were reached which outlined broadly the policy to be executed by the Allied Control Council. At Potsdam there was also established a Council of Foreign Ministers which convened for the first time in London in September. The Council is about to resume its primary assignment of drawing up treaties of peace with Italy, Rumania, Bulgaria, Hungary, and Finland. In addition to these meetings, and, in accordance with the agreement at Yalta, the Foreign Ministers of Great Britain, the Soviet Union, and the United States conferred together in San Francisco last spring, in Potsdam in July, in London in September, and in Moscow in December. These meetings have been useful in promoting understanding and agreement among the three governments. Simply to name all the international meetings and conferences is to suggest the size and complexity of the undertaking to prevent international war in which the United States has now enlisted for the duration of history. It is encouraging to know that the common effort of the United Nations to learn to live together did not cease with the surrender of our enemies. When difficulties arise among us, the United States does not propose to remove them by sacrificing its ideals or its vital interests. Neither do we propose, however, to ignore the ideals and vital interests of our friends. Last February and March an Inter-American Conference on Problems of War and Peace was held in Mexico City. Among the many significant accomplishments of that Conference was an understanding that an attack by any country against any one of the sovereign American republics would be considered an act of aggression against all of them; and that if such an attack were made or threatened, the American republics would decide jointly, through consultations in which each republic has equal representation, what measures they would take for their mutual protection. This agreement stipulates that its execution shall be in full accord with the Charter of the United Nations Organization. The first meeting of the General Assembly of the United Nations now in progress in London marks the real beginning of our bold adventure toward the preservation of world peace, to which is bound the dearest hope of men. We have solemnly dedicated ourselves and all our will to the success of the United Nations Organization. For this reason we have sought to insure that in the peacemaking the smaller nations shall have a voice as well as the larger states. The agreement reached at Moscow last month preserves this opportunity in the making of peace with Italy, Rumania, Bulgaria, Hungary, and Finland. The United States intends to preserve it when the treaties with Germany and Japan are drawn. It will be the continuing policy of the United States to use all its influence to foster, support, and develop the United Nations Organization in its purpose of preventing international war. If peace is to endure it must rest upon justice no less than upon power. The question is how justice among nations is best achieved. We know from day-to-day experience that the chance for a just solution is immeasurably increased when everyone directly interested is given a voice. That does not mean that each must enjoy an equal voice, but it does mean that each must be heard. Last November, Prime Minister Attlee, Prime Minister MacKenzie King, and I announced our proposal that a commission be established within the framework of the United Nations to explore the problems of effective international control of atomic energy. The Soviet Union, France, and China have joined us in the purpose of introducing in the General Assembly a resolution for the establishment of such a commission. Our earnest wish is that the work of this commission go forward carefully and thoroughly, but with the greatest dispatch. I have great hope for the development of mutually effective safeguards which will permit the fullest international control of this new atomic force. I believe it possible that effective means can be developed through the United Nations Organization to prohibit, outlaw, and prevent the use of atomic energy for destructive purposes. The power which the United States demonstrated during the war is the fact that underlies every phase of our relations with other countries. We cannot escape the responsibility which it thrusts upon us. What we think, plan, say, and do is of profound significance to the future of every corner of the world. The great and dominant objective of United States foreign policy is to build and preserve a just peace. The peace we seek is not peace for twenty years. It is permanent peace. At a time when massive changes are occurring with lightning speed throughout the world, it is often difficult to perceive how this central objective is best served in one isolated complex situation or another. Despite this very real difficulty, there are certain basic propositions to which the United States adheres and to which we shall continue to adhere. One proposition is that lasting peace requires genuine understanding and active cooperation among the most powerful nations. Another is that even the support of the strongest nations cannot guarantee a peace unless it is infused with the quality of justice for all nations. On October 27, 1945, I made, in New York City, the following public statement of my understanding of the fundamental foreign policy of the United States. I believe that policy to be in accord with the opinion of the Congress and of the people of the United States. I believe that that policy carries out our fundamental objectives. 1. We seek no territorial expansion or selfish advantage. We have no plans for aggression against any other state, large or small. We have no objective which need clash with the peaceful aims of any other nation. 2. We believe in the eventual return of sovereign rights and self-government to all peoples who have been deprived of them by force. 3. We shall approve no territorial changes in any friendly part of the world unless they accord with the freely expressed wishes of the people concerned. 4. We believe that all peoples who are prepared for self-government should be permitted to choose their own form of government by their own freely expressed choice, without interference from any foreign source. That is true in Europe, in Asia, in Africa, as well as in the Western Hemisphere. 5. By the combined and cooperative action of our war allies, we shall help the defeated enemy states establish peaceful democratic governments of their own free choice. And we shall try to attain a world in which nazism, fascism, and military aggression cannot exist. 6. We shall refuse to recognize any government imposed upon any nation by the force of any foreign power. In some cases it may be impossible to prevent forceful imposition of such a government. But the United States will not recognize any such government. 7. We believe that all nations should have the freedom of the seas and equal rights to the navigation of boundary rivers and waterways and of rivers and waterways which pass through more than one country. 8. We believe that all states which are accepted in the society of nations should have access on equal terms to the trade and the raw materials of the world. 9. We believe that the sovereign states of the Western Hemisphere, without interference from outside the Western Hemisphere, must work together as good neighbors in the solution of their common problems. 10. We believe that full economic collaboration between all nations, great and small, is essential to the improvement of living conditions all over the world, and to the establishment of freedom from fear and freedom from want. 11. We shall continue to strive to promote freedom of expression and freedom of religion throughout the peace-loving areas of the world. 12. We are convinced that the preservation of peace between nations requires a United Nations Organization composed of all the peace-loving nations of the world who are willing jointly to use force, if necessary, to insure peace. That is our foreign policy. We may not always fully succeed in our objectives. There may be instances where the attainment of those objectives is delayed. But we will not give our full sanction and approval to actions which fly in the face of these ideals. The world has a great stake in the political and economic future of Germany. The Allied Control Council has now been in operation there for a substantial period of time. It has not met with unqualified success. The accommodation of varying views of four governments in the day-to-day civil administration of occupied territory is a challenging task. In my judgment, however, the Council has made encouraging progress in the face of most serious difficulties. It is my purpose at the earliest practicable date to transfer from military to civilian personnel the execution of United States participation in the government of occupied territory in Europe. We are determined that effective control shall be maintained in Germany until we are satisfied that the German people have regained the right to a place of honor and respect. On the other side of the world, a method of international cooperation has recently been agreed upon for the treatment of Japan. In this pattern of control, the United States, with the full approval of its partners, has retained primary authority and primary responsibility. It will continue to do so until the Japanese people, by their own freely expressed choice, choose their own form of government. Our basic policy in the Far East is to encourage the development of a strong, independent, united, and democratic China. That has been the traditional policy of the United States. At Moscow the United States, the Union of Soviet Socialist Republics, and Great Britain agreed to further this development by supporting the efforts of the national' government and nongovernmental Chinese political elements in bringing about cessation of civil strife and in broadening the basis of representation in the Government. That is the policy which General Marshall is so ably executing today. It is the purpose of the Government of the United States to proceed as rapidly as is practicable toward the restoration of the sovereignty of Korea and the establishment of a democratic government by the free choice of the people of Korea. At the threshold of every problem which confronts us today in international affairs is the appalling devastation, hunger, sickness, and pervasive human misery that mark so many areas of the world. By joining and participating in the work of the United Nations Relief and Rehabilitation Administration the United States has directly recognized and assumed an obligation to give such relief assistance as is practicable to millions of innocent and helpless victims of the war. The Congress has earned the gratitude of the world by generous financial contributions to the United Nations Relief and Rehabilitation Administration. We have taken the lead, modest though it is, in facilitating under our existing immigration quotas the admission to the United States of refugees and displaced persons from Europe. We have joined with Great Britain in the organization of a commission to study the problem of Palestine. The Commission is already at work and its recommendations will be made at an early date. The members of the United Nations have paid us the high compliment of choosing the United States as the site of the United Nations headquarters. We shall be host in spirit as well as in fact, for nowhere does there abide a fiercer determination that this peace shall live than in the hearts of the American people. It is the hope of all Americans that in time future historians will speak not of World War I and World War II, but of the first and last world wars. 2. FOREIGN ECONOMIC POLICY The foreign economic policy of the United States is designed to promote our own prosperity, and at the same time to aid in the restoration and expansion of world markets and to contribute thereby to world peace and world security. We shall continue our efforts to provide relief from the devastation of war, to alleviate the sufferings of displaced persons, to assist in reconstruction and development, and to promote the expansion of world trade. We have already joined the International Monetary Fund and the International Bank for Reconstruction and Development. We have expanded the Export-Import Bank and provided it with additional capital. The Congress has renewed the Trade Agreements Act which provides the necessary framework within which to negotiate a reduction of trade barriers on a reciprocal basis. It has given our support to the United Nations Relief and Rehabilitation Administration. In accordance with the intentions of the Congress, lend-lease, except as to continuing military lend-lease in China, was terminated upon the surrender of Japan. The first of the lend-lease settlement agreements has been completed with the United Kingdom. Negotiations with other lend-lease countries are in progress. In negotiating these agreements, we intend to seek settlements which will not encumber world trade through war debts of a character that proved to be so detrimental to the stability of the world economy after the last war. We have taken steps to dispose of the goods which on VJ-day were in the lend-lease pipe line to the various lend-lease countries and to allow them long-term credit for the purpose where necessary. We are also making arrangements under which those countries may use the lend-lease inventories in their possession and acquire surplus property abroad to assist in their economic rehabilitation and reconstruction. These goods will be accounted for at fair values. The proposed loan to the United Kingdom, which I shall recommend to the Congress in a separate message, will contribute to easing the transition problem of one of our major partners in the war. It will enable the whole sterling area and other countries affiliated with it to resume trade on a multilateral basis. Extension of this credit will enable the United Kingdom to avoid discriminatory trade arrangements of the type which destroyed freedom of trade during the 1930's. I consider the progress toward multilateral trade which will be achieved by this agreement to be in itself sufficient warrant for the credit. The view of this Government is that, in the longer run, our economic prosperity and the prosperity of the whole world are best served by the elimination of artificial barriers to international trade, whether in the form of unreasonable tariffs or tariff preferences or commercial quotas or embargoes or the restrictive practices of cartels. The United States Government has issued proposals for the expansion of world trade and employment to which the Government of the United Kingdom has given its support on every important issue. These proposals are intended to form the basis for a trade and employment conference to be held in the middle of this year. If that conference is a success, I feel confident that the way will have been adequately prepared for an expanded and prosperous world trade. We shall also continue negotiations looking to the full and equitable development of facilities for transportation and communications among nations. The vast majority of the nations of the world have chosen to work together to achieve, on a cooperative basis, world security and world prosperity. The effort cannot succeed without full cooperation of the United States. To play our part, we must not only resolutely carry out the foreign policies we have adopted but also follow a domestic policy which will maintain full production and employment in the United States. A serious depression here can disrupt the whole fabric of the world economy. 3. OCCUPIED COUNTRIES The major tasks of our Military Establishment in Europe following VE-day, and in the Pacific since the surrender of Japan, have been those of occupation and military government. In addition we have given much needed aid to the peoples of the liberated countries. The end of the war in Europe found Germany in a chaotic condition. Organized government had ceased to exist, transportation systems had been wrecked, cities and industrial facilities had been bombed into ruins. In addition to the tasks of occupation we had to assume all of the functions of government. Great progress has been made in the repatriation of displaced persons and of prisoners of war. Of the total of 3,500,000 displaced persons found in the United States zone only 460,000 now remain. The extensive complications involved by the requirement of dealing with three other governments engaged in occupation and with the governments of liberated countries require intensive work and energetic cooperation. The influx of some 2 million German refugees into our zone of occupation is a pressing problem, making exacting demands upon an already overstrained internal economy. Improvements in the European economy during 1945 have made it possible for our military authorities to relinquish to the governments of all liberated areas, or to the United Nations Relief and Rehabilitation Administration, the responsibility for the provision of food and other civilian relief supplies. The Army's responsibilities in Europe extend now only to our zones of occupation in Germany and Austria and to two small areas in northern Italy. By contrast with Germany, in Japan we have occupied a country still possessing an organized and operating governmental system. Although severely damaged, the Japanese industrial and transportation systems have been able to insure at least a survival existence for the population. The repatriation of Japanese military and civilian personnel from overseas is proceeding as rapidly as shipping and other means permit. In order to insure that neither Germany nor Japan will again be in a position to wage aggressive warfare, the armament making potential of these countries is being dismantled and fundamental changes in their social and political structures are being effected. Democratic systems are being fostered to the end that the voice of the common man may be heard in the councils of his government. For the first time in history the legal culpability of war makers is being determined. The trials now in progress in Nurnberg-and those soon to begin in Tokyo--bring before the bar of international justice those individuals who are charged with the responsibility for the sufferings of the past six years. We have high hope that this public portrayal of the guilt of these evildoers will bring wholesale and permanent revulsion on the part of the masses of our former enemies against war, militarism, aggression, and notions of race superiority. 4. DEMOBILIZATION OF OUR ARMED FORCES The cessation of active campaigning does not mean that we can completely disband our fighting forces. For their sake and for the sake of their loved ones at home, I wish that we could. But we still have the task of clinching the victories we have won--of making certain that Germany and Japan can never again wage aggressive warfare, that they will not again have the means to bring on another world war. The performance of that task requires that, together with our allies, we occupy the hostile areas, complete the disarmament of our enemies, and take the necessary measures to see to it that they do not rearm. As quickly as possible, we are bringing about the reduction of our armed services to the size required for these tasks of occupation and disarmament. The Army and the Navy are following both length-of-service and point systems as far as possible in releasing men and women from the service. The points are based chiefly on length and character of service, and on the existence of dependents. Over 5 million from the Army have already passed through the separation centers. The Navy, including the Marine Corps and the Coast Guard, has discharged over one and a half million. Of the 12 million men and women serving in the Army and Navy at the time of the surrender of Germany, one-half have already been released. The greater part of these had to be brought back to this country from distant parts of the world. Of course there are cases of individual hardship in retention of personnel in the service. There will be in the future. No system of such size can operate to perfection. But the systems are rounded on fairness and justice, and they are working at full speed. We shall try to avoid mistakes, injustices, and hardship--as far as humanly possible. We have already reached the point where shipping is no longer the bottleneck in the return of troops from the European theater. The governing factor now has become the requirement for troops in sufficient strength to carry out their missions. In a few months the same situation will exist in the Pacific. By the end of June, 9 out of 10 who were serving in the armed forces on VE-day will have been released. Demobilization will continue thereafter, but at a slower rate, determined by our military responsibilities. Our national safety and the security of the world will require substantial armed forces, particularly in overseas service. At the same time it is imperative that we relieve those who have already done their duty, and that we relieve them as fast as we can. To do that, the Army and the Navy are conducting recruiting drives with considerable success. The Army has obtained nearly 400,000 volunteers in the past four months, and the Navy has obtained 80,000. Eighty percent of these volunteers for the regular service have come from those already with the colors. The Congress has made it possible to offer valuable inducements to those who are eligible for enlistment. Every effort will be made to enlist the required number of young men. The War and Navy Departments now estimate that by a year from now we still will need a strength of about 2 million including officers, for the armed forces--Army, Navy, and Air. I have reviewed their estimates and believe that the safety of the Nation will require the maintenance of an armed strength of this size for the calendar year that is before us. In case the campaign for volunteers does not produce that number, it will be necessary by additional legislation to extend the Selective Service Act beyond May 16, the date of expiration under existing law. That is the only way we can get the men and bring back our veterans. There is no other way. Action along this line should not be postponed beyond March, in order to avoid uncertainty and disruption. DOMESTIC AFFAIRS I. THE ECONOMIC OUTLOOK Prophets of doom predicted that the United States could not escape a runaway inflation during the war and an economic collapse after the war. These predictions have not been borne out. On the contrary, the record of economic stabilization during the war and during the period of reconversion has been an outstanding accomplishment. We know, however, that nothing is as dangerous as overconfidence, in war or in peace. We have had to fight hard to hold the line. We have made strenuous efforts to speed reconversion. But neither the danger of a postwar inflation nor of a subsequent collapse in production and employment is yet overcome. We must base our policies not on unreasoning optimism or pessimism but upon a candid recognition of our objectives and upon a careful analysis of foreseeable trends. Any precise appraisal of the economic outlook at this time is particularly difficult. The period of demobilization and reconversion is fraught with uncertainties. There are also serious gaps in our statistical information. Certain tendencies are, however, fairly clear and recognition of them should serve as background for the consideration of next year's Federal Program. In general, the outlook for business is good, and it is likely to continue to be good--provided we control inflation and achieve peace in management labor relations. Civilian production and employment can be expected to increase throughout the next year. This does not mean, however, that continuing full employment is assured. It is probable that demobilization of the armed forces will proceed faster than the increase in civilian employment opportunities. Even if substantial further withdrawals from the labor market occur, unemployment will increase temporarily. The extent to which this unemployment will persist depends largely on the speed of industrial expansion and the effectiveness of the policies of the Federal Government. Along with extraordinary demand there are still at this time many critical shortages resulting from the war. These extraordinary demands and shortages may lead to a speculative boom, especially in the price of securities, real estate, and inventories. Therefore, our chief worry still is inflation. While we control this inflationary pressure we must look forward to the time when this extraordinary demand will subside. It will be years before we catch up with the demand for housing. The extraordinary demand for other durable goods, for the replenishment of inventories, and for exports may be satisfied earlier. No backlog of demand can exist very long in the face of our tremendous productive capacity. We must expect again to face the problem of shrinking demand and consequent slackening in sales, production, and employment. This possibility of a deflationary spiral in the future will exist unless we now plan and adopt an effective full employment program. 2. GENERAL POLICIES--IMMEDIATE AND LONG-RANGE During the war, production for civilian use was limited by war needs and available manpower. Economic stabilization required measures, to spread limited supplies equitably by rationing, price controls, increased taxes, savings bond campaigns, and credit controls. Now, with the surrender of our enemies, economic stabilization requires that policies be directed toward promoting an increase in supplies at low unit prices. We must encourage the development of resources and enterprises in all parts of the country, particularly in underdeveloped areas. For example, the establishment of new peacetime industries in the Western States and in the South would, in my judgment, add to existing production and markets rather than merely bring about a shifting of production. I am asking the Secretaries of Agriculture, Commerce, and Labor to explore jointly methods for stimulating new industries, particularly in areas with surplus agricultural labor. We must also aid small businessmen and particularly veterans who are competent to start their own businesses. The establishment and development of efficient small business ventures, I believe, will not take away from, but rather will add to, the total business of all enterprises. Even with maximum encouragement of Production, we cannot hope to remove scarcities within a short time. The most serious deficiencies will persist in the fields of residential housing, building materials, and consumers' durable goods. The critical situation makes continued rent control, price control, and priorities, allocations, and inventory controls absolutely essential. Continued control of consumer credit will help to reduce the pressure on prices of durable goods and will also prolong the period during which the backlog demand will be effective. While we are meeting these immediate needs we must look forward to a long-range program of security and increased standard of living. The best protection of purchasing power is a policy of full production and full employment opportunities. Obviously, an employed worker is a better customer than an unemployed worker. There always will be, however, some frictional unemployment. In the present period of transition we must deal with such temporary unemployment as results from the fact that demobilization will proceed faster than reconversion or industrial expansion. Such temporary unemployment is probably unavoidable in a period of rapid change. The unemployed worker is a victim of conditions beyond his control. He should be enabled to maintain a reasonable standard of living for himself and his family. The most serious difficulty in the path of reconversion and expansion is the establishment of a fair wage structure. The ability of labor and management to work together, and the wage and price policies which they develop, are social and economic issues of first importance. Both labor and management have a special interest. Labor's interest is very direct and personal because working conditions, wages, and prices affect the very life and happiness of the worker and his family. Management has a no less direct interest because on management rests the responsibility for conducting a growing and prosperous business. But management and labor have identical interests in the long run. Good wages mean good markets. Good business means more jobs and better wages. In this age of cooperation and in our highly organized economy the problems of one very soon become the problems of all. Better human relationships are an urgent need to which organized labor and management should address themselves. No government policy can make men understand each other, agree, and get along unless they conduct themselves in a way to foster mutual respect and good will. The Government can, however, help to develop machinery which, with the backing of public opinion, will assist labor and management to resolve their disagreements in a peaceful manner and reduce the number and duration of strikes. All of us realize that productivity--increased output per man--is in the long run the basis of our standard of living. Management especially must realize that if labor is to work wholeheartedly for an increase in production, workers must be given a just share of increased output in higher wages. Most industries and most companies have adequate leeway within which to grant substantial wage increases. These increases will have a direct effect in increasing consumer demand to the high levels needed. Substantial wage increases are good business for business because they assure a large market for their products; substantial wage increases are good business for labor because they increase labor's standard of living; substantial wage increases are good business for the country as a whole because capacity production means an active, healthy, friendly citizenry enjoying the benefits of democracy under our free enterprise system. Labor and management in many industries have been operating successfully under the Government's wage-price policy. Upward revisions of wage scales have been made in thousands of establishments throughout the Nation since VJ-day. It is estimated that about 6 million workers, or more than 20 percent of all employees in nonagricultural and nongovernmental establishments, have received wage increases since August 18, 1945. The amounts of increases given by individual employers concentrate between 10 and 15 percent, but range from less than 5 percent to over 30 percent. The United States Conciliation Service since VJ-day has settled over 3,000 disputes affecting over 1,300,000 workers without a strike threat and has assisted in settling about 1,300 disputes where strikes were threatened which involved about 500,000 workers. Only workers directly involved, and not those in related industries who might have been indirectly affected, are included in these estimates. Many of these adjustments have occurred in key industries and would have seemed to us major crises if they had not been settled peaceably. Within the framework of the wage-price policy there has been definite success, and it is to be expected that this success will continue in a vast majority of the cases arising in the months ahead. However, everyone who realizes the extreme need for a swift and orderly reconversion must feel a deep concern about the number of major strikes now in progress. If long continued, these strikes could put a heavy brake on our program. I have already made recommendations to the Congress as to the procedure best adapted to meeting the threat of work stoppages in Nation-wide industries without sacrificing the fundamental rights of labor to bargain collectively and ultimately to strike in support of their position. If we manage our economy properly, the future will see us on a level of production half again as high as anything we have ever accomplished in peacetime. Business can in the future pay higher wages and sell for lower prices than ever before. This is not true now for all companies, nor will it ever be true for all, but for business generally it is true. We are relying on all concerned to develop, through collective bargaining, wage structures that are fair to labor, allow for necessary business incentives, and conform with a policy designed to "hold the line" on prices. Production and more production was the byword during the war and still is during the transition from war to peace. However, when deferred demand slackens, we shall once again face the deflationary dangers which beset this and other countries during the 1930's. Prosperity can be assured only by a high level of demand supported by high current income; it cannot be sustained by deferred needs and use of accumulated savings. If we take the right steps in time we can certainly avoid the disastrous excesses of runaway booms and headlong depressions. We must not let a year or two of prosperity lull us into a false feeling of security and a repetition of the mistakes of the 1920's that culminated in the crash of 1929. During the year ahead the Government will be called upon to act in many important fields of economic policy from taxation and foreign trade to social security and housing. In every case there will be alternatives. We must choose the alternatives which will best measure up to our need for maintaining production and employment in the future. We must never lose sight of our long-term objectives: the broadening of markets--the maintenance of steadily rising demand. This demand can come from only three sources: consumers, businesses, or government. In this country the job of production and distribution is in the hands of businessmen, farmers, workers, and professional people-in the hands of our citizens. We want to keep it that way. However, it is the Government's responsibility to help business, labor, and farmers do their jobs. There is no question in my mind that the Government, acting on behalf of all the people, must assume the ultimate responsibility for the economic health of the Nation. There is no other agency that can. No other organization has the scope or the authority, nor is any other agency accountable, to all the people. This does not mean that the Government has the sole responsibility, nor that it can do the job alone, nor that it can do the job directly. All of the policies of the Federal Government must be geared to the objective of sustained full production and full employment-to raise consumer purchasing power and to encourage business investment. The programs we adopt this year and from now on will determine our ability to achieve our objectives. We must continue to pay particular attention to our fiscal, monetary, and tax policy, programs to aid business--especially small business--and transportation, labor-management relations and wage-price policy, social security and health, education, the farm program, public works, housing and resource development, and economic foreign policy. For example, the kinds of tax measures we have at different times--whether we raise our revenue in a way to encourage consumer spending and business investment or to discourage it--have a vital bearing on this question. It is affected also by regulations on consumer credit and by the money market, which is strongly influenced by the rate of interest on Government securities. It is affected by almost every step we take. In short, the way we handle the proper functions of government, the way we time the exercise of our traditional and legitimate governmental functions, has a vital bearing on the economic health of the Nation. These policies are discussed in greater detail in the accompanying Fifth Quarterly Report of the Director of War Mobilization and Reconversion. 3. LEGISLATION HERETOFORE RECOMMENDED AND STILL PENDING To attain some of these objectives and to meet the other needs of the United States in the reconversion and postwar period, I have from time to time made various recommendations to the Congress. In making these recommendations I have indicated the reasons why I deemed them essential for progress at home and abroad. A few--a very few--of these recommendations have been enacted into law by the Congress. Most of them have not. I here reiterate some of them, and discuss others later in this Message. I urge upon the Congress early consideration of them. Some are more urgent than others, but all are necessary. (1) Legislation to authorize the President to create fact-finding boards for the prevention of stoppages of work in Nationwide industries after collective bargaining and conciliation and voluntary arbitration have failed--as recommended by me on December 3, 1945. (2) Enactment of a satisfactory full employment bill such as the Senate bill now in conference between the Senate and the House--as recommended by me on September 6, 1945. (3) Legislation to supplement the unemployment insurance benefits for unemployed workers now provided by the different States--as recommended by me on May 1945. (4) Adoption of a permanent Fair Employment Practice Act--as recommended by me on September 6, 1945. (5) Legislation substantially raising the amount of minimum wages now provided by law--as recommended by me on September 6, 1945. (6) Legislation providing for a comprehensive program for scientific research--as recommended by me on September 6, 1945. (7) Legislation enacting a health and medical care program--as recommended by me on November 19, 1945. (8) Legislation adopting the program of universal training--as recommended by me on October 23, 1945. (9) Legislation providing an adequate salary scale for all Government employees in all branches of the Government--as recommended by me on September 6, 1945. (10) Legislation making provision for succession to the Presidency in the event of the death or incapacity or disqualification of the President and Vice President--as recommended by me on June 19, 1945. (11) Legislation for the unification of the armed services--as recommended by me on December 19, 1945. (12) Legislation for the domestic use and control of atomic energy--as recommended by me on October 3, 1945. (13) Retention of the United States Employment Service in the Federal Government for a period at least up to June 30, 1947--as recommended by me on September 6, 1945. (14) Legislation to increase unemployment allowances for veterans in line with increases for civilians--as recommended by me on September 6, 1945. (15) Social security coverage for veterans for their period of military service--as recommended by me on September 6, 1945. (16) Extension of crop insurance--as recommended by me on September 6, 1945. (17) Legislation permitting the sale of ships by the Maritime Commission at home and abroad--as recommended by me on September 6, 1945. I further recommend that this legislation include adequate authority for chartering vessels both here and abroad. (18) Legislation to take care of the stock piling of materials in which the United States is naturally deficient--as recommended by me on September 6, 1945. (19) Enactment of Federal airport legislation-as recommended by me on September 6, 1945. (20) Legislation repealing the Johnson Act on foreign loans--as recommended by me on September 6, 1945. (21) Legislation for the development of the Great Lakes-St. Lawrence River Basin-as recommended by me on October 3, 1945. 