September 6, 1945
To the Congress of the United States:
I regret that you have been compelled to cut short your recess period. I know, however, that you have been just as eager as any of us to meet the problems which naturally have crowded down upon us with the surrender of the Japanese.
You have cut short a well-merited vacation in order to do so. I hope that the American people realize as fully as I do, that from the very first days of the emergency, the Congress has most energetically and patriotically devoted its time, energies, and capabilities to the immediate problems of war and to the long-range problems of peace. The legislative branch of the Government is entitled to its full share of credit and glory for the victory of the Allied armies. I wish to take this opportunity on behalf of the Nation to congratulate you on the great victory which has been won--in which you played so important a part.
The Congress reconvenes at a time of great emergency. It is an emergency about which, however, we need have no undue fear if we exercise the same energy, foresight, and wisdom as we did in carrying on the war and winning this victory.
The sudden surrender of the Japanese has not caught us unawares. President Roosevelt, as early as the Fall of 1943, began to set up machinery which he foresaw would become necessary to meet the reconversion period. The Congress in its wisdom has adopted some of that machinery by statute, and has improved and added to it. As a result, Government agencies, for some time, have been able to plan for the immediate and long-range steps which now have to be taken.
As the Congress has undoubtedly noticed, many steps were taken immediately after the surrender of the Japanese. Many more have been taken since.
The process of reconversion will be a complicated and difficult one. The general line of approach to the problem is to achieve as full peacetime production and employment as possible in the most efficient and speedy manner. The following policies have been laid down and will be followed:
(1) Demobilize as soon as possible the armed forces no longer needed.
(2) Cancel and settle war contracts as quickly as possible.
(3) Clear the war plants so as to permit contractors to proceed with peacetime production.
(4) Hold the line on prices and rents until fair competition can operate to prevent inflation and undue hardship on consumers.
(5) Hold wages in line where their increase would cause inflationary price rises. Where price ceilings would not be endangered, collective bargaining should be restored.
(6) Remove all possible wartime government controls in order to speed and encourage reconversion and expansion.
(7) Keep only those controls which are necessary to help reconversion and expansion by preventing bottlenecks, shortages of material, and inflation.
(8) Prevent rapid decrease of wage incomes or purchasing power.
The major objective, of course, is to reestablish an expanded peacetime industry, trade, and agriculture, and to