4. POLICIES IN SPECIFIC FIELDS (a) Extension of Price Control Act. Today inflation is our greatest immediate domestic problem. So far the fight against inflation has been waged successfully. Since May 1943, following President Roosevelt's "hold the line" order and in the face of the greatest pressures which this country has ever seen, the cost of living index has risen only three percent. Wholesale prices in this same period have been held to an increase of two and one-half percent. This record has been made possible by the vigorous efforts of the agencies responsible for this program. But their efforts would have been fruitless if they had not had the solid support of the great masses of our people. The Congress is to be congratulated for its role in providing the legislation under which this work has been carried out. On VJ-day it was clear to all thinking people that the danger of inflation was by no means over. Many of us can remember vividly our disastrous experience following World War I. Then the very restricted wartime controls were lifted too quickly, and as a result prices and rents moved more rapidly upward. In the year and a half following the armistice, rents, food, and clothing shot to higher and still higher levels. When the inevitable crash occurred less than two years after the end of the war, business bankruptcies were widespread. Profits were wiped out. Inventory losses amounted to billions of dollars. Farm income dropped by one-half. Factory pay rolls dropped 40 percent, and nearly one-fifth of all our industrial workers were walking the streets in search of jobs. This was a grim greeting, indeed, to offer our veterans who had just returned from overseas. When I addressed the Congress in September, I emphasized that we must continue to hold the price line until the production of goods caught up with the tremendous demands. Since then we have seen demonstrated the strength of the inflationary pressures which we have to face. Retail sales in the closing months of 1945 ran 12 percent above the previous peak for that season, which came in 1944. Prices throughout the entire economy have been pressing hard against the price ceilings. The prices of real estate, which cannot now be controlled under the law, are rising rapidly. Commercial rents are not included in the present price control law and, where they are not controlled by State law, have been increasing, causing difficulties to many businessmen. It will be impossible to maintain a high purchasing power or an expanding production unless we can keep prices at levels which can be met by the vast majority of our people. Full production is the greatest weapon against inflation, but until we can produce enough goods to meet the threat of inflation the Government will have to exercise its wartime control over prices. I am sure that the people of the United States are disturbed by the demands made by several business groups with regard to price and rent control. I am particularly disturbed at the effect such thinking may have on production and employment. If manufacturers continue to hold back goods and decline to submit bids when invited--as I am informed some are doing--in anticipation of higher prices which would follow the end of price controls, we shall inevitably slow down production and create needless unemployment. On the other hand, there are the vast majority of American businessmen who are not holding back goods, but who need certainty about the Government pricing policy in order to fix their own long-range pricing policies. Businessmen are entitled therefore to a clear statement of the policy of the Government on the subject. Tenants and housewives, farmers and workers--consumers in general--have an equal right. We are all anxious to eliminate unnecessary controls just as rapidly as we can do so. The steps that we have already taken in many directions toward that end are a clear indication of our policy. The present Price Control Act expires on June 30, 1946. If we expect to maintain a steady economy we shall have to maintain price and rent control for many months to -come. The inflationary pressures on prices and rents, with relatively few exceptions, are now at an all-time peak. Unless the Price Control Act is renewed there will be no limit to which our price levels would soar. Our country would face a national disaster. We cannot wait to renew the act until immediately before it expires. Inflation results from psychological as well as economic conditions. The country has a clear right to know where the Congress stands on this all-important problem. Any uncertainty now as to whether the act will be extended gives rise to price speculation, to withholding of goods from the market in anticipation of rising prices, and to delays in achieving maximum production. I do not doubt that the Congress will be beset by many groups who will urge that the legislation that I have proposed should either be eliminated or modified to the point where it is nearly useless. The Congress has a clear responsibility to meet this challenge with courage and determination. I have every confidence that it will do so. I strongly urge that the Congress now resolve all doubts and as soon as possible adopt legislation continuing rent and price control in effect for a full year from June 30, 1946. ( b ) Food subsidies. If the price line is to be held, if our people are to be protected against the inflationary dangers which confront us, we must do more than extend the Price Control Act. In September we were hopeful that the inflationary pressures would by this time have begun to diminish. We were particularly hopeful on food. Indeed, it was estimated that food prices at retail would drop from 3 to 5 percent in the first six months following the end of the war. In anticipation of this decline in food prices, it was our belief that food subsidies could be removed gradually during the winter and spring months, and eliminated almost completely by June 30 of this year. It was our feeling that the food subsidies could be dropped without an increase to the consumer in the present level of food prices or in the over-all cost of living. As matters stand today, however, food prices are pressing hard against the ceilings. The expected decline in food prices has not occurred, nor is it likely to occur for many months to come. This brings me to the reluctant conclusion that food subsidies must be continued beyond June 30, 1946. If we fail to take this necessary step, meat prices on July 1 will be from 3 to 5 cents higher than their average present levels; butter will be at least 12 cents a pound higher, in addition to the 5 cents a pound increase of last fall; milk will increase from 1 to 2 cents a quart; bread will increase about 1 cent a loaf; sugar will increase over 1 cent a pound; cheese, in addition to the increase of 4 cents now planned for the latter part of this month, will go up an additional 8 cents. In terms of percentages we may find the cost-of-living index for food increased by more than 8 percent, which in turn would result in more than a 3-percent increase in the cost of living. If prices of food were allowed to increase by these amounts, I must make it clear to the Congress that, in my opinion, it would become extremely difficult for us to control the forces of inflation. None of us likes subsidies. Our farmers, in particular, have always been opposed to them. But I believe our farmers are as deeply conscious as any group in the land of the havoc which inflation can create. Certainly in the past eighteen months there has been no group which has fought any harder in support of the Government's price control program. I am confident that, if the facts are placed before them and if they see clearly the evils between which we are forced to choose, they will understand the reasons why subsidies must be continued. The legislation continuing the use of food subsidies into the new fiscal year should be tied down specifically to certain standards. A very proper requirement, in my opinion, would be that subsidies be removed as soon as it is indicated that the cost of living will decline below the present levels. (c) Extension of War Powers Act. The Second War Powers Act has recently been extended by the Congress for six months instead of for a year. It will now expire, unless further extended, on June 30, 1946. This act is the basis for priority and inventory controls governing the use of scarce materials, as well as for other powers essential to orderly reconversion. I think that this Administration has given adequate proof of the fact that it desires to eliminate wartime controls as quickly and as expeditiously as possible. However, we know that there will continue to be shortages of certain materials caused by the war even after June 30, 1946. It is important that businessmen know now that materials in short supply are going to be controlled and distributed fairly as long as these war-born shortages continue. I, therefore, urge the Congress soon to extend the Second War Powers Act. We cannot afford to wait until just before the act expires next June. To wait would cause the controls to break down in a short time, and would hamper our production and employment program. (d) Small business and competition. A rising birth rate for small business, and a favorable environment for its growth, are not only economic necessities but also important practical demonstrations of opportunity in a democratic free society. A great many veterans and workers with new skills and experience will want to start in for themselves. The opportunity must be afforded them to do so. They are the small businessmen of the future. Actually when we talk about small business we are talking about almost all of the Nation's individual businesses. Nine out of every ten concerns fall into this category, and 45 percent of all workers are employed by them. Between 30 and 40 percent of the total value of all business transactions are handled by small business. It is obvious national policy to foster the sound development of small business. It helps to maintain high levels of employment and national income and consumption of the goods and services that the Nation can produce. It encourages the competition that keeps our free enterprise economy vigorous and expanding. Small business, because of its flexibility, assists in the rapid exploitation of scientific and technological discoveries. Investment in small business can absorb a large volume of savings that might otherwise not be tapped. The Government should encourage and is encouraging small-business initiative and originality to stimulate progress through competition. During the war, the Smaller War Plants Corporation assisted small concerns to make a maximum contribution to victory. The work of the Smaller War Plants Corporation is being carried on in peacetime by the Federal Loan Agency and the Department of Commerce. The fundamental approach to the job of encouraging small concerns must be based on: 1. Arrangements for making private and public financial resources available on reasonable terms. 2. Provision of technical advice and assistance to business as a whole on production, research, and management problems. This will help equalize competitive relationships between large and small companies, for many of the small companies cannot afford expensive technical research, accounting, and tax advice. 3. Elimination of trade practices and agreements which reduce competition and discriminate against new or small enterprises. We speak a great deal about the free enterprise economy of our country. It is competition that keeps it free. It is competition that keeps it growing and developing. The truth is that we need far more competition in the future than we have had in the immediate past. By strangling competition, monopolistic activity prevents or deters investment in new or expanded production facilities. This lessens the opportunity for employment and chokes off new outlets for idle savings. Monopoly maintains prices at artificially high levels and reduces consumption which, with lower prices, would rise and support larger production and higher employment. Monopoly, not being subject to competitive pressure, is slow to take advantage of technical advances which would lower prices or improve quality. All three of these monopolistic activities very directly lower the standard of living--through higher prices and lower quality of product--which free competition would improve. The Federal Government must protect legitimate business and consumers from predatory and monopolistic practices by the vigilant enforcement of regulatory legislation. The program will be designed to have a maximum impact upon monopolistic bottlenecks and unfair competitive practices hindering expansion in employment. During the war, enforcement of antimonopoly laws was suspended in a number of fields. The Government must now take major steps not only to maintain enforcement of antitrust laws but to encourage new and competing enterprises in every way. The deferred demand of the war years and the large accumulations of liquid assets provide ample incentive for expansion. Equalizing of business opportunity, under full and free competition, must be a prime responsibility in the reconversion period and in the years that follow. Many leading businessmen have recognized the importance of such action both to themselves and to the economy as a whole. But we must do more than break up trusts and monopolies after they have begun to strangle competition. We must take positive action to foster new, expanding enterprises. By legislation and by administration we must take specific steps to discourage the formation or the strengthening of competition-restricting business. We must have an over-all antimonopoly policy which can be applied by all agencies of the Government in exercising the functions assigned to them--a policy designed to encourage the formation and growth of new and freely competitive enterprises. Among the many departments and agencies which have parts in the program affecting business and competition, the Department of Commerce has a particularly important role. That is why I have recommended a substantial increase in appropriations for the next fiscal year for this Department. In its assistance to industry, the Department of Commerce will concentrate its efforts on these primary objectives: Promotion of a large and well-balanced foreign trade; provision of improved technical assistance and management aids, especially for small enterprises; and strengthening of basic statistics on business operations, both by industries and by regions. To make new inventions and discoveries available more promptly to all businesses, small and large, the Department proposes to expand its own research activities, promote research by universities, improve Patent Office procedures, and develop a greatly expanded system of field offices readily accessible to the businesses they serve. Many gaps exist in the private financial mechanism, especially in the provision of long-term funds for small- and medium sized enterprises. In the peacetime economy the Reconstruction Finance Corporation will take the leadership in assuring adequate financing for small enterprises which cannot secure funds from other sources. Most of the funds should and will be provided by private lenders; but the Reconstruction Finance Corporation will share any unusual risks through guarantees of private loans, with direct loans only when private capital is unwilling to participate on a reasonable basis. (e) Minimum wage. Full employment and full production may be achieved only by maintaining a level of consumer income far higher than that of the prewar period. A high level of consumer income will maintain the market for the output of our mills, farms, and factories, which we have demonstrated during the war years that we can produce. One of the basic steps which the Congress can take to establish a high level of consumer income is to amend the Fair Labor Standards Act to raise substandard wages to a decent minimum and to extend similar protection to additional workers who are not covered by the present act. Substandard wages are bad for business and for the farmer. Substandard wages provide only a substandard market for the goods and services produced by American industry and agriculture. At the present time the Fair Labor Standards Act prescribes a minimum wage of 40 cents an hour for those workers who are covered by the act. The present minimum wage represents an annual income of about $800 to those continuously employed for 50 weeks--clearly a wholly inadequate budget for an American family. I am in full accord with the proposal now pending in the Congress that the statutory minimum be raised immediately to 65 cents an hour, with further increases to 70 cents after one year and to 75 cents after two years. I also favor the proposal that the industry committee procedure be used to set rates higher than 65 cents per hour during the two-year interval before the 75-cent basic wage would otherwise become applicable. The proposed minimum wage of 65 cents an hour would assure the worker an annual income of about $1,300 a year in steady employment. This amount is clearly a modest goal. After considering cost-of-living increases in recent years, it is little more than a 10-cent increase over the present legal minimum. In fact, if any large number of workers earn less than this amount, we will find it impossible to maintain the levels of purchasing power needed to sustain the stable prosperity which we desire. Raising the minimum to 75 cents an hour will provide the wage earner with an annual income of $1,500 if he is fully employed. The proposed higher minimum wage levels are feasible without involving serious price adjustments or serious geographic dislocations. Today about 20 percent of our manufacturing wage earners--or about 2 million-earn less than 65 cents an hour. Because wages in most industries have risen during the war, this is about the same as the proportion-17 percent--who were earning less than 40 cents an hour in 1941. I also recommend that minimum wage protection be extended to several groups of workers not now covered. The need for a decent standard of living is by no means limited to those workers who happen to be covered by the act as it now stands. It is particularly vital at this period of readjustment in the national economy and readjustment in employment of labor to extend minimum wage protection as far as possible. Lifting the basic minimum wage is necessary, it is justified as a matter of simple equity to workers, and it will prove not only feasible but also directly beneficial to the Nation's employers. (f) Agricultural programs. The farmers of America generally are entering the crop year of 1946 in better financial condition than ever before. Farm mortgage debt is the lowest in 30 years. Farmers' savings are the largest in history. Our agricultural plant is in much better condition than after World War I. Farm machinery and supplies are expected to be available in larger volume, and farm labor problems will be less acute. The demand for farm products will continue strong during the next year or two because domestic purchases will be supplemented by a high level of exports and foreign relief shipments. It is currently estimated that from 7 to 10 percent of the total United States food supply may be exported in the calendar year 1946. Farm prices are expected to remain at least at their present levels in the immediate future, and for at least the next 12 months they are expected to yield a net farm income double the 1935-39 average and higher than in any year prior to 1943. We can look to the future of agriculture with greater confidence than in many a year in the past. Agriculture itself is moving confidently ahead, planning for another year of big production, taking definite and positive steps to lead the way toward an economy of abundance. Agricultural production goals for 1946 call for somewhat greater acreage than actually was planted in 1945. Agriculture is prepared to demonstrate that it can make a peacetime contribution as great as its contribution toward the winning of the war. In spite of supplying our armed forces and our allies during the war with a fifth to a fourth of our total food output, farmers were still able to provide our civilians with 8 percent more food per capita than the average for the five years preceding the war. Since the surrender of Japan, civilian food consumption has risen still further. By the end of 1945 the amount of the increase in food consumption was estimated to be as high as 15 percent over the prewar average. The record shows that the people of this country want and need more food and that they will buy more food if only they have the jobs and the purchasing power. The first essential therefore in providing fully for the welfare of agriculture is to maintain full employment and a high level of purchasing power throughout the Nation. For the period immediately ahead we shall still have the problem of supplying enough food. If we are to do our part in aiding the war-stricken and starving countries some of the food desires of our own people will not be completely satisfied, at least until these nations have had an opportunity to harvest another crop. During the next few months the need for food in the world will be more serious than at any time during the war. And, despite the large shipments we have already made, and despite what we shall send, there remain great needs abroad. Beyond the relief feeding period, there will still be substantial foreign outlets for our farm commodities. The chief dependence of the farmer, however, as always, must be upon the buying power of our own people. The first obligation of the Government to agriculture for the reconversion period is to make good on its price-support commitments. This we intend to do, with realistic consideration for the sound patterns of production that will contribute most to the long-time welfare of agriculture and the whole Nation. The period during which prices are supported will provide an opportunity for farmers individually to strengthen their position in changing over from a wartime to a peacetime basis of production. It will provide an opportunity for the Congress to review the needs of agriculture and make changes in national legislation where experience has shown changes to be needed. In this connection, the Congress will wish to consider legislation to take the place of the 1937 Sugar Act which expires at the end of this year. During this period we must do a thorough job of basic planning to the end that agriculture shall be able to contribute its full share toward a healthy national economy. Our long-range agricultural policies should have two main objectives: First, to assure the people on the farms a fair share of the national income; and, second, to encourage an agricultural production pattern that is best fitted to the Nation's needs. To accomplish this second objective we shall have to take into consideration changes that have taken place and will continue to take place in the production of farm commodities--changes that affect costs and efficiency and volume. What we seek ultimately is a high level of food production and consumption that will provide good nutrition for everyone. This cannot be accomplished by agriculture alone. We can be certain of our capacity to produce food, but we have often failed to distribute it as well as we should and to see that our people can afford to buy it. The way to get good nutrition for the whole Nation is to provide employment opportunities and purchasing power for all groups that will enable them to buy full diets at market prices. Wherever purchasing power fails to reach this level we should see that they have some means of getting adequate food at prices in line with their ability to buy. Therefore, we should have available supplementary programs that will enable all our people to have enough of the right kind of food. For example, one of the best possible contributions toward building a stronger, healthier Nation would be a permanent school-lunch program on a scale adequate to assure every school child a good lunch at noon. The Congress, of course, has recognized this need for a continuing school-lunch program and legislation to that effect has been introduced and hearings held. The plan contemplates the attainment of this objective with a minimum of Federal expenditures. I hope that the legislation will be enacted in time for a permanent program to start with the beginning of the school year next fall. We have the technical knowledge and the productive capacity to provide plenty of good food for every man, woman, and child in the United States. It is time we made that possibility a reality. (g) Resource development. The strength of our Nation and the welfare of the people rest upon the natural resources of the country. We have learned that proper conservation of our lands, including our forests and minerals, and wise management of our waters will add immensely to our national wealth. The first step in the Government's conservation program must be to find out just what are our basic resources, and how they should be used. We need to take, as soon as possible, an inventory of the lands, the minerals, and the forests of the Nation. During the war it was necessary to curtail some of our long-range plans for development of our natural resources, and to emphasize programs vital to the prosecution of the war. Work was suspended on a number of flood control and reclamation projects and on the development of our national forests and parks. This work must now be resumed, and new projects must be undertaken to provide essential services and to assist in the process of economic development. The rivers of America offer a great opportunity to our generation in the management of the national wealth. By a wise use of Federal funds, most of which will be repaid into the Treasury, the scourge of floods and drought can be curbed, water can be brought to arid lands, navigation can be extended, and cheap power can be brought alike to the farms and to the industries of our land. Through the use of the waters of the Columbia River, for example, we are creating a rich agricultural area as large as the State of Delaware. At the same time, we are producing power at Grand Coulee and at Bonneville which played a mighty part in winning the war and which will found a great peacetime industry in the Northwest. The Tennessee Valley Authority will resume its peacetime program of promoting full use of the resources of the Valley. We shall continue our plans for the development of the Missouri Valley, the Arkansas Valley, and the Central Valley of California. The Congress has shown itself alive to the practical requirements for a beneficial use of our water resources by providing that preference in the sale of power be given to farmers' cooperatives and public agencies. The public power program thus authorized must continue to be made effective by building the necessary generating and transmission facilities to furnish the maximum of firm power needed at the wholesale markets, which are often distant from the dam sites. These great developmental projects will open the frontiers of agriculture, industry, and commerce. The employment opportunities thus offered will also go far to ease the transition from war to peace. (h) Public works. During the war even urgently needed Federal, State, and local construction projects were deferred in order to release sources for war production. In resuming public works construction, it is desirable to proceed only at a moderate rate, since demand for private construction will be abnormally high for some time. Our public works program should be timed to reach its peak after demand for private construction has begun to taper off. Meanwhile, however, plans should be prepared if we are to act promptly when the present extraordinary private demand begins to run out. The Congress made money available to Federal agencies for their public works planning in the fiscal year 1946. I strongly recommend that this policy be continued and extended in the fiscal year 1947. State and local governments also have an essential role to play in a national public works program. In my message of September 6, 1945, I recommended that the Congress vote such grants to State and local governments as will insure that each level of government makes its proper contribution to a balanced public construction program. Specifically, the Federal Government should aid State and local governments in planning their own public works programs, in undertaking projects related to Federal programs of regional development, and in constructing such public works as are necessary to carry out the various policies of the Federal Government. Early in 1945 the Congress made available advances to State and local governments for planning public works projects, and recently made additional provision to continue these advances through the fiscal year 1946. I believe that further appropriations will be needed for the same purpose for the fiscal year 1947. The Congress has already made provision for highway programs. It is now considering legislation which would expand Federal grants and loans in several other fields, including construction of airports, hospital and health centers, housing, water pollution control facilities, and educational plant facilities. I hope that early action will be taken to authorize these Federal programs. With respect to public works of strictly local importance, State and local governments should proceed without Federal assistance except in planning. This rule should be subject to review when and if the prospect of highly adverse general economic developments warrants it. All loans and grants for public works should be planned and administered in such a way that they are brought into accord with the other elements of the Federal Program. Our long-run objective is to achieve a program of direct Federal and Federally assisted public works which is planned in advance and synchronized with business conditions. In this way it can make its greatest contribution to general economic stability. (i) National housing program. Last September I stated in my message to the Congress that housing was high on the list of matters calling for decisive action. Since then the housing shortage in countless communities, affecting millions of families, has magnified this call to action. Today we face both an immediate emergency and a major postwar problem. Since VJ-day the wartime housing shortage has been growing steadily worse and pressure on real estate values has increased. Returning veterans often cannot find a satisfactory place for their families to live, and many who buy have to pay exorbitant prices. Rapid demobilization inevitably means further overcrowding. A realistic and practical attack on the emergency will require aggressive action by local governments, with Federal aid, to exploit all opportunities and to give the veterans as far as possible first chance at vacancies. It will require continuation of rent control in shortage areas as well as legislation to permit control of sales prices. It will require maximum conversion of temporary war units for veterans' housing and their transportation to communities with the most pressing needs; the Congress has already appropriated funds for this purpose. The inflation in the price of housing is growing daily. As a result of the housing shortage, it is inevitable that the present dangers of inflation in home values will continue unless the Congress takes action in the immediate future. Legislation is now pending in the Congress which would provide for ceiling prices for old and new houses. The authority to fix such ceilings is essential. With such authority, our veterans and other prospective home owners would be protected against a skyrocketing of home prices. The country would be protected from the extension of the present inflation in home values which, if allowed to continue, will threaten not only the stabilization program but our opportunities for attaining a sustained high level of home construction. Such measures are necessary stopgaps-but only stopgaps. This emergency action, taken alone, is good--but not enough. The housing shortage did not start with the war or with demobilization; it began years before that and has steadily accumulated. The speed with which the Congress establishes the foundation for a permanent, long-range housing program will determine how effectively we grasp the immense opportunity to achieve our goal of decent housing and to make housing a major instrument of continuing prosperity and full employment in the years ahead. It will determine whether we move forward to a stable and healthy housing enterprise and toward providing a decent home for every American family. Production is the only fully effective answer. To get the wheels turning, I have appointed an emergency housing expediter. I have approved establishment of priorities designed to assure an ample share of scarce materials to builders of houses for which veterans will have preference. Additional price and wage adjustments will be made where necessary, and other steps will be taken to stimulate greater production of bottleneck items. I recommend consideration of every sound method for expansion in facilities for insurance of privately financed housing by the Federal Housing Administration and resumption of previously authorized low-rent public housing projects suspended during the war. In order to meet as many demands of the emergency situation as possible, a program of emergency measures is now being formulated for action. These will include steps in addition to those already taken. As quickly as this program can be formulated, announcement will be made. Last September I also outlined to the Congress the basic principles for the kind of decisive, permanent legislation necessary for a long-range housing program. These principles place paramount the fact that housing construction and financing for the overwhelming majority of our citizens should be done by private enterprise. They contemplate also that we afford governmental encouragement to privately financed house construction for families of moderate income, through extension of the successful system of insurance of housing investment; that research be undertaken to develop better and cheaper methods of building homes; that communities be assisted in appraising their housing needs; that we commence a program of Federal aid, with fair local participation, to stimulate and promote the rebuilding and redevelopment of slums and blighted areas--with maximum use of private capital. It is equally essential that we use public funds to assist families of low income who could not otherwise enjoy adequate housing, and that we quicken our rate of progress in rural housing. Legislation now under consideration by the Congress provides for a comprehensive attack jointly by private enterprise, State and local authorities, and the Federal Government. This legislation would make permanent the National Housing Agency and give it authority and funds for much needed technical and economic research. It would provide additional stimulus for privately financed housing construction. This stimulus consists of establishing a new system of yield insurance to encourage large-scale investment in rental housing and broadening the insuring powers of the Federal Housing Administration and the lending powers of the Federal savings and loan associations. Where private industry cannot build, the Government must step in to do the job. The bill would encourage expansion in housing available for the lowest income groups by continuing to provide direct subsidies for low-rent housing and rural housing. It would facilitate land assembly for urban redevelopment by loans and contributions to local public agencies where the localities do their share. Prompt enactment of permanent housing legislation along these lines will not interfere with the emergency action already under way. On the contrary, it would lift us out of a potentially perpetual state of housing emergency. It would offer the best hope and prospect to millions of veterans and other American families that the American system can offer more to them than temporary makeshifts. I have said before that the people of the United States can be the best housed people in the world. I repeat that assertion, and I welcome the cooperation of the Congress in achieving that goal. (j) Social security and health. Our Social Security System has just celebrated its tenth anniversary. During the past decade this program has supported the welfare and morale of a large part of our people by removing some of the hazards and hardships of the aged, the unemployed, and widows and dependent children. But, looking back over 10 years' experience and ahead to the future, we cannot fail to see defects and serious inadequacies in our system as it now exists. Benefits are in many cases inadequate; a great many persons are excluded from coverage; and provision has not been made for social insurance to cover the cost of medical care and the earnings lost by the sick and the disabled. In the field of old-age security, there seems to be no adequate reason for excluding such groups as the self-employed, agricultural and domestic workers, and employees of nonprofit organizations. Since many of these groups earn wages too low to permit significant savings for old age, they are in special need of the assured income that can be provided by old-age insurance. We must take urgent measures for the readjustment period ahead. The Congress for some time has been considering legislation designed to supplement at Federal expense, during the immediate reconversion period, compensation payments to the unemployed. Again I urge the Congress to enact legislation liberalizing unemployment compensation benefits and extending the coverage. Providing for the sustained consumption by the unemployed persons and their families is more than a welfare policy; it is sound economic policy. A sustained high level of consumer purchases is a basic ingredient of a prosperous economy. During the war, nearly 5 million men were rejected for military service because of physical or mental defects which in many cases might have been prevented or corrected. This is shocking evidence that large sections of the population are at substandard levels of health. The need for a program that will give everyone opportunity for medical care is obvious. Nor can there be any serious doubt of the Government's responsibility for helping in this human and social problem. The comprehensive health program which I recommended on November 19, 1945, will require substantial additions to the Social Security System and, in conjunction with other changes that need to be made, will require further consideration of the financial basis for social security. The system of prepaid medical care which I have recommended is expected eventually to require amounts equivalent to 4 percent of earnings up to $3,600 a year, which is about the average of present expenditures by individuals for medical care. The pooling of medical costs, under a plan which permits each individual to make a free choice of doctor and hospital, would assure that individuals receive adequate treatment and hospitalization when they are faced with emergencies for which they cannot budget individually. In addition, I recommended insurance benefits to replace part of the earnings lost through temporary sickness and permanent disability. Even without these proposed major additions, it would now be time to undertake a thorough reconsideration of our social security laws. The structure should be expanded and liberalized. Provision should be made for extending coverage credit to veterans for the period of their service in the armed forces. In the financial provisions we must reconcile the actuarial needs of social security, including health insurance, with the requirements of a revenue system that is designed to promote a high level of consumption and full employment. ( k) Education. Although the major responsibility for financing education rests with the States, some assistance has long been given by the Federal Government. Further assistance is desirable and essential. There are many areas and some whole States where good schools cannot be provided without imposing an undue local tax burden on the citizens. It is essential to provide adequate elementary and secondary schools everywhere, and additional educational opportunities for large numbers of people beyond the secondary level. Accordingly, I repeat the proposal of last year's Budget Message that the Federal Government provide financial aid to assist the States in assuring more nearly equal opportunities for a good education. The proposed Federal grants for current educational expenditures should be made for the purpose of improving the educational system where improvement is most needed. They should not be used to replace existing non-Federal expenditures, or even to restore merely the situation which existed before the war. In the future we expect incomes considerably higher than before the war. Higher incomes should make it possible for State and local governments and for individuals to support higher and more nearly adequate expenditures for education. But inequality among the States will still remain, and Federal help will still be needed. As a part of our total public works program, consideration should be given to the need for providing adequate buildings for schools and other educational institutions. In view of current arrears in the construction of educational facilities, I believe that legislation to authorize grants for educational facilities, to be matched by similar expenditures by State and local authorities, should receive the favorable consideration of the Congress. The Federal Government has not sought, and will not seek, to dominate education in the States. It should continue its historic role of leadership and advice and, for the purpose of equalizing educational opportunity, it should extend further financial support to the cause of education in areas where this is desirable. (l) Federal Government personnel. The rapid reconversion of the Federal Government from war to peace is reflected in the demobilization of its civilian personnel. The number of these employees in continental United States has been reduced by more than 500,000 from the total of approximately 2,900,000 employed in the final months of the war. I expect that by next June we shall have made a further reduction of equal magnitude and that there will be continuing reductions during the next fiscal year. Of the special wartime agencies now remaining, only a few are expected to continue actively into the next fiscal year. At the same time that we have curtailed the number of employees, we have shortened the workweek by one-sixth or more throughout the Government and have restored holidays. The process of readjustment has been complicated and costs have been increased by a heavy turn-over in the remaining personnel--particularly by the loss of some of our best administrators. Thousands of war veterans have been reinstated or newly employed in the civil service. Many civilians have been transferred from war agencies to their former peacetime agencies. Recruitment standards, which had to be relaxed during the war, are now being tightened. The elimination last autumn of overtime work for nearly all Federal employees meant a sharp cut in their incomes. For salaried workers, the blow was softened but by no means offset by the increased rates of pay which had become effective July 1. Further adjustments to compensate for increased living costs are required. Moreover, we have long needed a general upward revision of Federal Government salary scales at all levels in all branches--legislative, judicial, and executive. Too many in Government have had to sacrifice too much in economic advantage to serve the Nation. Adequate salaries will result in economies and improved efficiency in the conduct of Government business--gains that will far outweigh the immediate costs. I hope the Congress will expedite action on salary legislation for all Federal employees in all branches of the Government. The only exception I would make is in the case of workers whose pay rates are established by wage boards; a blanket adjustment would destroy the system by which their wages are kept alined with prevailing rates in particular localities. The wage boards should be sensitive now, as they were during the war, to changes in local prevailing wage rates and should make adjustments accordingly. I hope also that the Congress may see fit to enact legislation for the adequate protection of the health and safety of Federal employees, for their coverage under a system of unemployment compensation, and for their return at Government expense to their homes after separation from wartime service. (m) Territories, insular possessions, and the District of Columbia. The major governments of the world face few problems as important and as perplexing as those relating to dependent peoples. This Government is committed to the democratic principle that it is for the dependent peoples themselves to decide what their status shall be. To this end I asked the Congress last October to provide a means by which the people of Puerto Rico might choose their form of government and ultimate status with respect to the United States. I urge, too, that the Congress promptly accede to the wishes of the people of Hawaii that the Territory be admitted to statehood in our Union, and that similar action be taken with respect to Alaska as soon as it is certain that this is the desire of the people of that great Territory. The people of the Virgin Islands should be given an increasing measure of self-government. We have already determined that the Philippine Islands are to be independent on July 4, 1946. The ravages of war and enemy occupation, however, have placed a heavy responsibility upon the United States. I urge that the Congress complete, as promptly and as generously as may be possible, legislation which will aid economic rehabilitation for the Philippines. This will be not only a just acknowledgment of the loyalty of the people of the Philippines, but it will help to avoid the economic chaos which otherwise will be their heritage from our common war. Perhaps no event in the long centuries of colonialism gives more hope for the pattern of the future than the independence of the Philippines. The District of Columbia, because of its special relation to the Federal Government, has been treated since 1800 as a dependent area. We should move toward a greater measure of local self-government consistent with the constitutional status of the District. We should take adequate steps to assure that citizens of the United States are not denied their franchise merely because they reside at the Nation's Capital. III. THE BUDGET FOR THE FEDERAL PROGRAM FOR THE FISCAL YEAR 1947 SUMMARY OF THE BUDGET For the first time since the fiscal year 1930 the Budget for the next fiscal year will require no increase in the national debt. Expenditures of all kinds, authorized and recommended, in the next year are estimated at just above 35.8 billion dollars. Net receipts are estimated at 31.5 billion dollars. The estimated difference of 4.3 billion dollars will be met by a reduction in the very substantial balance which will be in the Treasury during the next fiscal year. A large part of the activities outside defense and war liquidation, aftermath of war, and international finance, classified as "other activities" in a following table, is still due to repercussions of the war. These "other activities" include more than 2 billion dollars for aids to agriculture and net outlays for the Commodity Credit Corporation-almost double the expenditures for the same purposes in prewar years. This increase is due mainly to expenditures for purposes of price stabilization and price support resulting from the war food production program. Other increases in this category are due to the fact that certain wartime agencies now in the process of liquidation are included in this group of activities. If all expenditures for those activities which are directly or indirectly related to the war are excluded, the residual expenditures are below those for corresponding activities in prewar years. In making this comparison account should be taken of the fact that, while prewar expenditures were affected by direct relief and work relief for the unemployed, the postwar budgets are affected by the considerable increase in pay rates and other increases in costs and prices. To elaborate, the Budget, as I have remarked above, reflects on both sides of the ledger the Government's program as recommended by the Executive. It includes estimates not only of expenditures and receipts for which legislative authority already exists, but also of expenditures and receipts for which authorization is recommended. The Budget total for the next fiscal year, the year that ends on June 30, 1947, is estimated at just above 35.8 billion dollars-about a third of the budgets for global war, although nearly four times the prewar budgets. This estimate is based on the assumption that a rapid liquidation of the war program will be associated with rapid reconversion and expansion of peacetime production. The total includes net outlays of Government corporations. The estimated expenditures in the next and current fiscal year compare as follows with those of a year of global war and a prewar year: Total Budget expenditures Fiscal year: (in millions) 1947 $35, 860 1946 67,229 1945 100, 031 1940 9,252 Although allowances for occupation, demobilization, and defense are drastically reduced in the fiscal year 1947, they will still amount to 42 percent of the total Budget. The so-called "aftermath of war" expenditures account for a further 30 percent of the total. The total of all other programs, which was drastically cut during the war, is increasing again as liquidation of the war program proceeds and renewed emphasis is placed on the peacetime objectives of the Government. On the other side of the ledger, net receipts are estimated at 31.5 billion dollars. This estimate assumes that all existing taxes will continue all through the fiscal year 1947. Included are the extraordinary receipts from the disposal of surplus property. As a result, estimated expenditures will exceed estimated receipts by 4.3 billion dollars. This amount can be provided by a reduction in the cash balance in the Treasury. Thus, after a long period of increasing public debt resulting from depression budgets and war budgets, it is anticipated that no increase in the Federal debt will be required next year. FEDERAL BUDGET EXPENDITURES AND BUDGET RECEIPTS Including net outlays of Government corporations and credit agencies (based on existing and proposed legislation) [In millions] Fiscal year Expenditures: 1946 1947 Defense, war, and war liquidation $49,000 $15,000 Aftermath of war: Veterans, interest, refunds 10,813 10,793 International finance (including proposed legislation) 2,614 2,754 Other activities 4,552 5,813 Activities based on proposed legislation (excluding international finance) 250 1,500 Total expenditures 67, 229 35, 860 Receipts (net) 38, 609 31,513 Excess of expenditures 28,620 4,347 The current fiscal year, 1946, is a year of transition. When the year opened, in July 1945, we were still fighting a major war, and Federal expenditures were running at an annual rate of about 100 billion dollars. By June 1946 that rate will be more than cut in half. The Budget total for the current fiscal year is now estimated at 67.2 billion dollars, of which more than two-thirds provides for war and war liquidation. Since net receipts are estimated at 38.6 billion dollars, there will be an excess of expenditures of 28.6 billion dollars for the current fiscal year. For all programs discussed in this Message I estimate the total of Budget appropriations and authorizations (including reappropriations and permanent appropriations) at 30,982 million dollars for the fiscal year 1947. Of this amount, present permanent appropriations are expected to provide 5,755 million dollars, principally for interest. This leaves 24,224 million dollars to be made available through new appropriations, exclusive of appropriations to liquidate contract authorizations; 900 million dollars in new contract authorizations; and 103 million dollars through the reappropriation of unliquidated balances of previous appropriations. The appropriations needed to liquidate contract authorizations are estimated at 1,113 million dollars. In the Budget for the year ahead only over-all estimates are included at this time for the major war agencies and for net outlays of Government corporations. Detailed recommendations will be transmitted in the spring for the war agencies; and the business-type budgets of Government corporations will likewise be transmitted in accordance with the recently adopted Government Corporation Control Act. Similarly, only over-all estimates are provided for new programs recommended in this Message; detailed recommendations will be transmitted after authorizing legislation has been enacted. It should be recognized that many of the estimates for new programs recommended in this Message are initial year figures. These figures will be affected by the date the legislation is enacted and by the time needed for getting a program under way. New programs, such as that for a national research agency, will require larger amounts in later years. The estimates exclude major elements of the proposed national health program since the greater part of these will be covered by expenditures from trust funds. The Budget total includes expenditures for capital outlay as well as for current operations. An estimated 1,740 million dollars will be expended in the fiscal year 1947 for direct Federal public works and for loans and grants for public works. THE ECONOMIC IMPACT Of THE LIQUIDATION OF THE WAR PROGRAM Government programs are of such importance in the development of production and employment opportunities--domestic and international--that it has become essential to formulate and consider the Federal Budget in the light of the Nation's budget as a whole. The relationship between the receipts, expenditures, and savings of consumers, business, and government is shown in the accompanying table. Considering the whole Nation, total expenditures must equal the total receipts, because what any individual or group spends becomes receipts of other individuals or groups. Such equality can be achieved on either a high level of incomes or on a low or depression level of incomes. Tremendous orders for munitions during the war shifted production and employment into high gear. Total goods produced and services rendered for private as well as for Government purposes--the Nation's budget-reached about 200 billion dollars in the calendar year 1944. Federal, State, and local government expenditures represented half of this total. Corresponding estimates for the past 3 months depict the national economy in the process of demobilization and reconversion. The wartime annual rate of Federal expenditures has been reduced by 32 billion dollars, while the Nation's budget total has dropped only half as much. The drop in total value of production and services has been less drastic because increasing private activities have absorbed in large measure the manpower and materials released from war production and war services. The largest increase in private activities has occurred in business investments, which include residential and other construction, producers' durable equipment, accumulation of inventories, and net exports. Under conditions of global war, expenditures for private construction and equipment were held to a minimum and inventories were depleted. With the beginning of reconversion these developments have been reversed. Residential construction and outlays for plant and equipment are on the increase; inventories, too, are being replenished. International transactions (excluding lend-lease and international relief which are included under war expenditures) showed an import surplus under conditions of global war. In the past 3 months private exports have been slightly in excess of imports, for the first time since 1941. Consumers' budgets show a significant change. On the income side, their total has declined but little because the reduction in "take-home" pay of war workers is, to a large extent, offset for the time being by the mustering-out payments received by war veterans and by unemployment compensation received by the unemployed. On the expenditure side, however, consumers' budgets, restricted during the war, have in creased substantially as a result of the fact that scarce goods are beginning to appear on the market and wartime restraints are disappearing. Thus, consumers' current savings are declining substantially from the extraordinarily high wartime rate and some wartime savings are beginning to be used for long-delayed purchases. THE GOVERNMENT'S BUDGET AND THE NATION'S BUDGET Calendar year 1944 and October-December 1945 [In billions] Oct.-Dec. 1945 (start of reconversion) (in seasonally Calendar Year 1944 (global war) adjusted annual rates) ______________________ ____________________ Excess Excess Expendi- (+), def- Expendi- (+),def- Economic Group Receipts tures icit(-) Receipts tures icit(-) CONSUMERS Income after taxes $134 ....... ...... $132 ...... ....... Expenditures ...... $98 ...... ...... $107 ....... Excess of receipts, savings (+) ...... ...... +$35 ...... ...... +$25 BUSINESS Undistributed profits and reserves $13 ...... ...... $9 ...... ...... Gross capital formation: Domestic ...... $4 ...... ...... $15 ...... Net exports1 ...... --2 ...... ...... 1 ...... Total, gross capital formation ...... 2 ...... ...... 16 ...... Excess of receipts (+) or capital formation (--) ...... ...... +$11 ...... ...... --$7 STATE AND LOCAL GOVERNMENT Receipts from the public, other than borrowing $10 ...... ...... $11 ...... ...... Payments to the public ...... $8 ...... ...... $9 ...... Excess of receipts (+) ...... ...... +$2 ...... ...... +$2 FEDERAL GOVERNMENT Receipts from the public, other than borrowing $48 ...... ....... $44 ...... ...... Payments to the public ...... $96 ....... ...... $64 ...... Excess of payments (--) ...... ...... --$48 ...... ....... --$20 Less: Adjustments2 $7 $7 ....... $14 $14 ....... TOTAL: GROSS NATIONAL PRODUCT Receipts $198 ....... ...... $182 ...... ...... Expenditures ...... $198 ...... ...... $182 ...... Balance ...... ...... 0 ...... ...... ...... 1Excludes exports for lend-lease and relief which are included in Federal Government expenditures. 2Mainly government expenditures for other than goods and services, such as mustering-out pay and unemployment compensation. Unemployment has increased less than was expected during this first period of demobilization and reconversion. It is true that 6 million men and women have been discharged from the armed forces since May 1945 and more than 5 million have been laid off from war work. On the other hand, more than a million civilians have been enlisted in the armed forces, a considerable number of war veterans have not immediately sought jobs, and many war workers, especially women, have withdrawn from the labor force. In addition, many industries, and especially service trades which were undermanned during the war, are beginning now, for the first time in years, to recruit an adequate labor force. The reduced workweek has also contributed to the absorption of those released from war service and war work. In general, the drastic cut in war programs has thrown the economy into lower gear; it has not thrown it out of gear. Our economic machine demonstrates remarkable resiliency, although there are many difficulties that must still be overcome. The rapid termination of war contracts, prompt clearance of unneeded Government-owned equipment from private plants, and other reconversion policies have greatly speeded up the beginning of peacetime work in reconverted plants. Although the first great shock of demobilization and war-work termination has thus been met better than many observers expected, specific industries and specific regions show much unevenness in the progress of reconversion. The Quarterly Report of the Director of War Mobilization and Reconversion analyzes the difficulties in recruiting personnel and obtaining materials that hamper reconversion in certain industries and proposes policies to deal with these situations. The lack of adequate housing is one of the main factors checking the flow of workers into areas where job opportunities exist. FEDERAL REVENUE, BORROWING, AND THE PUBLIC DEBT I. FINANCIAL REQUIREMENTS AND TAX POLICY Recommendations for tax legislation should be considered not only in the light of the financial requirements of the ensuing year, but also in the light of future years' financial requirements and a full consideration of economic conditions. Expenditures are estimated at nearly 36 billion dollars in the fiscal year 1947; they can hardly be expected to be reduced to less than 25 billion dollars in subsequent years. Net receipts in the fiscal year 1947 are estimated at 31.5 billion dollars. Included in this estimate are 2 billion dollars of receipts from disposal and rental of surplus property and 190 million dollars of receipts from renegotiation of wartime contracts. These sources of receipts will disappear in future years. Tax collections for the fiscal year 1947 also will not yet fully reflect the reduction in corporate tax liabilities provided in the Revenue Act of 1945. If the extraordinary receipts from the disposal of surplus property and renegotiation of contracts be disregarded, and if the tax reductions adopted in the Revenue Act of 1945 were fully effective, present tax rates would yield about 27 billion dollars. These estimates for the fiscal year 1947 are based on the assumption of generally favorable business conditions but not on an income reflecting full employment and the high productivity that we hope to achieve. In future years the present tax system, in conjunction with a full employment level of national income, could be expected to yield more than 30 billion dollars, which is substantially above the anticipated peacetime level of expenditures. In view of the still extraordinarily large expenditures in the coming year and continuing inflationary pressures, I am making no recommendation for tax reduction at this time. We have already had a substantial reduction in taxes from wartime peaks. The Revenue Act of 1945 was a major tax-reduction measure. It decreased the total tax load by more than one-sixth, an amount substantially in excess of the reductions proposed by the Secretary of the Treasury to congressional tax committees in October 1945. These proposed reductions were designed to encourage reconversion and peacetime business expansion. The possibility of further tax reductions must depend on the budgetary situation and the economic situation. The level of anticipated expenditures for the fiscal year 1947 and the volume of outstanding public debt require the maintenance of large revenues. Moreover, inflationary pressures still appear dangerously powerful, and ill-advised tax reduction would operate to strengthen them still further. My decision not to recommend additional tax reductions at this time is made in the light of existing economic conditions and prospects. 2. BORROWING AND THE PUBLIC DEBT The successful conclusion of the Victory loan marked the end of war borrowing and the beginning of the transition to postwar debt management. Because of the success of the Victory loan,. I am happy to report that the Treasury will not need to borrow any new money from the public during the remainder of the present fiscal year except through regular sales of savings bonds and savings notes. Furthermore, a part of the large cash balance now in the Treasury will be used for debt redemption so that the public debt which now amounts to about 278 billion dollars will decrease by several billion dollars during the next 18 months. The present statutory debt limit of 300 billion dollars will provide an ample margin for all of the public-debt transactions through the fiscal year 1947. The net effect of the excess of expenditures and debt redemption on the Treasury cash balance, as compared with selected previous years, is shown in the following table: EXCESS Of BUDGET EXPENDITURES, THE PUBLIC DEBT, AND THE TREASURY CASH BALANCE IN SELECTED YEARS [in billions] Excess of At end of period Budget ex- _____________________ penditures Public Cash bal- Fiscal Year over receipts debt ance 1940 $3. 9 $43. 0 $1. 9 1945 53. 6 258. 7 24. 7 1946: July-Dec. 1945 18. 1 278. 1 26. 0 Jan.-June 1946 10. 5 275. 0 11. 9 1947 4. 3 271. 0 3. 2 Although the public debt is expected to decline, a substantial volume of refinancing will be required, because of the large volume of maturing obligations. Redemptions of savings bonds also have been running high in recent months and are expected to remain large for some time. The issuance of savings bonds will be continued. These bonds represent a convenient method of investment for small savers, and also an anti-inflationary method of refinancing. Government agencies and trust funds are expected to buy about 2.5 billion dollars of Government securities during the next 6 months, and 2.8 billion dollars more during the fiscal year 1947. Through these and other debt operations, the distribution of the Federal debt among the various types of public and private owners will change, even though the total is expected to decline. The interest policies followed in the refinancing operations will have a major impact not only on the provision for interest payments in future budgets, but also on the level of interest rates prevailing in private financing. The average rate of interest on the debt is now a little under 2 percent. Low interest rates will be an important force in promoting the full production and full employment in the postwar period for which we are all striving. Close wartime cooperation between the Treasury Department and the Federal Reserve System has made it possible to finance the most expensive war in history at low and stable rates of interest. This cooperation will continue. No less important than the level of interest rates paid on the debt is the distribution of its ownership. Of the total debt, more than half represents direct savings of individuals or investments of funds received from individual savings by life insurance companies, mutual savings banks, savings and loan associations, private or Government trust funds, and other agencies. Most of the remaining debt--more than 100 billion dollars--is held by the commercial banks and the Federal Reserve banks. Heavy purchases by the banks were necessary to provide adequate funds to finance war expenditures. A considerable portion of these obligations are short-term in character and hence will require refinancing in the coming months and years. Since they have been purchased out of newly created bank funds, continuance of the present low rates of interest is entirely appropriate. To do otherwise would merely increase bank profits at the expense of the taxpayer. The 275-billion dollar debt poses a problem that requires careful consideration in the determination of financial and economic policies. We have learned that the problem, serious as it is, can be managed. Its management will require determined action to keep our Federal Budget in order and to relate our fiscal policies to the requirements of an expanding economy. The more successful we are in achieving full production and full employment the easier it will be to manage the debt and pay for the debt service. Large though the debt is, it is within our economic capacity. The interest charges on it amount to but a small proportion of our national income. The Government is determined, by a resolute policy of economic stabilization, to protect the interests of the millions of American citizens who have invested in its securities. During the past 6 months the net revenue receipts of the Federal Government have been about 20 billion dollars, almost as much as during the closing 6 months of 1944 when the country was still engaged in all-out warfare. The high level of these receipts reflects the smoothness of the reconversion and particularly the strength of consumer demand. But the receipts so far collected, it must be remembered, do not reflect any of the tax reductions made by the Revenue Act of 1945. These reductions will not have their full effect on the revenue collected until the fiscal year 1948. It is good to move toward a balanced budget and a start on the retirement of the debt at a time when demand for goods is strong and the business outlook is good. These conditions prevail today. Business is good and there are still powerful forces working in the direction of inflation. This is not the time for tax reduction. RECOMMENDATIONS FOR SPECIFIC FEDERAL ACTIVITIES 1. WAR LIQUIDATION AND NATIONAL DEFENSE (a) War expenditures. The fiscal year 1947 will see a continuance of war liquidation and occupation. During this period we shall also lay the foundation for our peacetime system of national defense. In the fiscal year that ended on June 30, 1945, almost wholly a period of global warfare, war expenditures amounted to 90.5 billion dollars. For the fiscal year 1946 war expenditures were originally estimated at 70 billion dollars. That estimate was made a year ago while we were still engaged in global warfare. After victory over Japan this estimate was revised to 50.5 billion dollars. Further cut-backs and accelerated demobilization have made possible an additional reduction in the rate of war spending. During the first 6 months 32.9 billion dollars were spent. It is now estimated that 16.1 billion dollars will be spent during the second 6 months, or a total of 49 billion dollars during the whole fiscal year. For the fiscal year 1947 it is estimated, tentatively, that expenditures for war liquidation, for occupation, and for national defense will be reduced to 15 billion dollars. The War and Navy Departments are expected to spend 13 billion dollars; expenditures of other agencies, such as the United States Maritime Commission, the War Shipping Administration, and the Office of Price Administration, and payments to the United Nations Relief and Rehabilitation Administration are estimated at 3 billion dollars. Allowing for estimated net receipts of 1 billion dollars arising from war activities of the Reconstruction finance Corporation, the estimated total of war expenditures is 15 billion dollars. At this time only a tentative break-down of the total estimate for war and defense activities can be indicated. An expenditure of 15 billion dollars for war liquidation, occupation, and national defense is a large sum for a year which begins 10 months after fighting has ended. It is 10 times our expenditures for defense before the war; it amounts to about 10 percent of our expected national income. This estimate reflects the immense job that is involved in winding up a global war effort and stresses the great responsibility that victory has placed upon this country. The large expenditures needed for our national defense emphasize the great scope for effective organization in furthering economy and efficiency. To this end I have recently recommended to the Congress adoption of legislation combining the War and Navy Departments into a single Department of National Defense. A large part of these expenditures is still to be attributed to the costs of the war. Assuming, somewhat arbitrarily, that about one-half of the 15-billion-dollar outlay for the fiscal year 1947 is for war liquidation, aggregate expenditures by this Government for the second World War are now estimated at 347 billion dollars through June 30, 1947. Of this, about 9 billion dollars will have been recovered through renegotiation and sale of surplus property by June 30, 1947; this has been reflected in the estimates of receipts. Demobilization and strength of armed forces.--Demobilization of our armed forces is proceeding rapidly. At the time of victory in Europe, about 12.3 million men and women were in the armed forces; 7.6 million were overseas. By the end of December 1945 our armed forces had been reduced to below 7 million. By June 30, 1946, they will number about 2.9 million, of whom 1.8 million will be individuals enlisted and inducted after VE-day. Mustering-out pay is a large item of our war liquidation expense; it will total 2.5 billion dollars in the fiscal year 1946, and about 500 million dollars in the fiscal year 1947. In the fiscal year 1947 the strength of our armed forces will still be above the ultimate peacetime level. As I have said, War and Navy Department requirements indicate a strength of about 2 million in the armed forces a year from now. This is necessary to enable us to do our share in the occupation of enemy territories and in the preservation of peace in a troubled world. Expenditures for pay, subsistence, travel, and miscellaneous expenses of the armed forces, excluding mustering-out pay, are estimated at 5 billion dollars. Contract settlement and surplus property disposal.--The winding up of war procurement is the second most important liquidation job. By the end of November a total of 301,000 prime contracts involving commitments of 64 billion dollars had been terminated. Of this total, 67,000 contracts with commitments of 35 billion dollars remained to be settled. Termination payments on these contracts are estimated at about 3.5 billion dollars. It is expected that more than half of these terminated contracts will be settled during the current fiscal year, leaving payments of about 1.5 billion dollars for the fiscal year 1947. Another important aspect of war supply liquidation is the disposal of surplus property. Munitions, ships, plants, installations, and supplies, originally costing 50 billion dollars or more, will ultimately be declared surplus. The sale value of this property will be far less than original cost and disposal expenses are estimated at 10 to 15 cents on each dollar realized. Disposal units within existing agencies have been organized to liquidate surplus property under the direction of the Surplus Property Administration. Overseas disposal activities have been centralized in the State Department to permit this program to be carried on in line with over-all foreign policy. Thus far only about 13 billion dollars of the ultimate surplus, including 5 billion dollars of unsalable aircraft, has been declared. Of this amount, 2.3 billion dollars have been disposed of, in sales yielding 600 million dollars. The tremendous job of handling surplus stocks will continue to affect Federal expenditures and receipts for several years. The speed and effectiveness of surplus disposal operations will be of great importance for the domestic economy as well as for foreign economic policies. War supplies, maintenance, and relief.-Adequate provision for the national defense requires that we keep abreast of scientific and technical advances. The tentative estimates for the fiscal year 1947 make allowance for military research, limited procurement of weapons in the developmental state, and some regular procurement of munitions which were developed but not mass-produced when the war ended. Expenditures for procurement and construction will constitute one-third or less of total defense outlays, compared to a ratio of two-thirds during the war years. The estimates also provide for the maintenance of our war-expanded naval and merchant fleets, military installations, and stocks of military equipment and supplies. Our naval combatant fleet is three times its pre-Pearl Harbor tonnage. Our Merchant Marine is five times its prewar size. The War Department has billions of dollars worth of equipment and supplies. Considerable maintenance and repair expense is necessary for the equipment which we desire to retain in active status or in war reserve. Expenses will be incurred for winnowing the stocks of surpluses, for preparing lay-up facilities for the reserve fleets, and for storage of reserve equipment and supplies. Military expenditures .in the current fiscal year include 650 million dollars for civilian supplies for the prevention of starvation and disease in occupied areas. Expenditures on this account will continue in the fiscal year 1947. The war expenditures also cover the expenses of civilian administration in occupied areas. During the war, 15 cents of each dollar of our war expenditures was for lend-lease aid. With lend-lease terminated, I expect the direct operations under this program to be substantially completed in the current fiscal year. The expenditures estimated for the fiscal year 1947 under this program are mainly interagency reimbursements for past transactions. Relief and rehabilitation expenditures are increasing. It is imperative that we give all necessary aid within our means to the people who have borne the ravages of war. I estimate that in the fiscal year 1946 expenditures for the United Nations Relief and Rehabilitation Administration will total 1.3 billion dollars and in the following year 1.2 billion dollars. Insofar as possible, procurement for this purpose will be from war surpluses. (b) Authorizations for war and national defense. During the war, authorizations and appropriations had to be enacted well in advance of obligation and spending to afford ample time for planning of production by the procurement services and by industry. Thus our cumulative war program authorized in the period between July 1, 1940, and July 1, 1945, was 431 billion dollars, including net war commitments of Government corporations. Expenditures against those authorizations totaled 290 billion dollars. This left 141 billion dollars in unobligated authorizations and unliquidated obligations. With the end of fighting, it became necessary to adjust war authorizations to the requirements of war liquidation and continuing national defense. Intensive review of the war authorizations by both the executive and the legislative branches has been continued since VJ-day. As a result, the authorized war program is being brought more nearly into line with expenditures. Recisions and authorizations through the fiscal year 1946.--Readjusting the war program, as the Congress well knows, is not an easy task. Authorizations must not be too tight, lest we hamper necessary operations; they must not be too ample, lest we lose control of spending. Last September, I transmitted to the Congress recommendations on the basis of which the Congress voted H.R. 4407 to repeal 50.3 billion dollars of appropriations and authorizations. I found it necessary to veto this bill because it was used as a vehicle for legislation that would impair the reemployment program. However, in order to preserve the fine work of the Congress on the recisions, I asked the Director of the Bureau of the Budget to place the exact amounts indicated for repeal in a nonexpendable reserve, and to advise the departments and agencies accordingly. This has been done. In accord with Public Law 132 of the Seventy-ninth Congress, I have transmitted recommendations for additional rescissions for the current fiscal year of appropriations amounting to 5.8 billion dollars and of contract authorizations totaling 420 million dollars. The net reduction in authority to obligate will be 5.0 billion dollars, because, of the appropriations, 1.2 billion dollars will have to be restored in subsequent years to liquidate contract authorizations still on the books. The appropriations recommended for repeal include 2,827 million dollars for the Navy Department, 1,421 million dollars for the War Department, 850 million dollars for lend-lease, 384 million dollars for the War Shipping Administration, and 260 million dollars for the United States Maritime Commission. The contract authorizations proposed for repeal are for the Maritime Commission. In addition, there are unused tonnage authorizations for construction of naval vessels now valued at 5.4 billion dollars. In September 1945, I suggested that this authority be reviewed by the appropriate committees of the Congress, and the Congress has moved to bar construction under these authorizations during the remainder of the fiscal year 1946. I propose to continue this prohibition in the Navy budget estimates for the fiscal year 1947 and now renew my recommendation that legislation be enacted at the earliest time to dear the statute books of these authorizations. The amounts indicated for repeal in H.R. 4407 and the further rescissions which I have recommended, excluding duplications and deferred cash payments on existing authorizations, represent a cut in the authorized war program of 60.8 billion dollars. The war authorizations will also be reduced 3'7 billion dollars by carrying receipts of revolving accounts to surplus, by lapses, and by cancelation and repayment of commitments of the Government war corporations. On the other hand, supplemental appropriations of 600 million dollars will be required for the United Nations Relief and Rehabilitation Administration. In the net, it is estimated that the cumulative authorized war and national defense program will amount to 368 billion dollars on June 30, 1946. Expenditures of 49 billion dollars during the fiscal year 1946 will have pushed cumulative expenditures to 339 billion dollars. The unexpended balances will be down to 28 billion dollars on June 30, 1946. New authorizations for national defense and war liquidation in the fiscal year 1947.-The expenditures of 15 billion dollars for national defense and war liquidation in the fiscal year 1947 will be partly for payment of contractual obligations incurred in the past, and partly for the payment of new obligations. The unexpended balances on June 30, 1946, will be scattered among hundreds of separate appropriations. Thus, while some appropriation accounts will have unused balances, others will require additional appropriations. It is estimated that authorizations to incur new obligations of 11,772 million dollars will be needed during the fiscal year 1947, mainly for the War and Navy Departments. Of the required authorizations, 11,365 million dollars will be in new appropriations, 400 million dollars in new contract authority, and 7 million dollars in reappropriations of unobligated balances. In addition, appropriations of 825 million dollars will be needed to liquidate obligations under existing contract authorizations. Taking into account the tentative authorizations and expenditures estimated for the fiscal year 1947, and offsets of 3 billion dollars in war commitments of Government corporations, the cumulative authorized war and national defense program on June 30, 1947, will be 376 billion dollars; total expenditures, 354 billion dollars; and unexpended balances, 22 billion dollars. The 22 billion dollars of unexpended balances tentatively indicated as of June 30, 1947, comprise both unobligated authorizations and unliquidated obligations. Most of the unliquidated obligations result from transactions booked during the war years. A large part of the 22 billion dollars would never be spent even if not repealed, for the appropriations will lapse in due course. For example, several billion dollars of these unliquidated obligations represent unsettled inter- and intra-departmental agency accounts for war procurement. Legislation is being requested to facilitate the adjustment of some of these inter-agency accounts. Another 6 billion dollars is set aside for contract termination payments. If contract settlement costs continue in line with recent experience, it is likely that part of the 6 billion dollars will remain unspent. On the other hand, some of the 22 billion dollars would be available for obligation and expenditure unless impounded. In certain appropriations, such as those for long-cycle procurement, considerable carry-over of unliquidated obligations into future years is to be expected and is necessary. However, substantial further rescissions can and should be made when the war liquidation program tapers off and budgetary requirements for national defense are clarified. As I have said, I shall continue to review the war authorizations and from time to time recommend excess balances for repeal. As in recent years, detailed recommendations concerning most appropriations for the national defense program are postponed until the spring. In connection with the war activities of the United States Maritime Commission and certain other agencies, however, I now make specific recommendations for the fiscal year 1947. No additional authorizations or appropriations will be necessary for the Maritime Commission since sufficient balances will be left after the abovementioned rescissions to carry out the program now contemplated for the fiscal year 1947. 2. AFTERMATH OF WAR Nearly one-third--11 billion dollars--of estimated Federal expenditures in the fiscal year 1947 will be for purposes that are largely inherited from the war--payments to veterans, interest on the Federal debt, and refunds of taxes. (a) For veterans. "Veterans' pensions and benefits" has become one of the largest single categories in the Federal Budget. I am recommending for this purpose total appropriations of 4,787 million dollars for the fiscal year 1947• Expenditures in the fiscal year are estimated, under present legislation, at 4,208 million dollars. These expenditures will help our veterans through their readjustment period and provide lasting care for those who were disabled. The Congress has provided unemployment allowances for veterans during their readjustment period. Expenditure of 850 million dollars for this purpose is anticipated for the fiscal year 1947. In addition, readjustment allowances for self-employed veterans are expected to cost 340 million dollars in the fiscal year 1947. On May 28, 1945, in asking the Congress to raise the ceiling on benefits for civilian unemployed to not less than 25 dollars a week during the immediate reconversion period, I suggested that the Congress also consider liberalizing veterans' allowances. Elsewhere in this Message I reiterate my recommendation with respect to emergency unemployment compensation. I also recommend increasing veterans' unemployment allowances from 20 dollars to 25 dollars a week. This would involve additional expenditures estimated at approximately 220 million dollars for the fiscal year. Included in the 1947 Budget is an expenditure of 535 million dollars for veterans' education under provisions of the Servicemen's Readjustment Act. This amount includes both tuition expenses and maintenance allowances. It is expected that half a million veterans will be enrolled in our schools and colleges during the year. The ultimate benefit which veterans receive from the loan guarantee provisions of the Servicemen's Readjustment Act depends largely on the success of our stabilization program in restraining building costs and real estate values. Under the revised procedure contained in recent amendments, the administrative workload will be minimized by the almost complete transfer of authority for approving the guarantees to private lending agencies and private appraisers designated by the Veterans Administration. This authority carries with it the responsibility for restricting the guarantees to loans on reasonably valued properties. Costs of the program, other than for administration, are estimated at 21 million dollars in the fiscal year 1947. Pensions for veterans will require expenditures estimated at 1,748 million dollars for the fiscal year 1947. Two-thirds of this amount will be received by veterans of the war which we have just won. This figure includes 55 million dollars of increased pensions for student-veterans in our vocational rehabilitation program. In addition, 170 million dollars will be expended in transfers to the National Service Life Insurance fund from general and special accounts. Expenditures under the appropriation for salaries and expenses of the Veterans Administration are estimated at 528 million dollars in the fiscal year 1947. This includes 260 million dollars for medical care and the operation of some 103,000 hospital and domiciliary beds. A separate appropriation for hospital and domiciliary facilities, additional to the total for veterans' pensions and benefits, covers construction that will provide some 13,000 hospital beds as part of the 500-million dollar hospital construction program already authorized by the Congress. The estimated expenditures of 130 million dollars for this purpose are classified in the Budget as part of the general public works program for the next fiscal year. ( b ) For interest. Interest payments on the public debt are estimated at 5 billion dollars in the fiscal year 1947, an increase of 250 million dollars from the revised estimate for the current fiscal year. This increase reflects chiefly payment of interest on additions to the debt this year. Assuming continuance of present interest rates, the Government's interest bill is now reaching the probable postwar level. (c) For refunds. An estimated total of 1,585 million dollars of refunds will be paid to individuals and corporations during the fiscal year 1947. Slightly over half of this amount, or 800 million dollars, will be accessory to the simplified pay-as-you-go method of tax collection, and will be the result of overwithholding and over declaration of expected income. Most of the remainder will arise from loss and excess-profits credit carrybacks, recomputed amortization on war plants, and special relief from the excess profits tax. This category of expenditures is thus losing gradually its "aftermath-of-war" character, and by the succeeding year will reflect almost entirely the normal operation of loss carry-backs and current tax collection. 3. AGRICULTURAL PROGRAMS The agricultural programs contemplated for the fiscal year 1947 are those which are essential for the provision of an adequate supply of food and other agricultural commodities with a fair return to American farmers. To support these objectives, expenditures by the Department of Agriculture estimated at 784 million dollars from general and special accounts will be required in the fiscal year 1947. This compares with estimated expenditures of 676 million dollars in 1946. These figures exclude expenditures by the Department of Agriculture on account of lend-lease, the United Nations Relief and Rehabilitation Administration, and other war expenditures. The expenditure for the fiscal year 1947 is composed of 553 million dollars for "aids to agriculture," 35 million dollars for general public works, and 196 million dollars for other services of the Department. Net outlays for the price stabilization, price support, and other programs of the Commodity Credit Corporation are expected to increase from about 750 million dollars in the fiscal year 1946 to about 1,500 million dollars in 1947. Cash advances made on loans by the farm Security Administration and the Rural Electrification Administration are expected to amount to 266 million dollars in the fiscal year 1946 and 351 million dollars in 1947; and after receipts from principal and interest are taken into account, net loan expenditures of these two agencies will amount to 120 and 209 million dollars in the two fiscal years. To provide for the expenditures from general and special accounts, I recommend for the fiscal year 1947 appropriations of million dollars (including the existing permanent appropriation of an amount equal to 30 percent of estimated annual customs receipts) and a reappropriation of 88 million dollars of prior-year balances from customs receipts. In addition there is a recommended authorization of 367.5 million dollars for borrowing from the Reconstruction finance Corporation for the loan programs of the farm Security Administration and the Rural Electrification Administration. It is expected that the operations of the Commodity Credit Corporation will be financed during the coming year through the 500 million dollars of lend-lease funds which the Congress has earmarked for price support purposes, a supplemental appropriation to restore impaired capital of the Corporation, and the borrowing authority of the Corporation. Some detailed recommendations follow for major agricultural programs. Conservation and use of land.--I am recommending that 270 million dollars be appropriated for "conservation and use of agricultural land resources"--the so-called AAA program--for the fiscal year 1947, compared with 356 million dollars in the current year. This reduction of 86 million dollars is in large part accounted for by elimination of the wartime flax production incentive project and other nonrecurring items; the proposed reduction in normal activities is less than 33 million dollars. For the past several years, this program has consisted largely of payments to farmers for application of fertilizer and other approved soil management practices. I am convinced that farmers generally are now fully alert to the benefits, both immediate and long-term, which they derive from the practices encouraged by this program. I believe, therefore, that this subsidization should continue to be reduced. Rural electrification.--It is proposed that the loan authorization for the Rural Electrification Administration for the fiscal year 1947 be increased from 200 million dollars to 250 million dollars. During the war period, REA was limited by the scarcity of materials and manpower. But that situation is rapidly changing, and the REA program, which was materially stepped up for the fiscal year 1946, can be increased still more. It is my belief that a feasible and practical rural electrification program should be carried forward as rapidly as possible. This will involve total loans of approximately 1,800 million dollars over the next 10 years, much of which will be repaid during that period. Other programs.--It is recommended that the continuing forest land-acquisition program be resumed at the rate of 3 million dollars annually, which is about the minimum rate at which this program can be economically carried on. The lands involved in this program can contribute fully to the national welfare only when brought into the national forest system for protection and development. Such programs as those of the farm Security Administration and the farm Credit Administration are estimated to be continued during the fiscal year 1947 at about the same level as in the fiscal year 1946. Recent action by the Congress has Permitted some expansion of the school lunch program. I hope it will be continued and expanded. The budgets of the Federal Crop Insurance Corporation and the federal farm Mortgage Corporation will be transmitted in the spring under the terms of the Government Corporation Control Act. 4. TRANSPORTATION Transportation is one of the major fields for both public and private investment. Our facilities for transportation and communication must be constantly improved to serve better the convenience of the public and to facilitate the sound growth and development of the whole economy. Federal capital outlays for transportation facilities are expected to approximate 519 million dollars in the fiscal year 1947. State and local governments may spend 400 million dollars. Private investment, over half of it by railways, may approach 1,150 million dollars. The Congress has already taken steps for the resumption of work on improvement of rivers and harbors and on the construction of new Federal-aid highways. Much needed work on airports can begin when the Congress enacts legislation now in conference between the two Houses. The Federal expenditure estimates for the fiscal year 1947 include 53 million dollars for new construction in rivers, harbors, and the Panama Canal and 291 million dollars for highways and grade-crossing elimination, assuming that the States expend some 275 million dollars on the Federal-aid system. Additional expenditures for highways totaling 36 million dollars are anticipated by the forest Service, National Park Service, and the Territory of Alaska. Civil airways and airports will involve expenditures of 35 million dollars under existing authority. Additional Federal expenditures exceeding 20 million dollars (to be matched by States and municipalities) may be made during the fiscal year 1947 under the airport legislation now in conference between the two Houses of the Congress. The United States now controls almost two-thirds of the world's merchant shipping, most of it Government-owned, compared with little more than one-seventh of the world's tonnage in 1939. This places a heavy responsibility upon the Nation to provide for speedy and efficient world commerce as a contribution to general economic recovery. The estimates for the United States Maritime Commission and War Shipping Administration provide for the transition of shipping operation from a war to a peace basis; the sale, chartering, or lay-up of much of the war-built fleet; and for a program of ship construction of some 84 million dollars in the fiscal year 1947 to round out the merchant fleet for peacetime use. Federal aids, subsidies, and regulatory controls for transportation should follow the general principle of benefiting the national economy as a whole. They should seek to improve the transportation system and increase its efficiency with resulting lower rates and superior service. Differential treatment which benefits one type of transportation to the detriment of another should be avoided save when it is demonstrated clearly to be in the public interest. 5. RESOURCE DEVELOPMENT Total capital outlays for resource development are estimated at 653 million dollars in the fiscal year 1947 as compared with 452 million dollars in 1946. These include capital expenditures by the Rural Electrification Administration and expenditures for resource development by other organizational units in the Department of Agriculture which are also mentioned above under "agricultural programs." The reclamation and flood control projects which I am recommending for the fiscal year 1947 will involve capital outlays of approximately 319 million dollars as compared with 245 million dollars in the fiscal year 1946. These expenditures cover programs of the Corps of Engineers, the Bureau of Reclamation, the Bureau of Indian Affairs, the Department of Agriculture, and the International Boundary and Water Commission, United States and Mexico. A number of these projects are multiple-purpose projects, providing not only for reclamation and irrigation of barren land and flood control, but also for the production of power needed for industrial development of the areas. Expenditures for power transmission and distribution facilities by the Bonneville Power Administration are expected to increase from 12 million dollars in the fiscal year 1946 to 15 million dollars in the next fiscal year. In addition, the Southwestern Power Administration will undertake a new program involving expenditures of about 16 million dollars in the fiscal year 1947. The Rural Electrification Administration will require expenditures during the current fiscal year estimated at 156 million dollars; in the fiscal year 1947, at 241 million dollars. The TVA program includes completion of major multiple-purpose projects--navigation, flood control, and power facilities--and additions to chemical plants and related facilities. Expenditures for these capital improvement programs are estimated at 30 million dollars in the fiscal year 1946 and 39 million dollars in the fiscal year 1947. Expenditures for construction of roads and other developmental works in the national forests, parks, and other public lands, and for capital outlays for fish and wildlife development will increase from below 9 million dollars in the fiscal year 1946 to 24 million dollars in the fiscal year 1947. 6. SOCIAL SECURITY AND HEALTH Benefit payments out of the Old-Age and Survivors Insurance Trust fund during 1947 are estimated at 407 million dollars, while withdrawals by the States from the Unemployment Trust fund for compensation payments are expected to total 1 billion dollars. These disbursements are financed out of social security contributions. The appropriations from general and special accounts for the social security program, which cover Federal administrative expenses and grants to States for assistance programs, are estimated at 593 million dollars for the fiscal year 1947, an increase of 57 million dollars over the current year. The increase anticipates greater administrative workload and higher grants to match increasing State payments. The social security program does not include all the Federal health services under existing legislation. For the other health services classified under general government and national defense, appropriations are estimated at 102 million dollars for the fiscal year 1947. Some expansion in peacetime medical research and other programs of the Public Health Service is provided for in the appropriation estimates for these purposes totaling approximately 87 million dollars for the fiscal year 1947 which are submitted under provisions of existing law. Part of this will be provided through the social security appropriations, the remainder through other appropriations. About 28 million dollars is recommended for maternity care and health services for children under existing law, mainly under the emergency provision for the wives and infants of servicemen. While we should avoid duplication of maternity and child health services which will be provided through the proposed general system of prepaid medical care, legislation is needed to supplement such services. For medical education, I have recommended legislation authorizing grants-in-aid to public and nonprofit institutions. The existing sources of support for medical schools require supplementation to sustain the expansion that is needed. Hospitals, sanitation works, and additional facilities at medical schools will be required for an adequate national health program. Legislation is now pending in the Congress to authorize grants for the construction of hospitals and health centers and grants and loans for water-pollution control. I hope the Congress will act favorably on generous authorizing legislation. 7. RESEARCH AND EDUCATION The Budget provides for continuation and desirable expansion of the research activities that are carried on throughout the Federal establishment and through previously authorized grants to the States. Additional appropriations will be required for the proposed central Federal research agency which I recommended last September 6. That agency will coordinate existing research activities and administer funds for new research activities wherever they are needed; it will not itself conduct research. The plan contemplates expenditures through the new research agency of approximately 40 million dollars for the first year. These amounts are small in relation to the important contribution they can make to the national income, the welfare of our people, and the common defense. Expenditures must be limited for the time being by the capacity of research agencies to make wise use of funds. The maintenance of our position as a nation, however, will require more emphasis on research expenditures in the future than in the past. Educational expenditures will require a significant share of the national income in the fiscal year 1947. State, local, and private expenditures for the current support of elementary, secondary, and higher education are expected to be substantially above 3 billion dollars in that year. These nonfederal expenditures will be supplemented by Federal expenditures estimated at 625 million dollars in the present Budget. Of this amount, the estimate for veterans' education, as previously mentioned, is 535 million dollars. Other amounts include 21 million dollars for the support of vocational education in public schools, 5 million dollars for the land-grant colleges, 50 million dollars for the present school-lunch and milk program, 1 million dollars for the Office of Education, and approximately 13 million dollars for various other items. In view of the major policy issues which are still under study by the Congress and the Administration, no specific amount has been determined for the Federal grants, previously recommended in this Message, which would assist the States generally in assuring more nearly equal opportunities for a good education. Notwithstanding the urgent need for additional school and college buildings, careful planning will be required for the expenditures to be made under the proposed legislation to aid the States in providing educational facilities. A major share of the grants for the first year would be for surveys and plans. I have already outlined the broad objectives of our foreign economic policy. In the present section I shall indicate the Federal outlays which the execution of these programs may require in the fiscal years 1946 and 1947. (a) On the termination of lend-lease, the lend-lease countries were required to pay for goods in the lend-lease pipe line either in cash or by borrowing from the United States or by supplying goods and services to the United States. Credits for this purpose have already been extended to Soviet Union, France, the Netherlands, and Belgium amounting to 675 million dollars. The settlement credit of 650 million dollars to the United Kingdom includes an amount preliminarily fixed at 118 million dollars which represents the excess of purchases by the United Kingdom from the pipe line over goods and services supplied by the United Kingdom to the United States since VJ-day and the balance of various claims by one government against the other. Credits are also being negotiated with lend-lease countries to finance the disposition of lend-lease inventories and installations and property declared to be surplus. For instance, 532 million dollars of the settlement credit to the United Kingdom is for this purpose. These credits will involve no new expenditures by this Government, since they merely provide for deferred repayment by other governments for good: services which have been financed from war appropriations. (b) Expenditures from the appropriations to United Nations Relief and Rehabilitation Administration, which were discarded under war expenditures above, are estimated to be 1.3 billion dollars in the fiscal year 1946 and 1.2 billion dollars in the fiscal year 1947. (c) To assist other countries in the restoration of their economies the Export-Import Bank has already negotiated loans in the fiscal year 1946 amounting in total to about 1,010 million dollars and an additional 195 million dollars will probably be committed shortly. The Bank is also granting loans to carry out its original purpose of directly expanding the foreign trade of the United States. In this connection the Bank has established a fund of 100 million dollars to finance the export of cotton from the United States. The Export-Import Bank has thus loaned or committed approximately 1,300 million dollars during the current fiscal year and it is expected that demands on its resources will increase in the last 6 months of the fiscal year 1946. Requests for loans are constantly being received by the Bank from countries desiring to secure goods and services in this country for the reconstruction or development of their economies. On July 31, 1945, the lending authority of the Expert-Import Bank was increased to a total of 3,500 million dollars. I anticipate that during the period covered by this Budget the Bank will reach this limit. The bulk of the expenditures from the loans already granted will fall in the fiscal year 1946 while the bulk of the expenditures from loans yet to be negotiated will fall in the fiscal year 1947. In view of the urgent need for the Bank's credit, I may find it necessary to request a further increase in its lending authority at a later date. (d) The proposed line of credit of 3,750 million dollars to the United Kingdom will be available up to the end of 1951 and will be used to assist the United Kingdom in financing the deficit in its balance of payments during the transition period. The rate at which the United Kingdom will draw on the credit will depend on the rapidity with which it can reconvert its economy and adapt its trade to the postwar world. The anticipated rate of expenditure is likely to be heaviest during the next 2 years. (e) Since the Bretton Woods Agreements have now been approved by the required number of countries, both the International Monetary fund and the International Bank for Reconstruction and Development will commence operations during 1946. The organization of these institutions will undoubtedly take some time, and it is unlikely that their operations will reach any appreciable scale before the beginning of the fiscal year 1947. Of the 2,750 million dollars required for the fund, 1,800 million dollars will be provided in cash or notes from the exchange stabilization fund established under the Gold Reserve Act of 1934. The remaining 950 million dollars will be paid initially in the form of non-interest-bearing notes issued by the Secretary of the Treasury. It is not anticipated that the fund will require in cash any of the 950 million dollars during the fiscal years 1946 and 1947. Consequently, no cash withdrawals from the Treasury will be required in connection with the fund in these years. The subscription to the Bank amounts to 3,175 million dollars. Of this total, 2 percent must be paid immediately and the Bank is required to call a further 8 percent of the subscription during its first year of operations. The balance of the subscription is payable when required by the Bank either for direct lending or to make good its guarantees. It is likely that the United States will be required to pay little if any more than the initial 10 percent before the end of the fiscal year 1947. I anticipate that net expenditures of the Export-Import Bank and expenditures arising from the British credit and the Bretton Woods Agreements will amount to 2,614 million dollars, including the noncash item of 950 million dollars for the fund, in the fiscal year 1946, and 2,754 million dollars in the fiscal year 1947. GENERAL GOVERNMENT The responsibilities of the Government, in both domestic and international affairs, have increased greatly in the past decade. Consequently, the Government is larger than it was before the war, and its general operating costs are higher. We cannot shrink the Government to prewar dimensions unless we slough off these new responsibilities--and we cannot do that without paying an excessive price in terms of our national welfare. We can, however, enhance its operating efficiency through improved organization. I expect to make such improvements under the authority of the Reorganization Act of 1945. The appropriations which I am recommending for general government for the fiscal year 1947 are 1,604 million dollars under existing legislation. This is an increase of 458 million dollars over the total of enacted appropriations for the current fiscal year, but a substantial part of this increase is due to the fact that the appropriations for the fiscal year 1946 were made prior to the general increase of employees' salaries last July 1, for which allowance is made in the anticipated supplemental appropriations for 1946. The recommended total for 1947 for general government, like the estimates for national defense and other specific programs, does not allow for the further salary increases for Government employees which, I hope, will be authorized by pending legislation, but-the tentative lump-sum estimates under proposed legislation contemplate that such salary increases will be effective almost at once. Expenditures for general government in the fiscal year 1947 are expected to continue the slowly rising trend which began in 1943. This category includes a great variety of items--not merely the overhead costs of the Government. It includes all the expenditures of the Cabinet departments, other than for national defense, aids to agriculture, general public works, and the social security program. It includes also expenditures of the legislative branch, the Judiciary, and many of the independent agencies of the executive branch. Consequently, the estimated increase in 1947 in the total of general government expenditures reflects a variety of influences. Now included in general government are certain activities formerly classified under national defense. Some of these, such as certain functions of the former foreign Economic Administration and the War Manpower Commission, are still needed during the period of reconversion; others are in the process of liquidation. A few wartime activities, for example, the international information and foreign intelligence services and some of the wartime programs for controlling disease and crime, have become part of our regular government establishment. Expenditures for these former wartime functions explain about 40 percent of the increase in expenditures for general government. Other increases are for civil aeronautics promotion, the business and manufacturing censuses, and other expanded business services of the Department of Commerce which have been referred to above; the forest and Soil Conservation Services and other committees of the Department of certain conservation activities of the Department of the Interior; and the collection of internal revenue in the Treasury Department. The necessity for reestablishing postal services curtailed during the war and advances in the rates of pay for postal employees have increased substantially the estimated expenditures for postal service for both the current and the next fiscal year. It is not expected that this increase will cause expenditures to exceed postal revenues in either year, although an excess of expenditures may occur in the fiscal year 1947 if salaries are increased further. Expenditures for our share of the administrative budgets of the United Nations and other permanent international bodies will increase sharply in the fiscal year 1947, yet will remain a small part of our total Budget. The budget for the United Nations has not yet been determined; an estimate for our contribution will be submitted later. Our contributions to the food and Agriculture Organization, the International Labor Office, the Pan American Union, and other similar international agencies will aggregate about 3 million dollars for the fiscal year 1947. The administrative expenses of the International Monetary fund and the International Bank will be met from their general funds. We have won a great war--we, the nations of plain people who hate war. In the test of that war we found a strength of unity that brought us through--a strength that crushed the power of those who sought by force to deny our faith in the dignity of man. During this trial the voices of disunity among us were silent or were subdued to an occasional whine that warned us that they were still among us. Those voices are beginning to cry aloud again. We must learn constantly to turn deaf ears to them. They are voices which foster fear and suspicion and intolerance and hate. They seek to destroy our harmony, our understanding of each other, our American tradition of "live and let live." They have become busy again, trying to set race against race, creed against creed, farmer against city dweller, worker against employer, people against their own governments. They seek only to do us mischief. They must not prevail. It should be impossible for any man to contemplate without a sense of personal humility the tremendous events of the 12 months since the last annual Message, the great tasks that confront us, the new and huge problems of the coming months and years. Yet these very things justify the deepest confidence in the future of this Nation of free men and women. The plain people of this country found the courage and the strength, the self-discipline, and the mutual respect to fight and to win, with the help of our allies, under God. I doubt if the tasks of the future are more difficult. But if they are, then I say that our strength and our knowledge and our understanding will be equal to those tasks. HARRY S. TRUMAN Source: https://www.presidency.ucsb.edu/documents/message-the-congress-the-state-the-union-and-the-budget-for-1947

Resolved, That the Senator from Wisconsin, Mr. McCarthy, failed to cooperate with the Subcommittee on Privileges and Elections of the Senate Committee on Rules and Administration in clearing up matters referred to that subcommittee which concerned his conduct as a Senator and affected the honor of the Senate and, instead, repeatedly abused the subcommittee and its members who were trying to carry out assigned duties, thereby obstructing the constitutional processes of the Senate, and that this conduct of the Senator from Wisconsin, Mr. McCarthy, is contrary to senatorial traditions and is hereby condemned. Sec 2. The Senator from Wisconsin, Mr. McCarthy, in writing to the chairman of the Select Committee to Study Censure Charges (Mr. Watkins) after the Select Committee had issued its report and before the report was presented to the Senate charging three members of the Select Committee with "deliberate deception" and "fraud" for failure to disqualify themselves; in stating to the press on November 4, 1954, that the special Senate session that was to begin November 8, 1954, was a "lynch-party"; in repeatedly describing this special Senate session as a "lynch bee" in a nationwide television and radio show on November 7, 1954; in stating to the public press on November 13, 1954, that the chairman of the Select Committee (Mr. Watkins) was guilty of "the most unusual, most cowardly things I've ever heard of" and stating further: "I expected he would be afraid to answer the questions, but didn't think he'd be stupid enough to make a public statement"; and in characterizing the said committee as the "unwitting handmaiden," "involuntary agent" and "attorneys-in-fact" of the Communist Party and in charging that the said committee in writing its report "imitated Communist methods -- that it distorted, misrepresented, and omitted in its effort to manufacture a plausible rationalization" in support of its recommendations to the Senate, which characterizations and charges were contained in a statement released to the press and inserted in the Congressional Record of November 10, 1954, acted contrary to senatorial ethics and tended to bring the Senate into dishonor and disrepute, to obstruct the constitutional processes of the Senate, and to impair its dignity; and such conduct is hereby condemned. Source: https://www.archives.gov/milestone-documents/censure-of-senator-joseph-mccarthy

Ladies and gentlemen: I have come to a decision which I felt I should tell you and all of my fellow American citizens, as soon as I was certain in my own mind and in my own conscience that it is the right thing to do. I have learned already in this office that the difficult decisions always come to this desk. I must admit that many of them do not look at all the same as the hypothetical questions that I have answered freely and perhaps too fast on previous occasions. My customary policy is to try and get all the facts and to consider the opinions of my countrymen and to take counsel with my most valued friends. But these seldom agree, and in the end, the decision is mine. To procrastinate, to agonize, and to wait for a more favorable turn of events that may never come or more compelling external pressures that may as well be wrong as right, is itself a decision of sorts and a weak and potentially dangerous course for a President to follow. I have promised to uphold the Constitution, to do what is right as God gives me to see the right, and to do the very best that I can for America. I have asked your help and your prayers, not only when I became President but many times since. The Constitution is the supreme law of our land and it governs our actions as citizens. Only the laws of God, which govern our consciences, are superior to it. As we are a nation under God, so I am sworn to uphold our laws with the help of God. And I have sought such guidance and searched my own conscience with special diligence to determine the right thing for me to do with respect to my predecessor in this place, Richard Nixon, and his loyal wife and family. Theirs is an American tragedy in which we all have played a part. It could go on and on and on, or someone must write the end to it. I have concluded that only I can do that, and if I can, I must. There are no historic or legal precedents to which I can turn in this matter, none that precisely fit the circumstances of a private citizen who has resigned the Presidency of the United States. But it is common knowledge that serious allegations and accusations hang like a sword over our former President's head, threatening his health as he tries to reshape his life, a great part of which was spent in the service of this country and by the mandate of its people. After years of bitter controversy and divisive national debate, I have been advised, and I am compelled to conclude that many months and perhaps more years will have to pass before Richard Nixon could obtain a fair trial by jury in any jurisdiction of the United States under governing decisions of the Supreme Court. I deeply believe in equal justice for all Americans, whatever their station or former station. The law, whether human or divine, is no respecter of persons; but the law is a respecter of reality. The facts, as I see them, are that a former President of the United States, instead of enjoying equal treatment with any other citizen accused of violating the law, would be cruelly and excessively penalized either in preserving the presumption of his innocence or in obtaining a speedy determination of his guilt in order to repay a legal debt to society. During this long period of delay and potential litigation, ugly passions would again be aroused. And our people would again be polarized in their opinions. And the credibility of our free institutions of government would again be challenged at home and abroad. In the end, the courts might well hold that Richard Nixon had been denied due process, and the verdict of history would even more be inconclusive with respect to those charges arising out of the period of his Presidency, of which I am presently aware. But it is not the ultimate fate of Richard Nixon that most concerns me, though surely it deeply troubles every decent and every compassionate person. My concern is the immediate future of this great country. In this, I dare not depend upon my personal sympathy as a long-time friend of the former President, nor my professional judgment as a lawyer, and I do not. As President, my primary concern must always be the greatest good of all the people of the United States whose servant I am. As a man, my first consideration is to be true to my own convictions and my own conscience. My conscience tells me clearly and certainly that I cannot prolong the bad dreams that continue to reopen a chapter that is closed. My conscience tells me that only I, as President, have the constitutional power to firmly shut and seal this book. My conscience tells me it is my duty, not merely to proclaim domestic tranquility but to use every means that I have to insure it. I do believe that the buck stops here, that I cannot rely upon public opinion polls to tell me what is right. I do believe that right makes might and that if I am wrong, 10 angels swearing I was right would make no difference. I do believe, with all my heart and mind and spirit, that I, not as President but as a humble servant of God, will receive justice without mercy if I fail to show mercy. Finally, I feel that Richard Nixon and his loved ones have suffered enough and will continue to suffer, no matter what I do, no matter what we, as a great and good nation, can do together to make his goal of peace come true. [At this point, the President began reading from the proclamation granting the pardon.] "Now, therefore, I, Gerald R. Ford, President of the United States, pursuant to the pardon power conferred upon me by Article II, Section 2, of the Constitution, have granted and by these presents do grant a full, free, and absolute pardon unto Richard Nixon for all offenses against the United States which he, Richard Nixon, has committed or may have committed or taken part in during the period from July (January) 20, 1969 through August 9, 1974." [The President signed the proclamation and then resumed reading.] "In witness whereof, I have hereunto set my hand this eighth day of September, in the year of our Lord nineteen hundred and seventy-four, and of the Independence of the United States of America the one hundred and ninety-ninth." Source: https://www.fordlibrarymuseum.gov/the-fords/gerald-r-ford/key-speeches-and-writings-gerald-r-ford

Ford’s Second Annual Message January 19, 1976 Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and distinguished guests: As we begin our Bicentennial, America is still one of the youngest nations in recorded history. Long before our forefathers came to these shores, men and women had been struggling on this planet to forge a better life for themselves and their families. In man's long, upward march from savagery and slavery--throughout the nearly 2,000 years of the Christian calendar, the nearly 6,000 years of Jewish reckoning--there have been many deep, terrifying valleys, but also many bright and towering peaks. One peak stands highest in the ranges of human history. One example shines forth of a people uniting to produce abundance and to share the good life fairly and with freedom. One union holds out the promise of justice and opportunity for every citizen: That union is the United States of America. We have not remade paradise on Earth. We know perfection will not be found here. But think for a minute how far we have come in 200 years. We came from many roots, and we have many branches. Yet all Americans across the eight generations that separate us from the stirring deeds of 1776, those who know no other homeland and those who just found refuge among our shores, say in unison: I am proud of America, and I am proud to be an American. Life will be a little better here for my children than for me. I believe this not because I am told to believe it, but because life has been better for me than it was for my father and my mother. I know it will be better for my children because my hands, my brains, my voice, and my vote can help make it happen. It has happened here in America. It has happened to you and to me. Government exists to create and preserve conditions in which people can translate their ideas into practical reality. In the best of times, much is lost in translation. But we try. Sometimes we have tried and failed. Always we have had the best of intentions. But in the recent past, we sometimes forgot the sound principles that guided us through most of our history. We wanted to accomplish great things and solve age-old problems. And we became overconfident of our abilities. We tried to be a policeman abroad and the indulgent parent here at home. We thought we could transform the country through massive national programs, but often the programs did not work. Too often they only made things worse. In our rush to accomplish great deeds quickly, we trampled on sound principles of restraint and endangered the rights of individuals. We unbalanced our economic system by the huge and unprecedented growth of Federal expenditures and borrowing. And we were not totally honest with ourselves about how much these programs would cost and how we would pay for them. Finally, we shifted our emphasis from defense to domestic problems while our adversaries continued a massive buildup of arms. The time has now come for a fundamentally different approach for a new realism that is true to the great principles upon which this Nation was founded. We must introduce a new balance to our economy--a balance that favors not only sound, active government but also a much more vigorous, healthy economy that can create new jobs and hold down prices. We must introduce a new balance in the relationship between the individual and the government--a balance that favors greater individual freedom and self-reliance. We must strike a new balance in our system of federalism--a balance that favors greater responsibility and freedom for the leaders of our State and local governments. We must introduce a new balance between the spending on domestic programs and spending on defense--a balance that ensures we will fully meet our obligation to the needy while also protecting our security in a world that is still hostile to freedom. And in all that we do, we must be more honest with the American people, promising them no more than we can deliver and delivering all that we promise. The genius of America has been its incredible ability to improve the lives of its citizens through a unique combination of governmental and free citizen activity. History and experience tells us that moral progress cannot come in comfortable and in complacent times, but out of trial and out of confusion. Tom Paine aroused the troubled Americans of 1776 to stand up to the times that try men's souls because the harder the conflict, the more glorious the triumph. Just a year ago I reported that the state of the Union was not good. Tonight, I report that the state of our Union is better--in many ways a lot better--but still not good enough. To paraphrase Tom Paine, 1975 was not a year for summer soldiers and sum shine patriots. It was a year of fears and alarms and of dire forecasts--most of which never happened and won't happen. As you recall, the year 1975 opened with rancor and with bitterness. Political misdeeds of the past had neither been forgotten nor forgiven. The longest, most divisive war in our history was winding toward an unhappy conclusion. Many feared that the end of that foreign war of men and machines meant the beginning of a domestic war of recrimination and reprisal. Friends and adversaries abroad were asking whether America had lost its nerve. Finally, our economy was ravaged by inflation--inflation that was plunging us into the worse recession in four decades. At the same time, Americans became increasingly alienated from big institutions. They were steadily losing confidence, not just in big government but in big business, big labor, and big education, among others. Ours was a troubled land. And so, 1975 was a year of hard decisions, difficult compromises, and a new realism that taught us something important about America. It brought back a needed measure of common sense, steadfastness, and self-discipline. Americans did not panic or demand instant but useless cures. In all sectors, people met their difficult problems with the restraint and with responsibility worthy of their great heritage. Add up the separate pieces of progress in 1975, subtract the setbacks, and the sum total shows that we are not only headed in a new direction, a direction which I proposed 12 months ago, but it turned out to be the right direction. It is the right direction because it follows the truly revolutionary American concept of 1776, which holds that in a free society the making of public policy and successful problemsolving involves much more than government. It involves a full partnership among all branches and all levels of government, private institutions, and individual citizens. Common sense tells me to stick to that steady course. Take the state of our economy. Last January, most things were rapidly getting worse. This January, most things are slowly but surely getting better. The worst recession since World War II turned around in April. The best cost-of-living news of the past year is that double-digit inflation of 12 percent or higher was cut almost in half. The worst--unemployment remains far too high. Today, nearly 1,700,000 more Americans are working than at the bottom of the recession. At year's end, people were again being hired much faster than they Were being laid off. Yet, let's be honest. Many Americans have not yet felt these changes in their daily lives. They still see prices going up far too fast, and they still know the fear of unemployment. We are also a growing nation. We need more and more jobs every year. Today's economy has produced over 85 million jobs for Americans, but we need a lot more jobs, especially for the young. My first objective is to have sound economic growth without inflation. We all know from recent experience what runaway inflation does to ruin every other worthy purpose. We are slowing it. We must stop it cold. For many Americans, the way to a healthy, noninflationary economy has become increasingly apparent. The Government must stop spending so much and stop borrowing so much of our money. More money must remain in private hands where it will do the most good. To hold down the cost of living, we must hold down the cost of government. In the past decade, the Federal budget has been growing at an average rate of over 10 percent a year. The budget I am submitting Wednesday cuts this rate of growth in half. I have kept my promise to submit a budget for the next fiscal year of $395 billion. In fact, it is $394.2 billion. By holding down the growth of Federal spending, we can afford additional tax cuts and return to the people who pay taxes more decisionmaking power over their own lives. Last month I signed legislation to extend the 1975 tax reductions for the first 6 months of this year. I now propose that effective July 1, 1976, we give our taxpayers a tax cut of approximately $10 billion more than Congress agreed to in December. My broader tax reduction would mean that for a family of four making $15,000 a year, there will be $227 more in take-home pay annually. Hardworking Americans caught in the middle can really use that kind of extra cash. My recommendations for a firm restraint on the growth of Federal spending and for greater tax reduction are simple and straightforward. For every dollar saved in cutting the growth in the Federal budget, we can have an added dollar of Federal tax reduction. We can achieve a balanced budget by 1979 if we have the courage and the wisdom to continue to reduce the growth of Federal spending. One test of a healthy economy is a job for every American who wants to work. Government--our kind of government--cannot create that many jobs. But the Federal Government can create conditions and incentives for private business and industry to make more and more jobs. Five out of six jobs in this country are in private business and in industry. Common sense tells us this is the place to look for more jobs and to find them faster. I mean real, rewarding, permanent jobs. To achieve this we must offer the American people greater incentives to invest in the future. My tax proposals are a major step in that direction. To supplement these proposals, I ask that Congress enact changes in Federal tax laws that will speed up plant expansion and the purchase of new equipment. My recommendations will concentrate this job-creation tax incentive in areas where the unemployment rate now runs over 7 percent. Legislation to get this started must be approved at the earliest possible date. Within the strict budget total that I will recommend for the coming year, I will ask for additional housing assistance for 500,000 families. These programs will expand housing opportunities, spur construction, and help to house moderate- and low-income families. We had a disappointing year in the housing industry in 1975. But with lower interest rates and available mortgage money, we can have a healthy recovery in 1976. A necessary condition of a healthy economy is freedom from the petty tyranny of massive government regulation. We are wasting literally millions of working hours costing billions of taxpayers' and consumers' dollars because of bureaucratic redtape. The American farmer, who now feeds 215 million Americans, but also millions worldwide, has shown how touch more he can produce without the shackles of government control. Now, we badly need reforms in other key areas in our economy: the airlines, trucking, railroads, and financial institutions. I have submitted concrete plans in each of these areas, not to help this or that industry, but to foster competition and to bring prices down for the consumer. This administration, in addition, will strictly enforce the Federal antitrust laws for the very same purposes. Taking a longer look at America's future, there can be neither sustained growth nor more jobs unless we continue to have an assured supply of energy to run our economy. Domestic production of oil and gas is still declining. Our dependence on foreign oil at high prices is still too great, draining jobs and dollars away from our own economy at the rate of $125 per year for every American. Last month, I signed a compromise national energy bill which enacts a part of my comprehensive energy independence program. This legislation was late, not the complete answer to energy independence, but still a start in the right direction. I again urge the Congress to move ahead immediately on the remainder of my energy proposals to make America invulnerable to the foreign oil cartel. My proposals, as all of you know, would reduce domestic natural gas shortages; allow production from Federal petroleum reserves; stimulate effective conservation, including revitalization of our railroads and the expansion of our urban transportation systems; develop more and cleaner energy from our vast coal resources; expedite clean and safe nuclear power production; create a new national energy independence authority to stimulate vital energy investment; and accelerate development of technology to capture energy from the Sun and the Earth for this and future generations. Also, I ask, for the sake of future generations, that we preserve the family farm and family-owned small business. Both strengthen America and give stability to our economy. I will propose estate tax changes so that family businesses and family farms can be handed down from generation to generation without having to be sold to pay taxes. I propose tax changes to encourage people to invest in America's future, and their own, through a plan that gives moderate-income families income tax benefits if they make long-term investments in common stock in American companies. The Federal Government must and will respond to clear-cut national needs-for this and future generations. Hospital and medical services in America are among the best in the world, but the cost of a serious and extended illness can quickly wipe out a family's lifetime savings. Increasing health costs are of deep concern to all and a powerful force pushing up the cost of living. The burden of catastrophic illness can be borne by very few in our society. We must eliminate this fear from every family. I propose catastrophic health insurance for everybody covered by Medicare. To finance this added protection, fees for short-term care will go up somewhat, but nobody after reaching age 65 will have to pay more than $500 a year for covered hospital or nursing home care, nor more than $250 for 1 year's doctor bills. We cannot realistically afford federally dictated national health insurance providing full coverage for all 215 million Americans. The experience of other countries raises questions about the quality as well as the cost of such plans. But I do envision the day when we may use the private health insurance system to offer more middle-income families high quality health services at prices they can afford and shield them also from their catastrophic illnesses. Using resources now available, I propose improving the Medicare and other Federal health programs to help those who really need protection--older people and the poor. To help States and local governments give better health care to the poor, I propose that we combine 16 existing Federal programs, including Medicaid, into a single $10 billion Federal grant. Funds would be divided among States under a new formula which provides a larger share of Federal money to those States that have a larger share of low-income families. I will take further steps to improve the quality of medical and hospital care for those who have served in our Armed Forces. Now let me speak about social security. Our Federal social security system for people who have worked and contributed to it for all their lives is a vital part of our economic system. Its value is no longer debatable. In my budget for fiscal year 1977, I am recommending that the full cost-of-living increases in the social security benefits be paid during the coming year. But I am concerned about the integrity of our Social Security Trust Fund that enables people--those retired and those still working who will retire--to count on this source of retirement income. Younger workers watch their deductions rise and wonder if they will be adequately protected in the future. We must meet this challenge head on. Simple arithmetic warns all of us that the Social Security Trust Fund is headed for trouble. Unless we act soon to make sure the fund takes in as much as it pays out, there will be no security for old or for young. I must, therefore, recommend a three-tenths of 1 percent increase in both employer and employee social security taxes effective January 1, 1977. This will cost each covered employee less than 1 extra dollar a week and will ensure the integrity of the trust fund. As we rebuild our economy, we have a continuing responsibility to provide a temporary cushion to the unemployed. At my request, the Congress enacted two extensions and two expansions in unemployment insurance which helped those who were jobless during 1975. These programs will continue in 1976. In my fiscal year 1977 budget, I am also requesting funds to continue proven job training and employment opportunity programs for millions of other Americans. Compassion and a sense of community--two of America's greatest strengths throughout our history-- tell us we must take care of our neighbors who cannot take care of themselves. The host of Federal programs in this field reflect our generosity as a people. But everyone realizes that when it comes to welfare, government at all levels is not doing the job well. Too many of our welfare programs are inequitable and invite abuse. Too many of our welfare programs have problems from beginning to end. Worse, we are wasting badly needed resources without reaching many of the truly needy. Complex welfare programs cannot be reformed overnight. Surely we cannot simply dump welfare into the laps of the 50 States, their local taxpayers, or their private charities, and just walk away from it. Nor is it the right time for massive and sweeping changes while we are still recovering from the recession. Nevertheless, there are still plenty of improvements that we can make. I will ask Congress for Presidential authority to tighten up the rules for eligibility and benefits. Last year I twice sought long overdue reform of the scandal-riddled food stamp program. This year I say again: Let's give food stamps to those most in need. Let's not give any to those who don't need them. Protecting the life and property of the citizen at home is the responsibility of all public officials, but is primarily the job of local and State law enforcement authorities. Americans have always found the very thought of a Federal police force repugnant, and so do I. But there are proper ways in which we can help to insure domestic tranquility as the Constitution charges us. My recommendations on how to control violent crime were submitted to the Congress last June with strong emphasis on protecting the innocent victims of crime. To keep a convicted criminal from committing more crimes, we must put him in prison so he cannot harm more law-abiding citizens. To be effective, this punishment must be swift and it must be certain. Too often, criminals are not sent to prison after conviction but are allowed to return to the streets. Some judges are reluctant to send convicted criminals to prison because of inadequate facilities. To alleviate this problem at the Federal level, my new budget proposes the construction of four new Federal facilities. To speed Federal justice, I propose an increase this year in the United States attorneys prosecuting Federal crimes and the reinforcement of the number of United States marshals. Additional Federal judges are needed, as recommended by me and the Judicial Conference. Another major threat to every American's person and property is the criminal carrying a handgun. The way to cut down on the criminal use of guns is not to take guns away from the law-abiding citizen, but to impose mandatory sentences for crimes in which a gun is used, make it harder to obtain cheap guns for criminal purposes, and concentrate gun control enforcement in high crime areas. My budget recommends 500 additional Federal agents in the 11 largest metropolitan high-crime areas to help local authorities stop criminals from selling and using handguns. The sale of hard drugs is tragically on the increase again. I have directed all agencies of the Federal Government to step up law enforcement efforts against those who deal in drugs. In 1975, I am glad to report, Federal agents seized substantially more heroin coming into our country than in 1974. As President, I have talked personally with the leaders of Mexico, Colombia, and Turkey to urge greater efforts by their Governments to control effectively the production and shipment of hard drugs. I recommended months ago that the Congress enact mandatory fixed sentences for persons convicted of Federal crimes involving the sale of hard drugs. Hard drugs, we all know, degrade the spirit as they destroy the body of their users. It is unrealistic and misleading to hold out the hope that the Federal Government can move into every neighborhood and clean up crime. Under the Constitution, the greatest responsibility for curbing crime lies with State and local authorities. They are the frontline fighters in the war against crime. There are definite ways in which the Federal Government can help them. I will propose in the new budget that Congress authorize almost $7 billion over the next 5 years to assist State and local governments to protect the safety and property of all their citizens. As President, I pledge the strict enforcement of Federal laws and--by example, support, and leadership--to help State and local authorities enforce their laws. Together, we must protect the victims of crime and ensure domestic tranquility. Last year I strongly recommended a 5-year extension of the existing revenue sharing legislation, which thus far has provided $23½ billion to help State and local units of government solve problems at home. This program has been effective with decisionmaking transferred from the Federal Government to locally elected officials. Congress must act this year, or State and local units of government will have to drop programs or raise local taxes. Including my health care program reforms, I propose to consolidate some 59 separate Federal programs and provide flexible Federal dollar grants to help States, cities, and local agencies in such important areas as education, child nutrition, and social services. This flexible system will do the job better and do it closer to home. The protection of the lives and property of Americans from foreign enemies is one of my primary responsibilities as President. In a world of instant communications and intercontinental ballistic missiles, in a world economy that is global and interdependent, our relations with other nations become more, not less, important to the lives of Americans. America has had a unique role in the world since the day of our independence 200 years ago. And ever since the end of World War II, we have borne--successfully--a heavy responsibility for ensuring a stable world order and hope for human progress. Today, the state of our foreign policy is sound and strong. We are at peace, and I will do all in my power to keep it that way. Our military forces are capable and ready. Our military power is without equal, and I intend to keep it that way. Our principal alliances with the industrial democracies of the Atlantic community and Japan have never been more solid. A further agreement to limit the strategic arms race may be achieved. We have an improving relationship with China, the world's most populous nation. The key elements for peace among the nations of the Middle East now exist. Our traditional friendships in Latin America, Africa, and Asia continue. We have taken the role of leadership in launching a serious and hopeful dialog between the industrial world and the developing world. We have helped to achieve significant reform of the international monetary system. We should be proud of what America, what our country, has accomplished in these areas, and I believe the American people are. The American people have heard too much about how terrible our mistakes, how evil our deeds, and how misguided our purposes. The American people know better. The truth is we are the world's greatest democracy. We remain the symbol of man's aspiration for liberty and well-being. We are the embodiment of hope for progress. I say it is time we quit downgrading ourselves as a nation. Of course, it is our responsibility to learn the right lesson from past mistakes. It is our duty to see that they never happen again. But our greater duty is to look to the future. The world's troubles will not go away. The American people want strong and effective international and defense policies. In our constitutional system, these policies should reflect consultation and accommodation between the President and the Congress. But in the final analysis, as the framers of our Constitution knew from hard experience, the foreign relations of the United States can be conducted effectively only if there is strong central direction that allows flexibility of action. That responsibility clearly rests with the President. I pledge to the American people policies which seek a secure, just, and peaceful world. I pledge to the Congress to work with you to that end. We must not face a future in which we can no longer help our friends, such as Angola, even in limited and carefully controlled ways. We must not lose all capacity to respond short of military intervention. Some hasty actions of the Congress during the past year--most recently in respect to Angola--were, in my view, very shortsighted. Unfortunately, they are still very much on the minds of our allies and our adversaries. A strong defense posture gives weight to our values and our views in international negotiations. It assures the vigor of our alliances. And it sustains our efforts to promote settlements of international conflicts. Only from a position of strength can we negotiate a balanced agreement to limit the growth of nuclear arms. Only a balanced agreement will serve our interests and minimize the threat of nuclear confrontation. The defense budget I will submit to the Congress for fiscal year 1977 will show an essential increase over the current year. It provides for real growth in purchasing power over this year's defense budget, which includes the cost of the all-volunteer force. We are continuing to make economies to enhance the efficiency of our military forces. But the budget I will submit represents the necessity of American strength for the real world in which we live. As conflict and rivalry persist in the world, our United States intelligence capabilities must be the best in the world. The crippling of our foreign intelligence services increases the danger of American involvement in direct armed conflict. Our adversaries are encouraged to attempt new adventures while our own ability to monitor events and to influence events short of military action is undermined. Without effective intelligence capability, the United States stands blindfolded and hobbled. In the near future, I will take actions to reform and strengthen our intelligence community. I ask for your positive cooperation. It is time to go beyond sensationalism and ensure an effective, responsible, and responsive intelligence capability. Tonight I have spoken about our problems at home and abroad. I have recommended policies that will meet the challenge of our third century. I have no doubt that our Union will endure, better, stronger, and with more individual freedom. We can see forward only dimly--1 year, 5 years, a generation perhaps. Like our forefathers, we know that if we meet the challenges of our own time with a common sense of purpose and conviction, if we remain true to our Constitution and to our ideals, then we can know that the future will be better than the past. I see America today crossing a threshold, not just because it is our Bicentennial but because we have been tested in adversity. We have taken a new look at what we want to be and what we want our Nation to become. I see America resurgent, certain once again that life will be better for our children than it is for us, seeking strength that cannot be counted in megatons and riches that cannot be eroded by inflation. I see these United States of America moving forward as before toward a more perfect Union where the government serves and the people rule. We will not make this happen simply by making speeches, good or bad, yours or mine, but by hard work and hard decisions made with courage and with common sense. I have heard many inspiring Presidential speeches, but the words I remember best were spoken by Dwight D. Eisenhower. "America is not good because' it is great," the President said. "America is great because it is good." President Eisenhower was raised in a poor but religious home in the heart of America. His simple words echoed President Lincoln's eloquent testament that "right makes might." And Lincoln in turn evoked the silent image of George Washington kneeling in prayer at Valley Forge. So, all these magic memories which link eight generations of Americans are summed up in the inscription just above me. How many times have we seen it? "In God We Trust." Let us engrave it now in each of our hearts as we begin our Bicentennial. Source: https://www.presidency.ucsb.edu/documents/address-before-joint-session-the-congress-reporting-the-state-the-union

August 12, 1974 Mr. Speaker, Mr. President, distinguished guests, and my very dear friends: My fellow Americans, we have a lot of work to do. My former colleagues, you and I have a lot of work to do. Let's get on with it. Needless to say, I am deeply grateful for the wonderfully warm welcome. I can never express my gratitude adequately. I am not here to make an inaugural address. The Nation needs action, not words. Nor will this be a formal report of the state of the Union. God willing, I will have at least three more chances to do that. It is good to be back in the People's House. But this cannot be a real homecoming. Under the Constitution, I now belong to the executive branch. The Supreme Court has even ruled that I am the executive branch--head, heart, and hand. With due respect to the learned Justices--and I greatly respect the judiciary-part of my heart will always be here on Capitol Hill. I know well the coequal role of the Congress in our constitutional process. I love the House of Representatives. I revere the traditions of the Senate despite my too-short internship in that great body. As President, within the limits of basic principles, my motto toward the Congress is communication, conciliation, compromise, and cooperation. This Congress, unless it has changed, I am confident, will be my working partner as well as my most constructive critic. I am not asking for conformity. I am dedicated to the two-party system, and you know which party I belong to. I do not want a honeymoon with you. I want a good marriage. I want progress, and I want problem solving which requires my best efforts and also your best efforts. I have no need to learn how Congress speaks for the people. As President, I intend to listen. But I also intend to listen to the people themselves--all the people--as I promised last Friday. I want to be sure that we are all tuned in to the real voice of America. My Administration starts off by seeking unity in diversity. My office door has always been open, and that is how it is going to be at the White House. Yes, Congressmen will be welcomed--if you don't overdo it. [Laughter] The first seven words of the Constitution and the most important are these: "We the People of the United States .... "We the people ordained and established the Constitution and reserved to themselves all powers not granted to Federal and State government. I respect and will always be conscious of that fundamental rule of freedom. Only 8 months ago, when I last stood here, I told you I was a Ford, not a Lincoln. Tonight I say I am still a Ford, but I am not a Model T. I do have some old-fashioned ideas, however. I believe in the very basic decency and fairness of America. I believe in the integrity and patriotism of the Congress. And while I am aware of the House rule that no one ever speaks to the galleries, I believe in the first amendment and the absolute necessity of a free press. But I also believe that over two centuries since the First Continental Congress was convened, the direction of our Nation's movement has been forward. I am here to confess that in my first campaign for President--of my senior class in South High School in Grand Rapids, Michigan--I headed the Progressive Party ticket, and lost. Maybe that is why I became a Republican. [Laughter] Now I ask you to join with me in getting this country revved up and moving. My instinctive judgment is that the state of the Union is excellent. But the state of our economy is not so good. Everywhere I have been as Vice President, some 118,000 miles in 40 States and some 55 press conferences, the unanimous concern of Americans is inflation. For once all the polls seem to agree. They also suggest that the people blame Government far more than either management or labor for the high cost of everything they have to buy. You who come from 50 States, three territories, and the District of Columbia, know this better than I do. That is why you have created, since I left, your new Budget Reform Committee. I welcome it, and I will work with its members to bring the Federal budget into balance in fiscal year 1976. The fact is that for the past 25 years that I had the honor of serving in this body, the Federal budget has been balanced in only six. Mr. Speaker, I am a little late getting around to it, but confession is good for the soul. I have sometimes voted to spend more taxpayer's money for worthy Federal projects in Grand Rapids, Michigan, while I vigorously opposed wasteful spending boondoggles in Oklahoma. [Laughter] Be that as it may, Mr. Speaker, you and I have always stood together against unwarranted cuts in national defense. This is no time to change that nonpartisan policy. Just as escalating Federal spending has been a prime cause of higher prices over many years, it may take some time to stop inflation. But we must begin right now. For a start, before your Labor Day recess, Congress should reactivate the Cost of Living Council through passage of a clean bill, without reimposing controls, that will let us monitor wages and prices to expose abuses. Whether we like it or not, the American wage earner and the American housewife are a lot better economists than most economists care to admit. They know that a government big enough to give you everything you want is a government big enough to take from you everything you have. If we want to restore confidence in ourselves as working politicians, the first thing we all have to do is to learn to say no. The first specific request by the Ford Administration is not to Congress but to the voters in the upcoming November elections. It is this, very simple: Support your candidates, Congressmen and Senators, Democrats or Republicans, conservatives or liberals, who consistently vote for tough decisions to cut the cost of government, restrain Federal spending, and bring inflation under control. I applaud the initiatives Congress has already taken. The only fault I find with the Joint Economic Committee's study on inflation, authorized last week, is that we need its expert findings in 6 weeks instead of 6 months. A month ago, the distinguished majority leader of the United States Senate asked the White House to convene an economic conference of Members of Congress, the President's economic consultants, and some of the best economic brains from labor, industry, and agriculture. Later, this was perfected by resolution [S. Res. 363] to assemble a domestic summit meeting to devise a bipartisan action for stability and growth in the American economy. Neither I nor my staff have much time right now for letter writing. So, I will respond. I accept the suggestion, and I will personally preside. Furthermore, I propose. that this summit meeting be held at an early date, in full view of the American public. They are as anxious as we are to get the right answers. My first priority is to work with you to bring inflation under control. Inflation is domestic enemy number one. To restore economic confidence, the Government in Washington must provide some leadership. It does no good to blame the public for spending too much when the Government is spending too much. I began to put my Administration's own economic house in order starting last Friday. I instructed my Cabinet officers and Counsellors and my White House Staff to make fiscal restraint their first order of business, and to save every taxpayer's dollar the safety and genuine welfare of our great Nation will permit. Some economic activities will be affected more by monetary and fiscal restraint than other activities. Good government clearly requires that we tend to the economic problems facing our country in a spirit of equity to all of our citizens in all segments of our society. Tonight, obviously, is no time to threaten you with vetoes. But I do have the last recourse, and I am a veteran of many a veto fight right here in this great chamber. Can't we do a better job by reasonable compromise? I hope we can. Minutes after I took the Presidential oath, the joint leadership of Congress told me at the White House they would go more than halfway to meet me. This was confirmed in your unanimous concurrent resolution of cooperation, for which I am deeply grateful. If, for my part, I go more than halfway to meet the Congress, maybe we can find a much larger area of national agreement. I bring no legislative shopping list here this evening. I will deal with specifics in future messages and talks with you, but here are a few examples of how seriously I feel about what we must do together. Last week, the Congress passed the elementary and secondary education bill, and I found it on my desk. Any reservations I might have about some of its provisions--and I do have--fade in comparison to the urgent needs of America for quality education. I will sign it in a few days. I must be frank. In implementing its provisions, I will oppose excessive funding during this inflationary crisis. As Vice President, I studied various proposals for better health care financing. I saw them coming closer together and urged my friends in the Congress and in the Administration to sit down and sweat out a sound compromise. The comprehensive health insurance plan goes a long ways toward providing early relief to people who are sick. Why don't we write--and I ask this with the greatest spirit of cooperation-why don't we write a good health bill on the statute books in 1974, before this Congress adjourns? The economy of our country is critically dependent on how we interact with the economies of other countries. It is little comfort that our inflation is only a part of a worldwide problem or that American families need less of their paychecks for groceries than most of our foreign friends. As one of the building blocks of peace, we have taken the lead in working toward a more open and a more equitable world economic system. A new round of international trade negotiations started last September among 105 nations in Tokyo. The others are waiting for the United States Congress to grant the necessary authority to the executive branch to proceed. With modifications, the trade reform bill passed by the House last year would do a good job. I understand good progress has been made in the Senate Committee on Finance. But I am optimistic, as always, that the Senate will pass an acceptable bill quickly as a key part of our joint prosperity campaign. I am determined to expedite other international economic plans. We will be working together with other nations to find better ways to prevent shortages of food and fuel. We must not let last winter's energy crisis happen again. I will push Project Independence for our own good and the good of others. In that, too, I will need your help. Successful foreign policy is an extension of the hopes of the whole American people for a world of peace and orderly reform and orderly freedom. So, I would say a few words to our distinguished guests from the governments of other nations where, as at home, it is my determination to deal openly with allies and adversaries. Over the past 5½ years in Congress and as Vice President, I have fully supported the outstanding foreign policy of President Nixon. This policy I intend to continue. Throughout my public service, starting with wartime naval duty under the command of President Franklin D. Roosevelt, I have upheld all our Presidents when they spoke for my country to the world. I believe the Constitution commands this. I know that in this crucial area of international policy I can count on your firm support. Now, let there be no doubt or any misunderstanding anywhere, and I emphasize anywhere: There are no opportunities to exploit, should anyone so desire. There will be no change of course, no relaxation of vigilance, no abandonment of the helm of our ship of state as the watch changes. We stand by our commitments and we will live up to our responsibilities in our formal alliances, in our friendships, and in our improving relations with potential adversaries. On this, Americans are united and strong. Under my term of leadership, I hope we will become more united. I am certain America will remain strong. A strong defense is the surest way to peace. Strength makes detente attainable. Weakness invites war, as my generation--my generation--knows from four very bitter experiences. Just as America's will for peace is second to none, so will America's strength be second to none. We cannot rely on the forbearance of others to protect this Nation. The power and diversity of the Armed Forces, active Guard and Reserve, the resolve of our fellow citizens, the flexibility in our command to navigate international waters that remain troubled are all essential to our security. I shall continue to insist on civilian control of our superb military establishment. The Constitution plainly requires the President to be Commander in Chief, and I will be. Our job will not be easy. In promising continuity, I cannot promise simplicity. The problems and challenges of the world remain complex and difficult. Butwe have set out on a path of reason, of fairness, and we will continue on it. As guideposts on that path, I offer the following: --To our allies of a generation in the Atlantic community and Japan, I pledge continuity in the loyal collaboration on our many mutual endeavors. --To our friends and allies in this hemisphere, I pledge continuity in the deepening dialog to define renewed relationships of equality and justice. --To our allies and friends in Asia, I pledge a continuity in our support for their security, independence, and economic development. In Indochina, we are determined to see the observance of the Paris agreement on Vietnam and the cease-fire and negotiated settlement in Laos. We hope to see an early compromise settlement in Cambodia. --To the Soviet Union, I pledge continuity in our commitment to the course of the past 3 years. To our two peoples, and to all mankind, we owe a continued effort to live and, where possible, to work together in peace, for in a thermonuclear age there can be no alternative to a positive and peaceful relationship between our nations. --To the People's Republic of China, whose legendary hospitality I enjoyed, I pledge continuity in our commitment to the principles of the Shanghai communique. The new relationship built on those principles has demonstrated that it serves serious and objective mutual interests and has become an enduring feature of the world scene. --To the nations in the Middle East, I pledge continuity in our vigorous efforts to advance the progress which has brought hopes of peace to that region after 25 years as a hotbed of war. We shall carry out our promise to promote continuing negotiations among all parties for a complete, just, and lasting settlement. --To all nations, I pledge continuity in seeking a common global goal: a stable international structure of trade and finance which reflects the interdependence of all peoples. --To the entire international community--to the United Nations, to the world's nonaligned nations, and to all others--I pledge continuity in our dedication to the humane goals which throughout our history have been so much of America's contribution to mankind. So long as the peoples of the world have confidence in our purposes and faith in our word, the age-old vision of peace on Earth will grow brighter. I pledge myself unreservedly to that goal. I say to you in words that cannot be improved upon: "Let us never negotiate out of fear, but let us never fear to negotiate." As Vice President, at the request of the President, I addressed myself to the individual rights of Americans in the area of privacy. There will be no illegal tappings (tapings), eavesdropping, buggings, or break-ins by my Administration. There will be hot pursuit of tough laws to prevent illegal invasion of privacy in both government and private activities. On the higher plane of public morality, there is no need for me to preach tonight. We have thousands of far better preachers and millions of sacred scriptures to guide us on the path of personal right-living and exemplary official conduct. If we can make effective and earlier use of moral and ethical wisdom of the centuries in today's complex society, we will prevent more crime and more corruption than all the policemen and prosecutors governments can ever deter. If I might say so, this is a job that must begin at home, not in Washington. I once told you that I am not a saint, and I hope never to see the day that I cannot admit having made a mistake. So I will close with another confession. Frequently, along the tortuous road of recent months from this chamber to the President's House, I protested that I was my own man. Now I realize that I was wrong. I am your man, for it was your carefully weighed confirmation that changed my occupation. The truth is I am the people's man, for you acted in their name, and I accepted and began my new and solemn trust with a promise to serve all the people and do the best that I can for America. When I say all the people, I mean exactly that. To the limits of my strength and ability, I will be the President of black, brown, red, and white Americans, of old and young, of women's liberationists and male chauvinists--[laughter]--and all the rest of us in-between, of the poor and the rich, of native sons and new refugees, of those who work at lathes or at desks or in mines or in the fields, of Christians, Jews, Moslems, Buddhists, and atheists, if there really are any atheists after what we have all been through. Fellow Americans, one final word: I want to be a good President. I need your help. We all need God's sure guidance. With it, nothing can stop the United States of America. Thank you very much. Source: https://www.presidency.ucsb.edu/documents/address-joint-session-the-congress

Ford’s First Annual Message January 15, 1975 Mr. Speaker, Mr. Vice President, Members of the 94th Congress, and distinguished guests: Twenty-six years ago, a freshman Congressman, a young fellow with lots of idealism who was out to change the world, stood before Sam Rayburn in the well of the House and solemnly swore to the same oath that all of you took yesterday--an unforgettable experience, and I congratulate you all. Two days later, that same freshman stood at the back of this great Chamber-over there someplace--as President Truman, all charged up by his single-handed election victory, reported as the Constitution requires on the state of the Union. When the bipartisan applause stopped, President Truman said, "I am happy to report to this 81st Congress that the state of the Union is good. Our Nation is better able than ever before to meet the needs of the American people, and to give them their fair chance in the pursuit of happiness. [It] is foremost among the nations of the world in the search for peace." Today, that freshman Member from Michigan stands where Mr. Truman stood, and I must say to you that the state of the Union is not good: Millions of Americans are out of work. Recession and inflation are eroding the money of millions more. Prices are too high, and sales are too slow. This year's Federal deficit will be about $30 billion; next year's probably $45 billion. The national debt will rise to over $500 billion. Our plant capacity and productivity are not increasing fast enough. We depend on others for essential energy. Some people question their Government's ability to make hard decisions and stick with them; they expect Washington politics as usual. Yet, what President Truman said on January 5, 1949, is even more true in 1975. We are better able to meet our people's needs. All Americans do have a fairer chance to pursue happiness. Not only are we still the foremost nation in the pursuit of peace but today's prospects of attaining it are infinitely brighter. There were 59 million Americans employed at the start of 1949; now there are more than 85 million Americans who have jobs. In comparable dollars, the average income of the American family has doubled during the past 26 years. Now, I want to speak very bluntly. I've got bad news, and I don't expect much, if any, applause. The American people want action, and it will take both the Congress and the President to give them what they want. Progress and solutions can be achieved, and they will be achieved. My message today is not intended to address all of the complex needs of America. I will send separate messages making specific recommendations for domestic legislation, such as the extension of general revenue sharing and the Voting Rights Act. The moment has come to move in a new direction. We can do this by fashioning a new partnership between the Congress on the one hand, the White House on the other, and the people we both represent. Let us mobilize the most powerful and most creative industrial nation that ever existed on this Earth to put all our people to work. The emphasis on our economic efforts must now shift from inflation to jobs. To bolster business and industry and to create new jobs, I propose a 1-year tax reduction of $16 billion. Three-quarters would go to individuals and one-quarter to promote business investment. This cash rebate to individuals amounts to 12 percent of 1974 tax payments-a total cut of $12 billion, with a maximum of $1,000 per return. I call on the Congress to act by April 1. If you do--and I hope you will--the Treasury can send the first check for half of the rebate in May and the second by September. The other one-fourth of the cut, about $4 billion, will go to business, including farms, to promote expansion and to create more jobs. The 1-year reduction for businesses would be in the form of a liberalized investment tax credit increasing the rate to 12 percent for all businesses. This tax cut does not include the more fundamental reforms needed in our tax system. But it points us in the right direction--allowing taxpayers rather than the Government to spend their pay. Cutting taxes now is essential if we are to turn the economy around. A tax cut offers the best hope of creating more jobs. Unfortunately, it will increase the size of the budget deficit. Therefore, it is more important than ever that we take steps to control the growth of Federal expenditures. Part of our trouble is that we have been self-indulgent. For decades, we have been voting ever-increasing levels of Government benefits, and now the bill has come due. We have been adding so many new programs that the size and the growth of the Federal budget has taken on a life of its own. One characteristic of these programs is that their cost increases automatically every year because the number of people eligible for most of the benefits increases every year. When these programs are enacted, there is no dollar amount set. No one knows what they will cost. All we know is that whatever they cost last year, they will cost more next year. It is a question of simple arithmetic. Unless we check the excessive growth of Federal expenditures or impose on ourselves matching increases in taxes, we will continue to run huge inflationary deficits in the Federal budget. If we project the current built-in momentum of Federal spending through the next 15 years, State, Federal, and local government expenditures could easily comprise half of our gross national product. This compares with less than a third in 1975. I have just concluded the process of preparing the budget submissions for fiscal year 1976. In that budget, I will propose legislation to restrain the growth of a number of existing programs. I have also concluded that no new spending programs can be initiated this year, except for energy. Further, I will not hesitate to veto any new spending programs adopted by the Congress. As an additional step toward putting the Federal Government's house in order, I recommend a 5-percent limit on Federal pay increases in 1975. In all Government programs tied to the Consumer Price Index--including social security, civil service and military retirement pay, and food stamps--I also propose a 1-year maximum increase of 5 percent. None of these recommended ceiling limitations, over which Congress has final authority, are easy to propose, because in most cases they involve anticipated payments to many, many deserving people. Nonetheless, it must be done. I must emphasize that I am not asking to eliminate, to reduce, to freeze these payments. I am merely recommending that we slow down the rate at which these payments increase and these programs grow. Only a reduction in the growth of spending can keep Federal borrowing down and reduce the damage to the private sector from high interest rates. Only a reduction in spending can make it possible for the Federal Reserve System to avoid an inflationary growth in the money supply and thus restore balance to our economy. A major reduction in the growth of Federal spending can help dispel the uncertainty that so many feel about our economy and put us on the way to curing our economic ills. If we don't act to slow down the rate of increase in Federal spending, the United States Treasury will be legally obligated to spend more than $360 billion in fiscal year 1976, even if no new programs are enacted. These are not matters of conjecture or prediction, but again, a matter of simple arithmetic. The size of these numbers and their implications for our everyday life and the health of our economic system are shocking. I submitted to the last Congress a list of budget deferrals and rescissions. There will be more cuts recommended in the budget that I will submit. Even so, the level of outlays for fiscal year 1976 is still much, much too high. Not only is it too high for this year but the decisions we make now will inevitably have a major and growing impact on expenditure levels in future years. I think this is a very fundamental issue that we, the Congress and I, must jointly solve. Economic disruptions we and others are experiencing stem in part from the fact that the world price of petroleum has quadrupled in the last year. But in all honesty, we cannot put all of the blame on the oil-exporting nations. We, the United States, are not blameless. Our growing dependence upon foreign sources has been adding to our vulnerability for years and years, and we did nothing to prepare ourselves for such an event as the embargo of 1973. During the 1960's, this country had a surplus capacity of crude oil which we were able to make available to our trading partners whenever there was a disruption of supply. This surplus capacity enabled us to influence both supplies and prices of crude oil throughout the world. Our excess capacity neutralized any effort at establishing an effective cartel, and thus the rest of the world was assured of adequate supplies of oil at reasonable prices. By 1970, our surplus capacity had vanished, and as a consequence, the latent power of the oil cartel could emerge in full force. Europe and Japan, both heavily dependent on imported oil, now struggle to keep their economies in balance. Even the United States, our country, which is far more self-sufficient than most other industrial countries, has been .put under serious pressure. I am proposing a program which will begin to restore our country's surplus capacity in total energy. In this way, we will be able to assure ourselves reliable and adequate energy and help foster a new world energy stability for other major consuming nations. But this Nation and, in fact, the world must face the prospect of energy difficulties between now and 1985. This program will impose burdens on all of us with the aim of reducing our consumption of energy and increasing our production. Great attention has been paid to the considerations of fairness, and I can assure you that the burdens will not fall more harshly on those less able to bear them. I am recommending a plan to make us invulnerable to cutoffs of foreign oil. It will require sacrifices, but it--and this is most important--it will work. I have set the following national energy goals to assure that our future is as secure and as productive as our past: First, we must reduce oil imports by 1 million barrels per day by the end of this year and by 2 million barrels per day by the end of 1977. Second, we must end vulnerability to economic disruption by foreign suppliers by 1985. Third, we must develop our energy technology and resources so that the United States has the ability to supply a significant share of the energy needs of the free world by the end of this century. To attain these objectives, we need immediate action to cut imports. Unfortunately, in the short term there are only a limited number of actions which can increase domestic supply. I will press for all of them. I urge quick action on the necessary legislation to allow commercial production at the Elk Hills, California, Naval Petroleum Reserve. In order that we make greater use of domestic coal resources, I am submitting amendments to the Energy Supply and Environmental Coordination Act which will greatly increase the number of powerplants that can be promptly converted to coal. Obviously, voluntary conservation continues to be essential, but tougher programs are needed--and needed now. Therefore, I am using Presidential powers to raise the fee on all imported crude oil and petroleum products. The crude oil fee level will be increased $1 per barrel on February 1, by $2 per barrel on March 1, and by $3 per barrel on April 1. I will take actions to reduce undue hardships on any geographical region. The foregoing are interim administrative actions. They will be rescinded when the broader but necessary legislation is enacted. To that end, I am requesting the Congress to act within 90 days on a more comprehensive energy tax program. It includes: excise taxes and import fees totaling $2 per barrel on product imports and on all crude oil; deregulation of new natural gas and enactment of a natural gas excise tax. I plan to take Presidential initiative to decontrol the price of domestic crude oil on April 1. I urge the Congress to enact a windfall profits tax by that date to ensure that oil producers do not profit unduly. The sooner Congress acts, the more effective the oil conservation program will be and the quicker the Federal revenues can be returned to our people. I am prepared to use Presidential authority to limit imports, as necessary, to guarantee success. I want you to know that before deciding on my energy conservation program, I considered rationing and higher gasoline taxes as alternatives. In my judgment, neither would achieve the desired results and both would produce unacceptable inequities. A massive program must be initiated to increase energy supply, to cut demand, and provide new standby emergency programs to achieve the independence we want by 1985. The largest part of increased oil production must come from new frontier areas on the Outer Continental Shelf and from the Naval Petroleum Reserve No. 4 in Alaska. It is the intent of this Administration to move ahead with exploration, leasing, and production on those frontier areas of the Outer Continental Shelf where the environmental risks are acceptable. Use of our most abundant domestic resource--coal--is severely limited. We must strike a reasonable compromise on environmental concerns with coal. I am submitting Clean Air [Act] amendments which will allow greater coal use without sacrificing clean air goals. I vetoed the strip mining legislation passed by the last Congress. With appropriate changes, I will sign a revised version when it comes to the White House. I am proposing a number of actions to energize our nuclear power program. I will submit legislation to expedite nuclear leasing [licensing] and the rapid selection of sites. In recent months, utilities have cancelled or postponed over 60 percent of planned nuclear expansion and 30 percent of planned additions to non-nuclear capacity. Financing problems for that industry are worsening. I am therefore recommending that the 1-year investment tax credit of 12 percent be extended an additional 2 years to specifically speed the construction of powerplants that do not use natural gas or oil. I am also submitting proposals for selective reform of State utility commission regulations. To provide the critical stability for our domestic energy production in the face of world price uncertainty, I will request legislation to authorize and require tariffs, import quotas, or price floors to protect our energy prices at levels which will achieve energy independence. Increasing energy supplies is not enough. We must take additional steps to cut long-term consumption. I therefore propose to the Congress: legislation to make thermal efficiency standards mandatory for all new buildings in the United States; a new tax credit of up to $150 for those homeowners who install insulation equipment; the establishment of an energy conservation program to help low-income families purchase insulation supplies; legislation to modify and defer automotive pollution standards for 5 years, which will enable us to improve automobile gas mileage by 40 percent by 1980. These proposals and actions, cumulatively, can reduce our dependence on foreign energy supplies from 3 to 5 million barrels per day by 1985. To make the United States invulnerable to foreign disruption, I propose standby emergency legislation and a strategic storage program of 1 billion barrels of oil for domestic needs and 300 million barrels for national defense purposes. I will ask for the funds needed for energy research and development activities. I have established a goal of 1 million barrels of synthetic fuels and shale oil production per day by 1985 together with an incentive program to achieve it. I have a very deep belief in America's capabilities. Within the next 10 years, my program envisions: 200 major nuclear powerplants; 250 major new coal mines; 150 major coal-fired powerplants; 30 major new [oil] refineries; 20 major new synthetic fuel plants; the drilling of many thousands of new oil wells; the insulation of 18 million homes; and the manufacturing and the sale of millions of new automobiles, trucks, and buses that use much less fuel. I happen to believe that we can do it. In another crisis--the one in 1942 President Franklin D. Roosevelt said this country would build 60,000 [50,000] military aircraft. By 1943, production in that program had reached 125,000 aircraft annually. They did it then. We can do it now. If the Congress and the American people will work with me to attain these targets, they will be achieved and will be surpassed. From adversity, let us seize opportunity. Revenues of some $30 billion from higher energy taxes designed to encourage conservation must be refunded to the American people in a manner which corrects distortions in our tax system wrought by inflation. People have been pushed into higher tax brackets by inflation, with consequent reduction in their actual spending power. Business taxes are similarly distorted because inflation exaggerates reported profits, resulting in excessive taxes. Accordingly, I propose that future individual income taxes be reduced by $16.5 billion. This will be done by raising the low-income allowance and reducing tax rates. This continuing tax cut will primarily benefit lower- and middle-income taxpayers. For example, a typical family of four with a gross income of $5,600 now pays $185 in Federal income taxes. Under this tax cut plan, they would pay nothing. A family of four with a gross income of $12,500 now pays $1,260 in Federal taxes. My proposal reduces that total by $300. Families grossing $20,000 would receive a reduction of $210. Those with the very lowest incomes, who can least afford higher costs, must also be compensated. I propose a payment of $80 to every person 18 years of age and older in that very limited category. State and local governments will receive $2 billion in additional revenue sharing to offset their increased energy costs. To offset inflationary distortions and to generate more economic activity, the corporate tax rate will be reduced from 48 percent to 42 percent. Now let me turn, if I might, to the international dimension of the present crisis. At no time in our peacetime history has the state of the Nation depended more heavily on the state of the world. And seldom, if ever, has the state of the world depended more heavily on the state of our Nation. The economic distress is global. We will not solve it at home unless we help to remedy the profound economic dislocation abroad. World trade and monetary structure provides markets, energy, food, and vital raw materials--for all nations. This international system is now in jeopardy. This Nation can be proud of significant achievements in recent years in solving problems and crises. The Berlin agreement, the SALT agreements, our new relationship with China, the unprecedented efforts in the Middle East are immensely encouraging. But the world is not free from crisis. In a world of 150 nations, where nuclear technology is proliferating and regional conflicts continue, international security cannot be taken for granted. So, let there be no mistake about it: International cooperation is a vital factor of our lives today. This is not a moment for the American people to turn inward. More than ever before, our own well-being depends on America's determination and America's leadership in the whole wide world. We are a great Nation--spiritually, politically, militarily, diplomatically, and economically. America's commitment to international security has sustained the safety of allies and friends in many areas--in the Middle East, in Europe, and in Asia. Our turning away would unleash new instabilities, new dangers around the globe, which, in turn, would threaten our own security. At the end of World War II, we turned a similar challenge into an historic opportunity and, I might add, an historic achievement. An old order was in disarray; political and economic institutions were shattered. In that period, this Nation and its partners built new institutions, new mechanisms of mutual support and cooperation. Today, as then, we face an historic opportunity. If we act imaginatively and boldly, as we acted then, this period will in retrospect be seen as one of the great creative moments of our Nation's history. The whole world is watching to see how we respond. A resurgent American economy would do more to restore the confidence of the world in its own future than anything else we can do. The program that this Congress passes can demonstrate to the world that we have started to put our own house in order. If we can show that this Nation is able and willing to help other nations meet the common challenge, it can demonstrate that the United States will fulfill its responsibilities as a leader among nations. Quite frankly, at stake is the future of industrialized democracies, which have perceived their destiny in common and sustained it in common for 30 years. The developing nations are also at a turning point. The poorest nations see their hopes of feeding their hungry and developing their societies shattered by the economic crisis. The long-term economic future for the producers of raw materials also depends on cooperative solutions. Our relations with the Communist countries are a basic factor of the world environment. We must seek to build a long-term basis for coexistence. We will stand by our principles. We will stand by our interests. We will act firmly when challenged. The kind of a world we want depends on a broad policy of creating mutual incentives for restraint and for cooperation. As we move forward to meet our global challenges and opportunities, we must have the tools to do the job. Our military forces are strong and ready. This military strength deters aggression against our allies, stabilizes our relations with former adversaries, and protects our homeland. Fully adequate conventional and strategic forces cost many, many billions, but these dollars are sound insurance for our safety and for a more peaceful world. Military strength alone is not sufficient. Effective diplomacy is also essential in preventing conflict, in building world understanding. The Vladivostok negotiations with the Soviet Union represent a major step in moderating strategic arms competition. My recent discussions with the leaders of the Atlantic community, Japan, and South Korea have contributed to meeting the common challenge. But we have serious problems before us that require cooperation between the President and the Congress. By the Constitution and tradition, the execution of foreign policy is the responsibility of the President. In recent years, under the stress of the Vietnam war, legislative restrictions on the President's ability to execute foreign policy and military decisions have proliferated. As a Member of the Congress, I opposed some and I approved others. As President, I welcome the advice and cooperation of the House and the Senate. But if our foreign policy is to be successful, we cannot rigidly restrict in legislation the ability of the President to act. The conduct of negotiations is ill-suited to such limitations. Legislative restrictions, intended for the best motives and purposes, can have the opposite result, as we have seen most recently in our trade relations with the Soviet Union. For my part, I pledge this Administration will act in the closest consultation with the Congress as we face delicate situations and troubled times throughout the globe. When I became President only 5 months ago, I promised the last Congress a policy of communication, conciliation, compromise, and cooperation. I renew that pledge to the new Members of this Congress. Let me sum it up. America needs a new direction, which I have sought to chart here today--a change of course which will: put the unemployed back to work; increase real income and production; restrain the growth of Federal Government spending; achieve energy independence; and advance the cause of world understanding. We have the ability. We have the know-how. In partnership with the American people, we will achieve these objectives. As our 200th anniversary approaches, we owe it to ourselves and to posterity to rebuild our political and economic strength. Let us make America once again and for centuries more to come what it has so long been--a stronghold and a beacon-light of liberty for the whole world. Thank you. Source: https://www.presidency.ucsb.edu/documents/address-before-joint-session-the-congress-reporting-the-state-the-union-1

Nixon's First Watergate Address

Second Inaugural Address of Nixon SATURDAY, JANUARY 20, 1973 Mr. Vice President, Mr. Speaker, Mr. Chief Justice, Senator Cook, Mrs. Eisenhower, and my fellow citizens of this great and good country we share together: When we met here four years ago, America was bleak in spirit, depressed by the prospect of seemingly endless war abroad and of destructive conflict at home. As we meet here today, we stand on the threshold of a new era of peace in the world. The central question before us is: How shall we use that peace? Let us resolve that this era we are about to enter will not be what other postwar periods have so often been: a time of retreat and isolation that leads to stagnation at home and invites new danger abroad. Let us resolve that this will be what it can become: a time of great responsibilities greatly borne, in which we renew the spirit and the promise of America as we enter our third century as a nation. This past year saw far-reaching results from our new policies for peace. By continuing to revitalize our traditional friendships, and by our missions to Peking and to Moscow, we were able to establish the base for a new and more durable pattern of relationships among the nations of the world. Because of America's bold initiatives, 1972 will be long remembered as the year of the greatest progress since the end of World War II toward a lasting peace in the world. The peace we seek in the world is not the flimsy peace which is merely an interlude between wars, but a peace which can endure for generations to come. It is important that we understand both the necessity and the limitations of America's role in maintaining that peace. Unless we in America work to preserve the peace, there will be no peace. Unless we in America work to preserve freedom, there will be no freedom. But let us clearly understand the new nature of America's role, as a result of the new policies we have adopted over these past four years. We shall respect our treaty commitments. We shall support vigorously the principle that no country has the right to impose its will or rule on another by force. We shall continue, in this era of negotiation, to work for the limitation of nuclear arms, and to reduce the danger of confrontation between the great powers. We shall do our share in defending peace and freedom in the world. But we shall expect others to do their share. The time has passed when America will make every other nation's conflict our own, or make every other nation's future our responsibility, or presume to tell the people of other nations how to manage their own affairs. Just as we respect the right of each nation to determine its own future, we also recognize the responsibility of each nation to secure its own future. Just as America's role is indispensable in preserving the world's peace, so is each nation's role indispensable in preserving its own peace. Together with the rest of the world, let us resolve to move forward from the beginnings we have made. Let us continue to bring down the walls of hostility which have divided the world for too long, and to build in their place bridges of understanding--so that despite profound differences between systems of government, the people of the world can be friends. Let us build a structure of peace in the world in which the weak are as safe as the strong--in which each respects the right of the other to live by a different system--in which those who would influence others will do so by the strength of their ideas, and not by the force of their arms. Let us accept that high responsibility not as a burden, but gladly--gladly because the chance to build such a peace is the noblest endeavor in which a nation can engage; gladly, also, because only if we act greatly in meeting our responsibilities abroad will we remain a great Nation, and only if we remain a great Nation will we act greatly in meeting our challenges at home. We have the chance today to do more than ever before in our history to make life better in America--to ensure better education, better health, better housing, better transportation, a cleaner environment--to restore respect for law, to make our communities more livable--and to insure the God-given right of every American to full and equal opportunity. Because the range of our needs is so great--because the reach of our opportunities is so great--let us be bold in our determination to meet those needs in new ways. Just as building a structure of peace abroad has required turning away from old policies that failed, so building a new era of progress at home requires turning away from old policies that have failed. Abroad, the shift from old policies to new has not been a retreat from our responsibilities, but a better way to peace. And at home, the shift from old policies to new will not be a retreat from our responsibilities, but a better way to progress. Abroad and at home, the key to those new responsibilities lies in the placing and the division of responsibility. We have lived too long with the consequences of attempting to gather all power and responsibility in Washington. Abroad and at home, the time has come to turn away from the condescending policies of paternalism--of "Washington knows best." A person can be expected to act responsibly only if he has responsibility. This is human nature. So let us encourage individuals at home and nations abroad to do more for themselves, to decide more for themselves. Let us locate responsibility in more places. Let us measure what we will do for others by what they will do for themselves. That is why today I offer no promise of a purely governmental solution for every problem. We have lived too long with that false promise. In trusting too much in government, we have asked of it more than it can deliver. This leads only to inflated expectations, to reduced individual effort, and to a disappointment and frustration that erode confidence both in what government can do and in hat people can do. Government must learn to take less from people so that people an do more for themselves. Let us remember that America was built not by government, but by people--not by welfare, but by work--not by shirking responsibility, but by seeking responsibility. In our own lives, let each of us ask--not just what will government do for me, but what can I do for myself? In the challenges we face together, let each of us ask--not just how can government help, but how can I help? Your National Government has a great and vital role to play. And I pledge to you that where this Government should act, we will act boldly and we will lead boldly. But just as important is the role that each and every one of us must play, as an individual and as a member of his own community. From this day forward, let each of us make a solemn commitment in his own heart: to bear his responsibility, to do his part, to live his ideals--so that together, we can see the dawn of a new age of progress for America, and together, as we celebrate our 200th anniversary as a nation, we can do so proud in the fulfillment of our promise to ourselves and to the world. As America's longest and most difficult war comes to an end, let us again learn to debate our differences with civility and decency. And let each of us reach out for that one precious quality government cannot provide--a new level of respect for the rights and feelings of one another, a new level of respect for the individual human dignity which is the cherished birthright of every American. Above all else, the time has come for us to renew our faith in ourselves and in America. In recent years, that faith has been challenged. Our children have been taught to be ashamed of their country, ashamed of their parents, ashamed of America's record at home and of its role in the world. At every turn, we have been beset by those who find everything wrong with America and little that is right. But I am confident that this will not be the judgment of history on these remarkable times in which we are privileged to live. America's record in this century has been unparalleled in the world's history for its responsibility, for its generosity, for its creativity and for its progress. Let us be proud that our system has produced and provided more freedom and more abundance, more widely shared, than any other system in the history of the world. Let us be proud that in each of the four wars in which we have been engaged in this century, including the one we are now bringing to an end, we have fought not for our selfish advantage, but to help others resist aggression. Let us be proud that by our bold, new initiatives, and by our steadfastness for peace with honor, we have made a break-through toward creating in the world what the world has not known before-- a structure of peace that can last, not merely for our time, but for generations to come. We are embarking here today on an era that presents challenges great as those any nation, or any generation, has ever faced. We shall answer to God, to history, and to our conscience for the way in which we use these years. As I stand in this place, so hallowed by history, I think of others who have stood here before me. I think of the dreams they had for America, and I think of how each recognized that he needed help far beyond himself in order to make those dreams come true. Today, I ask your prayers that in the years ahead I may have God's help in making decisions that are right for America, and I pray for your help so that together we may be worthy of our challenge. Let us pledge together to make these next four years the best four years in America's history, so that on its 200th birthday America will be as young and as vital as when it began, and as bright a beacon of hope for all the world. Let us go forward from here confident in hope, strong in our faith in one another, sustained by our faith in God who created us, and striving always to serve His purpose. Source: https://avalon.law.yale.edu/20th_century/nixon2.asp

Winston Churchill Delivered 5 March 1946 at Westminster College, Fulton, Missouri "Sinews of Peace" (Iron Curtain Speech) I am glad to come to Westminster College this afternoon, and am complimented that you should give me a degree. The name "Westminster" is somehow familiar to me. I seem to have heard of it before. Indeed, it was at Westminster that I received a very large part of my education in politics, dialectic, rhetoric, and one or two other things. In fact we have both been educated at the same, or similar, or, at any rate, kindred establishments. It is also an honor, perhaps almost unique, for a private visitor to be introduced to an academic audience by the President of the United States. Amid his heavy burdens, duties, and responsibilities — unsought but not recoiled from — the President has traveled a thousand miles to dignify and magnify our meeting here to-day and to give me an opportunity of addressing this kindred nation, as well as my own countrymen across the ocean, and perhaps some other countries too. The President has told you that it is his wish, as I am sure it is yours, that I should have full liberty to give my true and faithful counsel in these anxious and baffling times. I shall certainly avail myself of this freedom, and feel the more right to do so because any private ambitions I may have cherished in my younger days have been satisfied beyond my wildest dreams. Let me, however, make it clear that I have no official mission or status of any kind, and that I speak only for myself. There is nothing here but what you see. I can therefore allow my mind, with the experience of a lifetime, to play over the problems which beset us on the morrow of our absolute victory in arms, and to try to make sure with what strength I have that what has been gained with so much sacrifice and suffering shall be preserved for the future glory and safety of mankind. The United States stands at this time at the pinnacle of world power. It is a solemn moment for the American Democracy. For with primacy in power is also joined an awe-inspiring accountability to the future. If you look around you, you must feel not only the sense of duty done but also you must feel anxiety lest you fall below the level of achievement. Opportunity is here now, clear and shining for both our countries. To reject it or ignore it or fritter it away will bring upon us all the long reproaches of the after-time. It is necessary that constancy of mind, persistency of purpose, and the grand simplicity of decision shall guide and rule the conduct of the English-speaking peoples in peace as they did in war. We must, and I believe we shall, prove ourselves equal to this severe requirement. When American military men approach some serious situation they are wont to write at the head of their directive the words "Overall Strategic Concept." There is wisdom in this, as it leads to clarity of thought. What then is the overall strategic concept which we should inscribe today? It is nothing less than the safety and welfare, the freedom and progress, of all the homes and families of all the men and women in all the lands. And here I speak particularly of the myriad cottage or apartment homes where the wage-earner strives amid the accidents and difficulties of life to guard his wife and children from privation and bring the family up in the fear of the Lord, or upon ethical conceptions which often play their potent part. To give security to these countless homes, they must be shielded from the two gaunt marauders, war and tyranny. We all know the frightful disturbances in which the ordinary family is plunged when the curse of war swoops down upon the bread-winner and those for whom he works and contrives. The awful ruin of Europe, with all its vanished glories, and of large parts of Asia glares us in the eyes. When the designs of wicked men or the aggressive urge of mighty States dissolve over large areas the frame of civilized society, humble folk are confronted with difficulties with which they cannot cope. For them all is distorted, all is broken, even ground to pulp. When I stand here this quiet afternoon I shudder to visualize what is actually happening to millions now and what is going to happen in this period when famine stalks the earth. None can compute what has been called "the unestimated sum of human pain." Our supreme task and duty is to guard the homes of the common people from the horrors and miseries of another war. We are all agreed on that. Our American military colleagues, after having proclaimed their "overall strategic concept" and computed available resources, always proceed to the next step — namely, "the method" Here again there is widespread agreement. A world organization has already been erected for the prime purpose of preventing war. U.N.O., the successor of the League of Nations, with the decisive addition of the United States and all that means, is already at work. We must make sure that its work is fruitful, that it is a reality and not a sham, that it is a force for action and not merely a frothing of words, that it is a true temple of peace in which the shields of many nations can someday be hung up, and not merely a cockpit in a Tower of Babel. Before we cast away the solid assurances of national armaments for self-preservation, we must be certain that our temple is built not upon shifting sands or quagmires, but upon the rock. Anyone can see with his eyes open that our path will be difficult and also long, but if we persevere together as we did in the two world wars — though not, alas, in the interval between them — I cannot doubt that we shall achieve our common purpose in the end. I have, however, a definite and practical proposal to make for action. Courts and magistrates may be set up but they cannot function without sheriffs and constables. The United Nations Organization must immediately begin to be equipped with an international armed force. In such a matter we can only go step by step, but we must begin now. I propose that each of the powers and states should be invited to dedicate a certain number of air squadrons to the service of the World Organization. These squadrons would be trained and prepared in their own countries but would move around in rotation from one country to another. They would wear the uniform of their own countries but with different badges. They would not be required to act against their own nation, but in other respects they would be directed by the World Organization. This might be started on a modest scale and would grow as confidence grew. I wished to see this done after the First World War, and I devoutly trust it may be done forthwith. It would nevertheless be wrong and imprudent to entrust the secret knowledge or experience of the atomic bomb, which the United States, Great Britain, and Canada now share, to the World Organization while it is still in its infancy. It would be criminal madness to cast it adrift in this still agitated and un-united world. No one in any country has slept less well in their beds because this knowledge and the method and the raw materials to apply it are at present largely retained in American hands. I do not believe we should all have slept so soundly had the positions been reversed and if some Communist or neo-Fascist State monopolized, for the time being, these dread agencies. The fear of them alone might easily have been used to enforce totalitarian systems upon the free democratic world, with consequences appalling to human imagination. God has willed that this shall not be, and we have at least a breathing space to set our house in order before this peril has to be encountered, and even then, if no effort is spared, we should still possess so formidable a superiority as to impose effective deterrents upon its employment, or threat of employment, by others. Ultimately, when the essential brotherhood of man is truly embodied and expressed in a world organization with all the necessary practical safeguards to make it effective, these powers would naturally be confided to that world organization. Now I come to the second danger of these two marauders which threatens the cottage home and the ordinary people — namely, tyranny. We cannot be blind to the fact that the liberties enjoyed by individual citizens throughout the British Empire are not valid in a considerable number of countries, some of which are very powerful. In these States, control is enforced upon the common people by various kinds of all-embracing police governments, to a degree which is overwhelming and contrary to every principle of democracy. The power of the State is exercised without restraint, either by dictators or by compact oligarchies operating through a privileged party and a political police. It is not our duty at this time, when difficulties are so numerous, to interfere forcibly in the internal affairs of countries which we have not conquered in war. But we must never cease to proclaim in fearless tones the great principles of freedom and the rights of man, which are the joint inheritance of the English-speaking world and which, through Magna Carta, the Bill of Rights, the Habeas Corpus, trial by jury, the English Common Law, find their most famous expression in the American Declaration of Independence. All this means that the people of any country have the right and should have the power by constitutional action, by free unfettered elections with secret ballot, to choose or change the character or form of government under which they dwell; that freedom of speech and thought should reign; that courts of justice, independent of the executive, unbiased by any party, should administer laws which have received the broad assent of large majorities or are consecrated by time and custom. Here are the title deeds of freedom, which should lie in every cottage home. Here is the message of the British and American peoples to mankind. Let us preach what we practice, let us practice what we preach. I have now stated the two great dangers which menace the homes of the people: War and Tyranny. I have not yet spoken of poverty and privation which are in many cases the prevailing anxiety. But if the dangers of war and tyranny are removed, there is no doubt that science and co-operation can bring in the next few years to the world, certainly in the next few decades newly taught in the sharpening school of war, an expansion of material well-being beyond anything that has yet occurred in human experience. Now, at this sad and breathless moment, we are plunged in the hunger and distress which are the aftermath of our stupendous struggle; but this will pass and may pass quickly, and there is no reason except human folly or sub-human crime which should deny to all the nations the inauguration and enjoyment of an age of plenty. I have often used words which I learned fifty years ago from a great Irish-American orator, a friend of mine, Mr. Bourke Cockran. "There is enough for all. The earth is a generous mother; she will provide in plentiful abundance food for all her children if they will but cultivate her soil in justice and in peace." So far I feel that we are in full agreement. Now, while still pursuing the method of realizing our overall strategic concept, I come to the crux of what I have traveled here to say. Neither the sure prevention of war, nor the continuous rise of world organization will be gained without what I have called the fraternal association of the English-speaking peoples. This means a special relationship between the British Commonwealth and Empire and the United States. This is no time for generalities, and I will venture to be precise. Fraternal association requires not only the growing friendship and mutual understanding between our two vast but kindred systems of society, but the continuance of the intimate relationship between our military advisers, leading to common study of potential dangers, the similarity of weapons and manuals of instructions, and to the interchange of officers and cadets at technical colleges. It should carry with it the continuance of the present facilities for mutual security by the joint use of all Naval and Air Force bases in the possession of either country all over the world. This would perhaps double the mobility of the American Navy and Air Force. It would greatly expand that of the British Empire Forces and it might well lead, if and as the world calms down, to important financial savings. Already we use together a large number of islands; more may well be entrusted to our joint care in the near future. The United States has already a Permanent Defense Agreement with the Dominion of Canada, which is so devotedly attached to the British Commonwealth and Empire. This Agreement is more effective than many of those which have often been made under formal alliances. This principle should be extended to all British Commonwealths with full reciprocity. Thus, whatever happens, and thus only, shall we be secure ourselves and able to work together for the high and simple causes that are dear to us and bode no ill to any. Eventually there may come — I feel eventually there will come — the principle of common citizenship, but that we may be content to leave to destiny, whose outstretched arm many of us can already clearly see. There is however an important question we must ask ourselves. Would a special relationship between the United States and the British Commonwealth be inconsistent with our over-riding loyalties to the World Organization? I reply that, on the contrary, it is probably the only means by which that organization will achieve its full stature and strength. There are already the special United States relations with Canada which I have just mentioned, and there are the relations between the United States and the South American Republics. We British have our Twenty-Years Treaty of Collaboration and Mutual Assistance with Soviet Russia. I agree with Mr. Bevin, the Foreign Secretary of Great Britain, that it might well be a Fifty-Years Treaty so far as we are concerned. We aim at nothing but mutual assistance and collaboration. The British have an alliance with Portugal unbroken since 1384, and which produced fruitful results at critical moments in the late war. None of these clash with the general interest of a world agreement, or a world organization; on the contrary they help it. "In my father's house are many mansions." Special associations between members of the United Nations which have no aggressive point against any other country, which harbor no design incompatible with the Charter of the United Nations, far from being harmful, are beneficial and, as I believe, indispensable. I spoke earlier of the Temple of Peace. Workmen from all countries must build that temple. If two of the workmen know each other particularly well and are old friends, if their families are inter-mingled, and if they have "faith in each other's purpose, hope in each other's future and charity towards each other's shortcomings" — to quote some good words I read here the other day — why cannot they work together at the common task as friends and partners? Why cannot they share their tools and thus increase each other's working powers? Indeed they must do so or else the temple may not be built, or, being built, it may collapse, and we shall all be proved again unteachable and have to go and try to learn again for a third time in a school of war, incomparably more rigorous than that from which we have just been released. The dark ages may return, the Stone Age may return on the gleaming wings of science, and what might now shower immeasurable material blessings upon mankind, may even bring about its total destruction. Beware, I say; time may be short. Do not let us take the course of allowing events to drift along until it is too late. If there is to be a fraternal association of the kind I have described, with all the extra strength and security which both our countries can derive from it, let us make sure that that great fact is known to the world, and that it plays its part in steadying and stabilizing the foundations of peace. There is the path of wisdom. Prevention is better than cure. A shadow has fallen upon the scenes so lately lighted by the Allied victory. Nobody knows what Soviet Russia and its Communist international organization intends to do in the immediate future, or what are the limits, if any, to their expansive and proselytizing tendencies. I have a strong admiration and regard for the valiant Russian people and for my wartime comrade, Marshal Stalin. There is deep sympathy and goodwill in Britain — and I doubt not here also — towards the peoples of all the Russians and a resolve to persevere through many differences and rebuffs in establishing lasting friendships. We understand the Russian need to be secure on her western frontiers by the removal of all possibility of German aggression. We welcome Russia to her rightful place among the leading nations of the world. We welcome her flag upon the seas. Above all, we welcome constant, frequent and growing contacts between the Russian people and our own people on both sides of the Atlantic. It is my duty however, for I am sure you would wish me to state the facts as I see them to you, to place before you certain facts about the present position in Europe. From Stettin in the Baltic to Trieste in the Adriatic, an iron curtain has descended across the Continent. Behind that line lie all the capitals of the ancient states of Central and Eastern Europe. Warsaw, Berlin, Prague, Vienna, Budapest, Belgrade, Bucharest and Sofia, all these famous cities and the populations around them lie in what I must call the Soviet sphere, and all are subject in one form or another, not only to Soviet influence but to a very high and, in many cases, increasing measure of control from Moscow. Athens alone — Greece with its immortal glories — is free to decide its future at an election under British, American and French observation. The Russian-dominated Polish Government has been encouraged to make enormous and wrongful inroads upon Germany, and mass expulsions of millions of Germans on a scale grievous and undreamed-of are now taking place. The Communist parties, which were very small in all these Eastern States of Europe, have been raised to pre-eminence and power far beyond their numbers and are seeking everywhere to obtain totalitarian control. Police governments are prevailing in nearly every case, and so far, except in Czechoslovakia, there is no true democracy. Turkey and Persia are both profoundly alarmed and disturbed at the claims which are being made upon them and at the pressure being exerted by the Moscow Government. An attempt is being made by the Russians in Berlin to build up a quasi-Communist party in their zone of Occupied Germany by showing special favors to groups of left-wing German leaders. At the end of the fighting last June, the American and British Armies withdrew westwards, in accordance with an earlier agreement, to a depth at some points of 150 miles upon a front of nearly four hundred miles, in order to allow our Russian allies to occupy this vast expanse of territory which the Western Democracies had conquered. If now the Soviet Government tries, by separate action, to build up a pro-Communist Germany in their areas, this will cause new serious difficulties in the British and American zones, and will give the defeated Germans the power of putting themselves up to auction between the Soviets and the Western Democracies. Whatever conclusions may be drawn from these facts — and facts they are — this is certainly not the Liberated Europe we fought to build up. Nor is it one which contains the essentials of permanent peace. The safety of the world requires a new unity in Europe, from which no nation should be permanently outcast. It is from the quarrels of the strong parent races in Europe that the world wars we have witnessed, or which occurred in former times, have sprung. Twice in our own lifetime we have seen the United States, against their wishes and their traditions, against arguments, the force of which it is impossible not to comprehend, drawn by irresistible forces, into these wars in time to secure the victory of the good cause, but only after frightful slaughter and devastation had occurred. Twice the United States has had to send several millions of its young men across the Atlantic to find the war; but now war can find any nation, wherever it may dwell between dusk and dawn. Surely we should work with conscious purpose for a grand pacification of Europe, within the structure of the United Nations and in accordance with our Charter. That I feel is an open cause of policy of very great importance. In front of the iron curtain which lies across Europe are other causes for anxiety. In Italy the Communist Party is seriously hampered by having to support the Communist-trained Marshal Tito's claims to former Italian territory at the head of the Adriatic. Nevertheless the future of Italy hangs in the balance. Again one cannot imagine a regenerated Europe without a strong France. All my public life I have worked for a strong France and I never lost faith in her destiny, even in the darkest hours. I will not lose faith now. However, in a great number of countries, far from the Russian frontiers and throughout the world, Communist fifth columns are established and work in complete unity and absolute obedience to the directions they receive from the Communist center. Except in the British Commonwealth and in the United States where Communism is in its infancy, the Communist parties or fifth columns constitute a growing challenge and peril to Christian civilization. These are somber facts for anyone to have to recite on the morrow of a victory gained by so much splendid comradeship in arms and in the cause of freedom and democracy; but we should be most unwise not to face them squarely while time remains. The outlook is also anxious in the Far East and especially in Manchuria. The Agreement which was made at Yalta, to which I was a party, was extremely favorable to Soviet Russia, but it was made at a time when no one could say that the German war might not extend all through the summer and autumn of 1945 and when the Japanese war was expected to last for a further 18 months from the end of the German war. In this country you are all so well-informed about the Far East, and such devoted friends of China, that I do not need to expatiate on the situation there. I have felt bound to portray the shadow which, alike in the west and in the east, falls upon the world. I was a minister at the time of the Versailles Treaty and a close friend of Mr. Lloyd-George, who was the head of the British delegation at Versailles. I did not myself agree with many things that were done, but I have a very strong impression in my mind of that situation, and I find it painful to contrast it with that which prevails now. In those days there were high hopes and unbounded confidence that the wars were over, and that the League of Nations would become all-powerful. I do not see or feel that same confidence or even the same hopes in the haggard world at the present time. On the other hand I repulse the idea that a new war is inevitable; still more that it is imminent. It is because I am sure that our fortunes are still in our own hands and that we hold the power to save the future, that I feel the duty to speak out now that I have the occasion and the opportunity to do so. I do not believe that Soviet Russia desires war. What they desire is the fruits of war and the indefinite expansion of their power and doctrines. But what we have to consider here to-day while time remains, is the permanent prevention of war and the establishment of conditions of freedom and democracy as rapidly as possible in all countries. Our difficulties and dangers will not be removed by closing our eyes to them. They will not be removed by mere waiting to see what happens; nor will they be removed by a policy of appeasement. What is needed is a settlement, and the longer this is delayed, the more difficult it will be and the greater our dangers will become. From what I have seen of our Russian friends and Allies during the war, I am convinced that there is nothing they admire so much as strength, and there is nothing for which they have less respect than for weakness, especially military weakness. For that reason the old doctrine of a balance of power is unsound. We cannot afford, if we can help it, to work on narrow margins, offering temptations to a trial of strength. If the Western Democracies stand together in strict adherence to the principles of the United Nations Charter, their influence for furthering those principles will be immense and no one is likely to molest them. If however they become divided or falter in their duty and if these all-important years are allowed to slip away then indeed catastrophe may overwhelm us all. Last time I saw it all coming and cried aloud to my own fellow-countrymen and to the world, but no one paid any attention. Up till the year 1933 or even 1935, Germany might have been saved from the awful fate which has overtaken her and we might all have been spared the miseries Hitler let loose upon mankind. There never was a war in history easier to prevent by timely action than the one which has just desolated such great areas of the globe. It could have been prevented in my belief without the firing of a single shot, and Germany might be powerful, prosperous and honored to-day; but no one would listen and one by one we were all sucked into the awful whirlpool. We surely must not let that happen again. This can only be achieved by reaching now, in 1946, a good understanding on all points with Russia under the general authority of the United Nations Organization and by the maintenance of that good understanding through many peaceful years, by the world instrument, supported by the whole strength of the English-speaking world and all its connections. There is the solution which I respectfully offer to you in this Address to which I have given the title "The Sinews of Peace." Let no man underrate the abiding power of the British Empire and Commonwealth. Because you see the 46 millions in our island harassed about their food supply, of which they only grow one half, even in war-time, or because we have difficulty in restarting our industries and export trade after six years of passionate war effort, do not suppose that we shall not come through these dark years of privation as we have come through the glorious years of agony, or that half a century from now, you will not see 70 or 80 millions of Britons spread about the world, united in defense of our traditions, our way of life, and of the world causes which you and we espouse. If the population of the English-speaking Commonwealths be added to that of the United States with all that such co-operation implies in the air, on the sea, all over the globe and in science and in industry, and in moral force, there will be no quivering, precarious balance of power to offer its temptation to ambition or adventure. On the contrary, there will be an overwhelming assurance of security. If we adhere faithfully to the Charter of the United Nations and walk forward in sedate and sober strength seeking no one's land or treasure, seeking to lay no arbitrary control upon the thoughts of men; if all British moral and material forces and convictions are joined with your own in fraternal association, the high-roads of the future will be clear, not only for us but for all, not only for our time, but for a century to come. Source: https://www.nationalchurchillmuseum.org/sinews-of-peace-iron-curtain-speech.html

LBJ’s Fourth Annual Message January 10, 1967 [Delivered in person before a joint session at 9:33 p.m.] Mr. Speaker, Mr. Vice President, distinguished Members of the Congress: I share with all of you the grief that you feel at the death today of one of the most beloved, respected, and effective Members of this body, the distinguished Representative from Rhode Island, Mr. Fogarty. I have come here tonight to report to you that this is a time of testing for our Nation. At home, the question is whether we will continue working for better opportunities for all Americans, when most Americans are already living better than any people in history. Abroad, the question is whether we have the staying power to fight a very costly war, when the objective is limited and the danger to us is seemingly remote. So our test is not whether we shrink from our country's cause when the dangers to us are obvious and close at hand, but, rather, whether we carry on when they seem obscure and distant--and some think that it is safe to lay down our burdens. I have come tonight to ask this Congress and this Nation to resolve that issue: to meet our commitments at home and abroad-to continue to build a better America--and to reaffirm this Nation's allegiance to freedom. As President Abraham Lincoln said, "We must ask where we are, and whither we are tending." I. The last 3 years bear witness to our determination to make this a better country. We have struck down legal barriers to equality. We have improved the education of 7 million deprived children and this year alone we have enabled almost 1 million students to go to college. We have brought medical care to older people who were unable to afford it. Three and one-half million Americans have already received treatment under Medicare since July. We have built a strong economy that has put almost 3 million more Americans on the payrolls in the last year alone. We have included more than 9 million new workers under a higher minimum wage. We have launched new training programs to provide job skills for almost 1 million Americans. We have helped more than a thousand local communities to attack poverty in the neighborhoods of the poor. We have set out to rebuild our cities on a scale that has never been attempted before. We have begun to rescue our waters from the menace of pollution and to restore the beauty of our land and our countryside, our cities and our towns. We have given 1 million young Americans a chance to earn through the Neighborhood Youth Corps--or through Head Start, a chance to learn. So together we have tried to meet the needs of our people. And, we have succeeded in creating a better life for the many as well as the few. Now we must answer whether our gains shall be the foundations of further progress, or whether they shall be only monuments to what might have been-abandoned now by a people who lacked the will to see their great work through. I believe that our people do not want to quit--though the task is great, the work hard, often frustrating, and success is a matter not of days or months, but of years-and sometimes it may be even decades. II. I have come here tonight to discuss with you five ways of carrying forward the progress of these last 3 years. These five ways concern programs, partnerships, priorities, prosperity, and peace. First, programs. We must see to it, I think, that these new programs that we have passed work effectively and are administered in the best possible way. Three years ago we set out to create these new instruments of social progress. This required trial and error--and it has produced both. But as we learn, through success and failure, we are changing our strategy and we are trying to improve our tactics. In the long run, these starts--some rewarding, others inadequate and disappointing--are crucial to SUCCESS. One example is the struggle to make life better for the less fortunate among us. On a similar occasion, at this rostrum in 1949, I heard a great American President, Harry S. Truman, declare this: "The American people have decided that poverty is just as wasteful and just as unnecessary as preventable disease." Many listened to President Truman that day here in this Chamber, but few understood what was required and did anything about it. The executive branch and the Congress waited 15 long years before ever taking any action on that challenge, as it did on many other challenges that great President presented. And when, 3 years ago, you here in the Congress joined with me in a declaration of war on poverty, then I warned, "It will not be a short or easy struggle-no single weapon... will suffice--but we shall not rest until that war is won." And I have come here to renew that pledge tonight. I recommend that we intensify our efforts to give the poor a chance to enjoy and to join in this Nation's progress. I shall propose certain administrative changes suggested by the Congress--as well as some that we have learned from our own trial and error. I shall urge special methods and special funds to reach the hundreds of thousands of Americans that are now trapped in the ghettos of our big cities and, through Head Start, to try to reach out to our very young, little children. The chance to learn is their brightest hope and must command our full determination. For learning brings skills; and skills bring jobs; and jobs bring responsibility and dignity, as well as taxes. This war--like the war in Vietnam--is not a simple one. There is no single battleline which you can plot each day on a chart. The enemy is not easy to perceive, or to isolate, or to destroy. There are mistakes and there are setbacks. But we are moving, and our direction is forward. This is true with other programs that are making and breaking new ground. Some do not yet have the capacity to absorb well or wisely all the money that could be put into them. Administrative skills and trained manpower are just as vital to their success as dollars. And I believe those skills will come. But it will take time and patience and hard work. Success cannot be forced at a single stroke. So we must continue to strengthen the administration of every program if that success is to come--as we know it must. We have done much in the space of 2 short years, working together. I have recommended, and you, the Congress, have approved, 10 different reorganization plans, combining and consolidating many bureaus of this Government, and creating two entirely new Cabinet departments. I have come tonight to propose that we establish a new department--a Department of Business and Labor. By combining the Department of Commerce with the Department of Labor and other related agencies, I think we can create a more economical, efficient, and streamlined instrument that will better serve a growing nation. This is our goal throughout the entire Federal Government. Every program will be thoroughly evaluated. Grant-in-aid programs will be improved and simplified as desired by many of our local administrators and our Governors. Where there have been mistakes, we will try very hard to correct them. Where there has been progress, we will try to build upon it. Our second objective is partnership--to create an effective partnership at all levels of government. And I should treasure nothing more than to have that partnership begin between the executive and the Congress. The 88th and the 89th Congresses passed more social and economic legislation than any two single Congresses in American history. Most of you who were Members of those Congresses voted to pass most of those measures. But your efforts will come to nothing unless it reaches the people. Federal energy is essential. But it is not enough. Only a total working partnership among Federal, State, and local governments can succeed. The test of that partnership will be the concern of each public organization, each private institution, and each responsible citizen. Each State, county, and city needs to examine its capacity for government in today's world, as we are examining ours in the executive department, and as I see you are examining yours. Some will need to reorganize and reshape their methods of administration-as we are doing. Others will need to revise their constitutions and their laws to bring them up to date--as we are doing. Above all, I think we must work together and find ways in which the multitudes of small jurisdictions can be brought together more efficiently. During the past 3 years we have returned to State and local governments about $40 billion in grants-in-aid. This year alone, 70 percent of our Federal expenditures for domestic programs will be distributed through the State and local governments. With Federal assistance, State and local governments by 1970 will be spending close to $110 billion annually. These enormous sums must be used wisely, honestly, and effectively. We intend to work closely with the States and the localities to do exactly that. Our third objective is priorities, to move ahead on the priorities that we have established within the resources that are available. I wish, of course, that we could do all that should be done--and that we could do it now. But the Nation has many commitments and responsibilities which make heavy demands upon our total resources. No administration would more eagerly utilize for these programs all the resources they require than the administration that started them. So let us resolve, now, to do all that we can, with what we have--knowing that it is far, far more than we have ever done before, and far, far less than our problems will ultimately require. Let us create new opportunities for our children and our young Americans who need special help. We should strengthen the Head Start program, begin it for children 3 years old, and maintain its educational momentum by following through in the early years. We should try new methods of child development and care from the earliest years, before it is too late to correct. And I will propose these measures to the 90th Congress. Let us insure that older Americans, and neglected Americans, share in their Nation's progress. We should raise social security payments by an overall average of 20 percent. That will add $4 billion 100 million to social security payments in the first year. I will recommend that each of the 23 million Americans now receiving payments get an increase of at least 15 percent. I will ask that you raise the minimum payments by 59 percent--from $44 to $70 a month, and to guarantee a minimum benefit of $100 a month for those with a total of 25 years of coverage. We must raise the limits that retired workers can earn without losing social security income. We must eliminate by law unjust discrimination in employment because of age. We should embark upon a major effort to provide self-help assistance to the forgotten in our midst--the American Indians and the migratory farm workers. And we should reach with the hand of understanding to help those who live in rural poverty. And I will propose these measures to the 90th Congress. So let us keep on improving the quality of life and enlarging the meaning of justice for all of our fellow Americans. We should transform our decaying slums into places of decency through the landmark Model Cities program. I intend to seek for this effort, this year, the full amount that you in Congress authorized last year. We should call upon the genius of private industry and the most advanced technology to help rebuild our great cities. We should vastly expand the fight for clean air with a total attack on pollution at its sources, and--because air, like water, does not respect manmade boundaries--we should set up "regional airsheds" throughout this great land. We should continue to carry to every corner of the Nation our campaign for a beautiful America--to clean up our towns, to make them more beautiful, our cities, our countryside, by creating more parks, and more seashores, and more open spaces for our children to play in, and for the generations that come after us to enjoy. We should continue to seek equality and justice for each citizen--before a jury, in seeking a job, in exercising his civil rights. We should find a solution to fair housing, so that every American, regardless of color, has a decent home of his choice. We should modernize our Selective Service System. The National Commission on Selective Service will shortly submit its report. I will send you new recommendations to meet our military manpower needs. But let us resolve that this is to be the Congress that made our draft laws as fair and as effective as possible. We should protect what Justice Brandeis called the "right most valued by civilized men"--the right to privacy. We should outlaw all wiretapping--public and private--wherever and whenever it occurs, except when the security of this Nation itself is at stake--and only then with the strictest governmental safeguards. And we should exercise the full reach of our constitutional powers to outlaw electronic "bugging" and "snooping." I hope this Congress will try to help me do more for the consumer. We should demand that the cost of credit be clearly and honestly expressed where average citizens can understand it. We should immediately take steps to prevent massive power failures, to safeguard the home against hazardous household products, and to assure safety in the pipelines that carry natural gas across our Nation. We should extend Medicare benefits that are now denied to 1,300,000 permanently and totally disabled Americans under 65 years of age. We should improve the process of democracy by passing our election reform and financing proposals, by tightening our laws regulating lobbying, and by restoring a reasonable franchise to Americans who move their residences. We should develop educational television into a vital public resource to enrich our homes, educate our families, and to provide assistance in our classrooms. We should insist that the public interest be fully served through the public's airwaves. And I will propose these measures to the 90th Congress. Now we come to a question that weighs very heavily on all our minds--on yours and mine. This Nation must make an all-out effort to combat crime. The 89th Congress gave us a new start in the attack on crime by passing the Law Enforcement Assistance Act that I recommended. We appointed the National Crime Commission to study crime in America and to recommend the best ways to carry that attack forward. And while we do not have all the answers, on the basis of its preliminary recommendations we are ready to move. This is not a war that Washington alone can win. The idea of a national police force is repugnant to the American people. Crime must be rooted out in local communities by local authorities. Our policemen must be better trained, must be better paid, and must be better supported by the local citizens that they try to serve and to protect. The National Government can and expects to help. And so I will recommend to the 90th Congress the Safe Streets and Crime Control Act of 1967. It will enable us to assist those States and cities that try to make their streets and homes safer, their police forces better, their corrections systems more effective, and their courts more efficient. When the Congress approves, the Federal Government will be able to provide a substantial percentage of the cost: --90 percent of the cost of developing the State and local plans, master plans, to combat crime in their area; --60 percent of the cost of training new tactical units, developing instant communications and special alarm systems, and introducing the latest equipment and techniques so that they can become weapons in the war on crime; --50 percent of the cost of building crime laboratories and police academy-type centers so that our citizens can be protected by the best trained and served by the best equipped police to be found anywhere. We will also recommend new methods to prevent juvenile delinquents from becoming adult delinquents. We will seek new partnerships with States and cities in order to deal with this hideous narcotics problem. And we will recommend strict controls on the sale of firearms. At the heart of this attack on crime must be the conviction that a free America--as Abraham Lincoln once said--must "let reverence for the laws . . . become the political religion of the Nation." Our country's laws must be respected. Order must be maintained. And I will support--with all the constitutional powers the President possesses--our Nation's law enforcement officials in their attempt to control the crime and the violence that tear the fabric of our communities. Many of these priority proposals will be built on foundations that have already been laid. Some will necessarily be small at first, but "every beginning is a consequence." If we postpone this urgent work now, it will simply have to be done later, and later we will pay a much higher price. Our fourth objective is prosperity, to keep our economy moving ahead, moving ahead steadily and safely. We have now enjoyed 6 years of unprecedented and rewarding prosperity. Last year, in 1966: --Wages were the highest in history-and the unemployment rate, announced yesterday, reached the lowest point in 13 years; --Total after-tax income of American families rose nearly 5 percent; --Corporate profits after taxes rose a little more than 5 percent; --Our gross national product advanced 5.5 percent, to about $740 billion; --Income per farm went up 6 percent. Now we have been greatly concerned because consumer prices rose 4.5 percent over the 18 months since we decided to send troops to Vietnam. This was more than we had expected--and the Government tried to do everything that we knew how to do to hold it down. Yet we were not as successful as we wished to be. In the 18 months after we entered World War II, prices rose not 4.5 percent, but 13.5 percent. In the first 18 months after Korea, after the conflict broke out there, prices rose not 4.5 percent, but 11 percent. During those two periods we had OPA price control that the Congress gave us and War Labor Board wage controls. Since Vietnam we have not asked for those controls and we have tried to avoid imposing them. We believe that we have done better, but we make no pretense of having been successful or doing as well as we wished. Our greatest disappointment in the economy during 1966 was the excessive rise in interest rates and the tightening of credit. They imposed very severe and very unfair burdens on our home buyers and on our home builders, and all those associated with the home industry. Last January, and again last September, I recommended fiscal and moderate tax measures to try to restrain the unbalanced pace of economic expansion. Legislatively and administratively we took several billions out of the economy. With these measures, in both instances, the Congress approved most of the recommendations rather promptly. As 1966 ended, price stability was seemingly being restored. Wholesale prices are lower tonight than they were in August. So are retail food prices. Monetary conditions are also easing. Most interest rates have retreated from their earlier peaks. More money now seems to be available. Given the cooperation of the Federal Reserve System, which I so earnestly seek, I am confident that this movement can continue. I pledge the American people that I will do everything in a President's power to lower interest rates and to ease money in this country. The Federal Home Loan Bank Board tomorrow morning will announce that it will make immediately available to savings and loan associations an additional $1 billion, and will lower from 6 percent to 5 3/4 percent the interest rate charged on those loans. We shall continue on a sensible course of fiscal and budgetary policy that we believe will keep our economy growing without new inflationary spirals; that will finance responsibly the needs of our men in Vietnam and the progress of our people at home; that will support a significant improvement in our export surplus, and will press forward toward easier credit and toward lower interest rates. I recommend to the Congress a surcharge of 6 percent on both corporate and individual income taxes--to last for 2 years or for so long as the unusual expenditures associated with our efforts in Vietnam continue. I will promptly recommend an earlier termination date if a reduction in these expenditures permits it. This surcharge will raise revenues by some $4.5 billion in the first year. For example, a person whose tax payment, the tax he owes, is $1,000, will pay, under this proposal, an extra $60 over the 12-month period, or $5 a month. The overwhelming majority of Americans who pay taxes today are below that figure and they will pay substantially less than $5 a month. Married couples with two children, with incomes up to $5,000 per year, will be exempt from this tax--as will single people with an income of up to $1,900 a year. Now if Americans today still paid the income and excise tax rates in effect when I came into the Presidency, in the year 1964, their annual taxes would have been over $20 billion more than at present tax rates. So this proposal is that while we have this problem and this emergency in Vietnam, while we are trying to meet the needs of our people at home, your Government asks for slightly more than one-fourth of that tax cut each year in order to try to hold our budget deficit in fiscal 1968 within prudent limits and to give our country and to give our fighting men the help they need in this hour of trial. For fiscal 1967, we estimate the budget expenditures to be $126.7 billion and revenues of $117 billion. That will leave us a deficit this year of $9.7 billion. For fiscal 1968, we estimate budget expenditures of $135 billion. And with the tax measures recommended, and a continuing strong economy, we estimate revenues will be $126.9 billion. The deficit then will be $8.1 billion. I will very soon forward all of my recommendations to the Congress. Yours is the responsibility to discuss and to debate them-to approve or modify or reject them. I welcome your views, as I have welcomed working with you for 30 years as a colleague and as Vice President and President. I should like to say to the Members of the opposition--whose numbers, if I am not mistaken, seem to have increased somewhat--that the genius of the American political system has always been best expressed through creative debate that offers choices and reasonable alternatives. Throughout our history, great Republicans and Democrats have seemed to understand this. So let there be light and reason in our relations. That is the way to a responsible session and a responsive government. Let us be remembered as a President and a Congress who tried to improve the quality of life for every American--not just the rich, not just the poor, but every man, woman, and child in this great Nation of ours. We all go to school--to good schools or bad schools. We all take air into our lungs-clean air or polluted air. We all drink water--pure water or polluted water. We all face sickness someday, and some more often than we wish, and old age as well. We all have a stake in this Great Society--in its economic growth, in reduction of civil strife--a great stake in good government. We just must not arrest the pace of progress we have established in this country in these years. Our children's children will pay the price if we are not wise enough, and courageous enough, and determined enough to stand up and meet the Nation's needs as well as we can in the time allotted us. III. Abroad, as at home, there is also risk in change. But abroad, as at home, there is a greater risk in standing still. No part of our foreign policy is so sacred that it ever remains beyond review. We shall be flexible where conditions in the world change--and where man's efforts can change them for the better. We are in the midst of a great transition-a transition from narrow nationalism to international partnership; from the harsh spirit of the cold war to the hopeful spirit of common humanity on a troubled and a threatened planet. In Latin America, the American chiefs of state will be meeting very shortly to give our hemispheric policies new direction. We have come a long way in this hemisphere since the inter-American effort in economic and social development was launched by the conference at Bogota in 1960 under the leadership of President Eisenhower. The Alliance for Progress moved dramatically forward under President Kennedy. There is new confidence that the voice of the people is being heard; that the dignity of the individual is stronger than ever in this hemisphere, and we are facing up to and meeting many of the hemispheric problems together. In this hemisphere that reform under democracy can be made to happen--because it has happened. So together, I think, we must now move to strike down the barriers to full cooperation among the American nations, and to free the energies and the resources of two great continents on behalf of all of our citizens. Africa stands at an earlier stage of development than Latin America. It has yet to develop the transportation, communications, agriculture, and, above all, the trained men and women without which growth is impossible. There, too, the job will best be done if the nations and peoples of Africa cooperate on a regional basis. More and more our programs for Africa are going to be directed toward self-help. The future of Africa is shadowed by unsolved racial conflicts. Our policy will continue to reflect our basic commitments as a people to support those who are prepared to work towards cooperation and harmony between races, and to help those who demand change but reject the fool's gold of violence. In the Middle East the spirit of good will toward all, unfortunately, has not yet taken hold. An already tortured peace seems to be constantly threatened. We shall try to use our influence to increase the possibilities of improved relations among the nations of that region. We are working hard at that task. In the great subcontinent of South Asia live more than a sixth of the earth's population. Over the years we--and others--have invested very heavily in capital and food for the economic development of India and Pakistan. We are not prepared to see our assistance wasted, however, in conflict. It must strengthen their capacity to help themselves. It must help these two nations--both our friends--to overcome poverty, to emerge as self-reliant leaders, and find terms for reconciliation and cooperation. In Western Europe we shall maintain in NATO an integrated common defense. But we also look forward to the time when greater security can be achieved through measures of arms control and disarmament, and through other forms of practical agreement. We are shaping a new future of enlarged partnership in nuclear affairs, in economic and technical cooperation, in trade negotiations, in political consultation, and in working together with the governments and peoples of Eastern Europe and the Soviet Union. The emerging spirit of confidence is precisely what we hoped to achieve when we went to work a generation ago to put our shoulder to the wheel and try to help rebuild Europe. We faced new challenges and opportunities then and there--and we faced also some dangers. But I believe that the peoples on both sides of the Atlantic, as well as both sides of this Chamber, wanted to face them together. Our relations with the Soviet Union and Eastern Europe are also in transition. We have avoided both the acts and the rhetoric of the cold war. When we have differed with the Soviet Union, or other nations, for that matter, I have tried to differ quietly and with courtesy, and without venom. Our objective is not to continue the cold war, but to end it. We have reached an agreement at the United Nations on the peaceful uses of outer space. We have agreed to open direct air flights with the Soviet Union. We have removed more than 400 nonstrategic items from export control. We are determined that the Export-Import Bank can allow commercial credits to Poland, Hungary, Bulgaria, and Czechoslovakia, as well as to Romania and Yugoslavia. We have entered into a cultural agreement with the Soviet Union for another 2 years. We have agreed with Bulgaria and Hungary to upgrade our legations to embassies. We have started discussions with international agencies on ways of increasing contacts with Eastern European countries. This administration has taken these steps even as duty compelled us to fulfill and execute alliances and treaty obligations throughout the world that were entered into before I became President. So tonight I now ask and urge this Congress to help our foreign and our commercial trade policies by passing an East-West trade bill and by approving our consular convention with the Soviet Union. The Soviet Union has in the past year increased its long-range missile capabilities. It has begun to place near Moscow a limited antimissile defense. My first responsibility to our people is to assure that no nation can ever find it rational to launch a nuclear attack or to use its nuclear power as a credible threat against us or against our allies. I would emphasize that that is why an important link between Russia and the United States is in our common interest, in arms control and in disarmament. We have the solemn duty to slow down the arms race between us, if that is at all possible, in both conventional and nuclear weapons and defenses. I thought we were making some progress in that direction the first few months I was in office. I realize that any additional race would impose on our peoples, and on all mankind, for that matter, an additional waste of resources with no gain in security to either side. I expect in the days ahead to closely consult and seek the advice of the Congress about the possibilities of international agreements bearing directly upon this problem. Next to the pursuit of peace, the really greatest challenge to the human family is the race between food supply and population increase. That race tonight is being lost. The time for rhetoric has clearly passed. The time for concerted action is here and we must get on with the job. We believe that three principles must prevail if our policy is to succeed: First, the developing nations must give highest priority to food production, including the use of technology and the capital of private enterprise. Second, nations with food deficits must put more of their resources into voluntary family planning programs. And third, the developed nations must all assist other nations to avoid starvation in the short run and to move rapidly towards the ability to feed themselves. Every member of the world community now bears a direct responsibility to help bring our most basic human account into balance. IV. I come now finally to Southeast Asia-and to Vietnam in particular. Soon I will submit to the Congress a detailed report on that situation. Tonight I want to just review the essential points as briefly as I can. We are in Vietnam because the United States of America and our allies are committed by the SEATO Treaty to "act to meet the common danger" of aggression in Southeast Asia. We are in Vietnam because an international agreement signed by the United States, North Vietnam, and others in 1962 is being systematically violated by the Communists. That violation threatens the independence of all the small nations in Southeast Asia, and threatens the peace of the entire region and perhaps the world. We are there because the people of South Vietnam have as much right to remain non-Communist--if that is what they choose-as North Vietnam has to remain Communist. We are there because the Congress has pledged by solemn vote to take all necessary measures to prevent further aggression. No better words could describe our present course than those once spoken by the great Thomas Jefferson: "It is the melancholy law of human societies to be compelled sometimes to choose a great evil in order to ward off a greater." We have chosen to fight a limited war in Vietnam in an attempt to prevent a larger war--a war almost certain to follow, I believe, if the Communists succeed in overrunning and taking over South Vietnam by aggression and by force. I believe, and I am supported by some authority, that if they are not checked now the world can expect to pay a greater price to check them later. That is what our statesmen said when they debated this treaty, and that is why it was ratified 82 to 1 by the Senate many years ago. You will remember that we stood in Western Europe 20 years ago. Is there anyone in this Chamber tonight who doubts that the course of freedom was not changed for the better because of the courage of that stand? Sixteen years ago we and others stopped another kind of aggression--this time it was in Korea. Imagine how different Asia might be today if we had failed to act when the Communist army of North Korea marched south. The Asia of tomorrow will be far different because we have said in Vietnam, as we said 16 years ago in Korea: "This far and no further." I think I reveal no secret when I tell you that we are dealing with a stubborn adversary who is committed to the use of force and terror to settle political questions. I wish I could report to you that the conflict is almost over. This I cannot do. We face more cost, more loss, and more agony. For the end is not yet. I cannot promise you that it will come this year--or come next year. Our adversary still believes, I think, tonight, that he can go on fighting longer than we can, and longer than we and our allies will be prepared to stand up and resist. Our men in that area--there are nearly 500,000 now--have borne well "the burden and the heat of the day." Their efforts have deprived the Communist enemy of the victory that he sought and that he expected a year ago. We have steadily frustrated his main forces. General Westmoreland reports that the enemy can no longer succeed on the battlefield. So I must say to you that our pressure must be sustained--and will be sustained-until he realizes that the war he started is costing him more than he can ever gain. I know of no strategy more likely to attain that end than the strategy of "accumulating slowly, but inexorably, every kind of material resource"--of "laboriously teaching troops the very elements of their trade." That, and patience--and I mean a great deal of patience. Our South Vietnamese allies are also being tested tonight. Because they must provide real security to the people living in the countryside. And this means reducing the terrorism and the armed attacks which kidnaped and killed 26,900 civilians in the last 32 months, to levels where they can be successfully controlled by the regular South Vietnamese security forces. It means bringing to the villagers an effective civilian government that they can respect, and that they can rely upon and that they can participate in, and that they can have a personal stake in. We hope that government is now beginning to emerge. While I cannot report the desired progress in the pacification effort, the very distinguished and able Ambassador, Henry Cabot Lodge, reports that South Vietnam is turning to this task with a new sense of urgency. We can help, but only they can win this part of the war. Their task is to build and protect a new life in each rural province. One result of our stand in Vietnam is already clear. It is this: The peoples of Asia now know that the door to independence is not going to be slammed shut. They know that it is possible for them to choose their own national destinies--without coercion. The 'performance of our men in Vietnam-backed by the American people--has created a feeling of confidence and unity among the independent nations of Asia and the Pacific. I saw it in their faces in the 19 days that I spent in their homes and in their countries. Fear of external Communist conquest in many Asian nations is already subsiding--and with this, the spirit of hope is rising. For the first time in history, a common outlook and common institutions are already emerging. This forward movement is rooted in the ambitions and the interests of Asian nations themselves. It was precisely this movement that we hoped to accelerate when I spoke at Johns Hopkins in Baltimore in April 1965, and I pledged "a much more massive effort to improve the life of man" in that part of the world, in the hope that we could take some of the funds that we were spending on bullets and bombs and spend it on schools and production. Twenty months later our efforts have produced a new reality: The doors of the billion dollar Asian Development Bank that I recommended to the Congress, and you endorsed almost unanimously, I am proud to tell you are already open. Asians are engaged tonight in regional efforts in a dozen new directions. Their hopes are high. Their faith is strong. Their confidence is deep. And even as the war continues, we shall play our part in carrying forward this constructive historic development. As recommended by the Eugene Black mission, and if other nations will join us, I will seek a special authorization from the Congress of $200 million for East Asian regional programs. We are eager to turn our resources to peace. Our efforts in behalf of humanity I think need not be restricted by any parallel or by any boundary line. The moment that peace comes, as I pledged in Baltimore, I will ask the Congress for funds to join in an international program of reconstruction and development for all the people of Vietnam-and their deserving neighbors who wish our help. We shall continue to hope for a reconciliation between the people of Mainland China and the world community--including working together in all the tasks of arms control, security, and progress on which the fate of the Chinese people, like their fellow men elsewhere, depends. We would be the first to welcome a China which decided to respect her neighbors' rights. We would be the first to applaud her were she to apply her great energies and intelligence to improving the welfare of her people. And we have no intention of trying to deny her legitimate needs for security and friendly relations with her neighboring countries. Our hope that all of this will someday happen rests on the conviction that we, the American people and our allies, will and are going to see Vietnam through to an honorable peace. We will support all appropriate initiatives by the United Nations, and others, which can bring the several parties together for unconditional discussions of peace--anywhere, any time. And we will continue to take every possible initiative ourselves to constantly probe for peace. Until such efforts succeed, or until the infiltration ceases, or until the conflict subsides, I think the course of wisdom for this country is that we just must firmly pursue our present course. We will stand firm in Vietnam. I think you know that our fighting men there tonight bear the heaviest burden of all. With their lives they serve their Nation. We must give them nothing less than our full support--and we have given them that-nothing less than the determination that Americans have always given their fighting men. Whatever our sacrifice here, even if it is more than $5 a month, it is small compared to their own. How long it will take I cannot prophesy. I only know that the will of the American people, I think, is tonight being tested. Whether we can fight a war of limited objectives over a period of time, and keep alive the hope of independence and stability for people other than ourselves; whether we can continue to act with restraint when the temptation to "get it over with" is inviting but dangerous; whether we can accept the necessity of choosing "a great evil in order to ward off a greater"; whether we can do these without arousing the hatreds and the passions that are ordinarily loosed in time of war--on all these questions so much turns. The answers will determine not only where we are, but "whither we are tending." A time of testing--yes. And a time of transition. The transition is sometimes slow; sometimes unpopular; almost always very painful; and often quite dangerous. But we have lived with danger for a long time before, and we shall live with it for a long time yet to come. We know that "man is born unto trouble." We also know that this Nation was not forged and did not survive and grow and prosper without a great deal of sacrifice from a great many men. For all the disorders that we must deal with, and all the frustrations that concern us, and all the anxieties that we are called upon to resolve, for all the issues we must face with the agony that attends them, let us remember that "those who expect to reap the blessings of freedom must, like men, undergo the fatigues of supporting it." But let us also count not only our burdens but our blessings--for they are many. And let us give thanks to the One who governs us all. Let us draw encouragement from the signs of hope--for they, too, are many. Let us remember that we have been tested before and America has never been found wanting. So with your understanding, I would hope your confidence, and your support, we are going to persist--and we are going to succeed. Source: https://www.presidency.ucsb.edu/documents/annual-message-the-congress-the-state-the-union-28

LBJ’s Fifth Annual Message January 17, 1968 [Delivered in person before a joint session at 9:05 p.m.] Mr. Speaker, Mr. President, Members of the Congress, and my fellow Americans: I was thinking as I was walking down the aisle tonight of what Sam Rayburn told me many years ago: The Congress always extends a very warm welcome to the President-as he comes in. Thank all of you very, very much. I have come once again to this Chamber-the home of our democracy--to give you, as the Constitution requires, "Information of the State of the Union." I report to you that our country is challenged, at home and abroad: --that it is our will that is being tried, not our strength; our sense of purpose, not our ability to achieve a better America; --that we have the strength to meet our every challenge; the physical strength to hold the course of decency and compassion at home; and the moral strength to support the cause of peace in the world. And I report to you that I believe, with abiding conviction, that this people--nurtured by their deep faith, tutored by their hard lessons, moved by their high aspirations-have the will to meet the trials that these times impose. Since I reported to you last January: --Three elections have been held in Vietnam--in the midst of war and under the constant threat of violence. --A President, a Vice President, a House and Senate, and village officials have been chosen by popular, contested ballot. --The enemy has been defeated in battle after battle. --The number of South Vietnamese living in areas under Government protection tonight has grown by more than a million since January of last year. These are all marks of progress. Yet: --The enemy continues to pour men and material across frontiers and into battle, despite his continuous heavy losses. --He continues to hope that America's will to persevere can be broken. Well--he is wrong. America will persevere. Our patience and our perseverance will match our power. Aggression will never prevail. But our goal is peace--and peace at the earliest possible moment. Right now we are exploring the meaning of Hanoi's recent statement. There is no mystery about the questions which must be answered before the bombing is stopped. We believe that any talks should follow the San Antonio formula that I stated last September, which said: --The bombing would stop immediately if talks would take place promptly and with reasonable hopes that they would be productive. --And the other side must not take advantage of our restraint as they have in the past. This Nation simply cannot accept anything less without jeopardizing the lives of our men and of our allies. If a basis for peace talks can be established on the San Antonio foundations--and it is my hope and my prayer that they can--we would consult with our allies and with the other side to see if a complete cessation of hostilities--a really true cease-fire--could be made the first order of business. I will report at the earliest possible moment the results of these explorations to the American people. I have just recently returned from a very fruitful visit and talks with His Holiness the Pope and I share his hope--as he expressed it earlier today--that both sides will extend themselves in an effort to bring an end to the war in Vietnam. I have today assured him that we and our allies will do our full part to bring this about. Since I spoke to you last January, other events have occurred that have major consequences for world peace. --The Kennedy Round achieved the greatest reduction in tariff barriers in all the history of trade negotiations. --The nations of Latin America at Punta del Este resolved to move toward economic integration. --In Asia, the nations from Korea and Japan to Indonesia and Singapore worked behind America's shield to strengthen their economies and to broaden their political cooperation. --In Africa, from which the distinguished Vice President has just returned, he reports to me that there is a spirit of regional cooperation that is beginning to take hold in very practical ways. These events we all welcomed. Yet since I last reported to you, we and the world have been confronted by a number of crises: --During the Arab-Israeli war last June, the hot line between Washington and Moscow was used for the first time in our history. A cease-fire was achieved without a major power confrontation. Now the nations of the Middle East have the opportunity to cooperate with Ambassador Jarring's U.N. mission and they have the responsibility to find the terms of living together in stable peace and dignity, and we shall do all in our power to help them achieve that result. --Not far from this scene of conflict, a crisis flared on Cyprus involving two peoples who are America's friends: Greece and Turkey. Our very able representative, Mr. Cyrus Vance, and others helped to ease this tension. --Turmoil continues on the mainland of China after a year of violent disruption. The radical extremism of their Government has isolated the Chinese people behind their own borders. The United States, however, remains willing to permit the travel of journalists to both our countries; to undertake cultural and educational exchanges; and to talk about the exchange of basic food crop materials. Since I spoke to you last, the United States and the Soviet Union have taken several important steps toward the goal of international cooperation. As you will remember, I met with Chairman Kosygin at Glassboro and we achieved if not accord, at least a clearer understanding of our respective positions after 2 days of meeting. Because we believe the nuclear danger must be narrowed, we have worked with the Soviet Union and with other nations to reach an agreement that will halt the spread of nuclear weapons. On the basis of communications from Ambassador Fisher in Geneva this afternoon, I am encouraged to believe that a draft treaty can be laid before the conference in Geneva in the very near future. I hope to be able to present that treaty to the Senate this year for the Senate's approval. We achieved, in 1967, a consular treaty with the Soviets, the first commercial air agreement between the two countries, and a treaty banning weapons in outer space. We shall sign, and submit to the Senate shortly, a new treaty with the Soviets and with others for the protection of astronauts. Serious differences still remain between us, yet in these relations, we have made some progress since Vienna, the Berlin Wall, and the Cuban missile crisis. But despite this progress, we must maintain a military force that is capable of deterring any threat to this Nation's security, whatever the mode of aggression. Our choices must not be confined to total war-or to total acquiescence. We have such a military force today. We shall maintain it. I wish--with all of my heart--that the expenditures that are necessary to build and to protect our power could all be devoted to the programs of peace. But until world conditions permit, and until peace is assured, America's might--and America's bravest sons who wear our Nation's uniform--must continue to stand guard for all of us--as they gallantly do tonight in Vietnam and other places in the world. Yet neither great weapons nor individual courage can provide the conditions of peace. For two decades America has committed itself against the tyranny of want and ignorance in the world that threatens the peace. We shall sustain that commitment. This year I shall propose: --That we launch, with other nations, an exploration of the ocean depths to tap its wealth, and its energy, and its abundance. --That we contribute our fair share to a major expansion of the International Development Association, and to increase the resources of the Asian Development Bank. --That we adopt a prudent aid program, rooted in the principle of self-help. --That we renew and extend the food for freedom program. Our food programs have already helped millions avoid the horrors of famine. But unless the rapid growth of population in developing countries is slowed, the gap between rich and poor will widen steadily. Governments in the developing countries must take such facts into consideration. We in the United States are prepared to help assist them in those efforts. But we must also improve the lives of children already born in the villages and towns and cities on this earth. They can be taught by great teachers through space communications and the miracle of satellite television-and we are going to bring to bear every resource of mind and technology to help make this dream come true. Let me speak now about some matters here at home. Tonight our Nation is accomplishing more for its people than has ever been accomplished before. Americans are prosperous as men have never been in recorded history. Yet there is in the land a certain restlessness--a questioning. The total of our Nation's annual production is now above $800 billion. For 83 months this Nation has been on a steady upward trend of growth. All about them, most American families can see the evidence of growing abundance: higher paychecks, humming factories, new cars moving down new highways. More and more families own their own homes, equipped with more than 70 million television sets. A new college is founded every week. Today more than half of the high school graduates go on to college. There are hundreds of thousands of fathers and mothers who never completed grammar school--who will see their children graduate from college. Why, then, this restlessness? Because when a great ship cuts through the sea, the waters are always stirred and troubled. And our ship is moving. It is moving through troubled and new waters; it is moving toward new and better shores. We ask now, not how can we achieve abundance?--but how shall we use our abundance? Not, is there abundance enough for all?--but, how can all share in our abundance? While we have accomplished much, much remains for us to meet and much remains for us to master. --In some areas, the jobless rate is still three or four times the national average --Violence has shown its face in some of our cities. --Crime increases on our streets. --Income for farm workers remains far behind that for urban workers; and parity for our farmers who produce our food is still just a hope--not an achievement. --New housing construction is far less than we need--to assure decent shelter for every family. --Hospital and medical costs are high, and they are rising. --Many rivers--and the air in many cities--remain badly polluted. And our citizens suffer from breathing that air. We have lived with conditions like these for many, many years. But much that we once accepted as inevitable, we now find absolutely intolerable. In our cities last summer, we saw how wide is the gulf for some Americans between the promise and the reality of our society. We know that we cannot change all of this in a day. It represents the bitter consequences of more than three centuries. But the issue is not whether we can change this; the issue is whether we will change this. Well, I know we can. And I believe we will. This then is the work we should do in the months that are ahead of us in this Congress. The first essential is more jobs, useful jobs for tens of thousands who can become productive and can pay their own way. Our economy has created 7 1/2 million new jobs in the past 4 years. It is adding more than a million and a half new jobs this year. Through programs passed by the Congress, job training is being given tonight to more than a million Americans in this country. This year, the time has come when we must get to those who are last in line--the hard-core unemployed--the hardest to reach. Employment officials estimate that 500,000 of these persons are now unemployed in the major cities of America. Our objective is to place these 500,000 in private industry jobs within the next 3 years. To do this, I propose a $2. 1 billion manpower program in the coming fiscal year-a 25 percent increase over the current year. Most of this increase will be used to start a new partnership between government and private industry to train and to hire the hard-core unemployed persons. I know of no task before us of more importance to us, to the country, or to our future. Another essential is to rebuild our cities. Last year the Congress authorized $662 million for the Model Cities program. I requested the full amount of that authorization to help meet the crisis in the cities of America. But the Congress appropriated only $312 million--less than half. This year I urge the Congress to honor my request for model cities funds to rebuild the centers of American cities by granting us the full amount that you in the Congress authorized--$1 billion. The next essential is more housing--and more housing now. Surely a nation that can go to the moon can place a decent home within the reach of its families. Therefore we must call together the resources of industry and labor, to start building 300,000 housing units for low- and middle-income families next year--that is three times more than this year. We must make it possible for thousands of families to become homeowners, not rent-payers. I propose, for the consideration of this Congress, a 10-year campaign to build 6 million new housing units for low and middle-income families. Six million units in the next 10 years. We have built 530,000 the last 10 years. Better health for our children--all of our children--is essential if we are to have a better America. Last year, Medicare, Medicaid, and other new programs that you passed in the Congress brought better health to more than 25 million Americans. American medicine--with the very strong support and cooperation of public resources-has produced a phenomenal decline in the death rate from many of the dread diseases. But it is a shocking fact that, in saving the lives of babies, America ranks 15th among the nations of the world. And among children, crippling defects are often discovered too late for any corrective action. This is a tragedy that Americans can, and Americans should, prevent. I shall, therefore, propose to the Congress a child health program to provide, over the next 5 years, for families unable to afford it--access to health services from prenatal care of the mother through the child's first year. When we do that you will find it is the best investment we ever made because we will get these diseases in their infancy and we will find a cure in a great many instances that we can never find by overcrowding our hospitals when they are grown. Now when we act to advance the consumer's cause I think we help every American. Last year, with very little fanfare the Congress and the executive branch moved in that field. We enacted the Wholesome Meat Act, the Flammable Fabrics Act, the Product Safety Commission, and a law to improve clinical laboratories. And now, I think, the time has come to complete our unfinished work. The Senate has already passed the truth-in-lending bill, the fire safety bill, and the pipeline safety laws. Tonight I plead with the House to immediately act upon these measures and I hope take favorable action upon all of them. I call upon the Congress to enact, without delay, the remainder of the 12 vital consumer protection laws that I submitted to the Congress last year. I also urge final action on a measure that is already passed by the House to guard against fraud and manipulation in the Nation's commodity exchange market. These measures are a pledge to our people-to keep them safe in their homes and at work, and to give them a fair deal in the marketplace. And I think we must do more. I propose: --New powers for the Federal Trade Commission to stop those who defraud and who swindle our public. --New safeguards to insure the quality of fish and poultry, and the safety of our community water supplies. --A major study of automobile insurance. --Protection against hazardous radiation from television sets and other electronic equipment. And to give the consumer a stronger voice, I plan to appoint a consumer counsel in the Justice Department--a lawyer for the American consumer--to work directly under the Attorney General, to serve the President's Special Assistant for Consumer Affairs, and to serve the consumers of this land. This Congress--Democrats and Republicans--can earn the thanks of history. We can make this truly a new day for the American consumer, and by giving him this protection we can live in history as the consumer-conscious Congress. So let us get on with the work. Let us act soon. We, at every level of the government, State, local, Federal, know that the American people have had enough of rising crime and lawlessness in this country. They recognize that law enforcement is first the duty of local police and local government. They recognize that the frontline headquarters against crime is in the home, the church, the city hall and the county courthouse and the statehouse--not in the far-removed National Capital of Washington. But the people also recognize that the National Government can and the National Government should help the cities and the States in their war on crime to the full extent of its resources and its constitutional authority. And this we shall do. This does not mean a national police force. It does mean help and financial support: --to develop State and local master plans to combat crime, --to provide better training and better pay for police, and --to bring the most advanced technology to the war on crime in every city and every county in America. There is no more urgent business before this Congress than to pass the Safe Streets Act this year that I proposed last year. That law will provide these required funds. They are so critically needed that I have doubled my request under this act to $100 million in fiscal 1969. And I urge the Congress to stop the trade in mail-order murder, to stop it this year by adopting a proper gun control law. This year, I will propose a Drug Control Act to provide stricter penalties for those who traffic in LSD and other dangerous drugs with our people. I will ask for more vigorous enforcement of all of our drug laws by increasing the number of Federal drug and narcotics control officials by more than 30 percent. The time has come to stop the sale of slavery to the young. I also request you to give us funds to add immediately 100 assistant United States attorneys throughout the land to help prosecute our criminal laws. We have increased our judiciary by 40 percent and we have increased our prosecutors by 16 percent. The dockets are full of cases because we don't have assistant district attorneys to go before the Federal judge and handle them. We start these young lawyers at $8,200 a year. And the docket is clogged because we don't have authority to hire more of them. I ask the Congress for authority to hire 100 more. These young men will give special attention to this drug abuse, too. Finally, I ask you to add 100 FBI agents to strengthen law enforcement in the Nation and to protect the individual rights of every citizen. A moment ago I spoke of despair and frustrated hopes in the cities where the fires of disorder burned last summer. We can-and in time we will--change that despair into confidence, and change those frustrations into achievements. But violence will never bring progress. We can make progress only by attacking the causes of violence and only where there is civil order founded on justice. Today we are helping local officials improve their capacity to deal promptly with disorders. Those who preach disorder and those who preach violence must know that local authorities are able to resist them swiftly, to resist them sternly, and to resist them decisively. I shall recommend other actions: --To raise the farmers' income by establishing a security commodity reserve that will protect the market from price-depressing stocks and protect the consumer from food scarcity. --I shall recommend programs to help farmers bargain more effectively for fair prices. --I shall recommend programs for new air safety measures. --Measures to stem the rising costs of medical care. --Legislation to encourage our returning veterans to devote themselves to careers in community service such as teaching, and being firemen, and joining our police force, and our law enforcement officials. --I shall recommend programs to strengthen and finance our anti-pollution efforts. --Fully funding all of the $2.18 billion poverty program that you in the Congress had just authorized in order to bring opportunity to those who have been left far behind. --I shall recommend an Educational Opportunity Act to speed up our drive to break down the financial barriers that are separating our young people from college. I shall also urge the Congress to act on several other vital pending bills--especially the civil rights measures--fair jury trials, protection of Federal rights, enforcement of equal employment opportunity, and fair housing. The unfinished work of the first session must be completed--the Higher Education Act, the Juvenile Delinquency Act, conservation measures to save the redwoods of California, and to preserve the wonders of our scenic rivers, the Highway Beautification Act--and all the other measures for a cleaner, and for a better, and for a more beautiful America. Next month we'll begin our 8th year of uninterrupted prosperity. The economic outlook for this year is one of steady growth-if we are vigilant. True, there are some clouds on the horizon. Prices are rising. Interest rates have passed the peak of 1966; and if there is continued inaction on the tax bill, they will climb even higher. I warn the Congress and the Nation tonight that this failure to act on the tax bill will sweep us into an accelerating spiral of price increases, a slump in homebuilding, and a continuing erosion of the American dollar. This would be a tragedy for every American family. And I predict that if this happens, they will all let us know about it. We--those of us in the executive branch, in the Congress, and the leaders of labor and business--must do everything we can to prevent that kind of misfortune. Under the new budget, the expenditures for 1969 will increase by $10.4 billion. Receipts will increase by $22.3 billion including the added tax revenues. Virtually all of this expenditure increase represents the mandatory cost of our defense efforts, $3 billion; increased interest, almost $1 billion; or mandatory payments under laws passed by Congress--such as those provided in the Social Security Act that you passed in 1967, and to Medicare and Medicaid beneficiaries, veterans, and farmers, of about $4 1/2 billion; and the additional $1 billion 600 million next year for the pay increases that you passed in military and civilian pay. That makes up the $10 billion that is added to the budget. With few exceptions, very few, we are holding the fiscal 1969 budget to last year's level, outside of those mandatory and required increases. A Presidential commission composed of distinguished congressional fiscal leaders and other prominent Americans recommended this year that we adopt a new budget approach. I am carrying out their recommendations in this year's budget. This budget, therefore, for the first time accurately covers all Federal expenditures and all Federal receipts, including for the first time in one budget $47 billion from the social security, Medicare, highway, and other trust funds. The fiscal 1969 budget has expenditures of approximately $186 billion, with total estimated revenues, including the tax bill, of about $178 billion. If the Congress enacts the tax increase, we will reduce the budget deficit by some $12 billion. The war in Vietnam is costing us about $25 billion and we are asking for about $12 billion in taxes--and if we get that $12 billion tax bill we will reduce the deficit from about $20 billion in 1968 to about $8 billion in 1969. Now, this is a tight budget. It follows the reduction that I made in cooperation with the Congress--a reduction made after you had reviewed every appropriations bill and reduced the appropriations by some $5 or $6 billion and expenditures by $1.5 billion. We conferred together and I recommended to the Congress and you subsequently approved taking 2 percent from payrolls and 10 percent from controllable expenditures. We therefore reduced appropriations almost $10 billion last session and expenditures over $4 billion. Now, that was in the budget last year. I ask the Congress to recognize that there are certain selected programs that meet the Nation's most urgent needs and they have increased. We have insisted that decreases in very desirable but less urgent programs be made before we would approve any increases. So I ask the Congress tonight: --to hold its appropriations to the budget requests, and --to act responsibly early this year by enacting the tax surcharge which for the average American individual amounts to about a penny out of each dollar's income. This tax increase would yield about half of the $23 billion per year that we returned to the people in the tax reduction bills of 1964 and 1965. This must be a temporary measure, which expires in less than 2 years. Congress can repeal it sooner if the need has passed. But Congress can never repeal inflation. The leaders of American business and the leaders of American labor--those who really have power over wages and prices--must act responsibly, and in their Nation's interest by keeping increases in line with productivity. If our recognized leaders do not do this, they and those for whom they speak and all of us are going to suffer very serious consequences. On January 1st, I outlined a program to reduce our balance of payments deficit sharply this year. We will ask the Congress to help carry out those parts of the program which require legislation. We must restore equilibrium to our balance of payments. We must also strengthen the international monetary system. We have assured the world that America's full gold stock stands behind our commitment to maintain the price of gold at $35 an ounce. We must back this commitment by legislating now to free our gold reserves. Americans, traveling more than any other people in history, took $4 billion out of their country last year in travel costs. We must try to reduce the travel deficit that we have of more than $2 billion. We are hoping that we can reduce it by $500 million--without unduly penalizing the travel of teachers, students, business people who have essential and necessary travel, or people who have relatives abroad whom they want to see. Even with this reduction of $500 million, the American people will still be traveling more overseas than they did in 1967, 1966, or 1965 or any other year in their history. If we act together as I hope we can, I believe we can continue our economic expansion which has already broken all past records. And I hope that we can continue that expansion in the days ahead. Each of these questions I have discussed with you tonight is a question of policy for our people. Therefore, each of them should be--and doubtless will be--debated by candidates for public office this year. I hope those debates will be marked by new proposals and by a seriousness that matches the gravity of the questions themselves. These are not appropriate subjects for narrow partisan oratory. They go to the heart of what we Americans are all about--all of us, Democrats and Republicans. Tonight I have spoken of some of the goals I should like to see America reach. Many of them can be achieved this year-others by the time we celebrate our Nation's 200th birthday--the bicentennial of our independence. Several of these goals are going to be very hard to reach. But the State of our Union will be much stronger 8 years from now on our 200th birthday if we resolve to reach these goals now. They are more important-much more important--than the identity of the party or the President who will then be in office. These goals are what the fighting and our alliances are really meant to protect. Can we achieve these goals? Of course we can--if we will. If ever there was a people who sought more than mere abundance, it is our people. If ever there was a nation that was capable of solving its problems, it is this Nation. If ever there were a time to know the pride and the excitement and the hope of being an American--it is this time. So this, my friends, is the State of our Union: seeking, building, tested many times in this past year--and always equal to the test. Thank you and good night. Source: https://www.presidency.ucsb.edu/documents/annual-message-the-congress-the-state-the-union-29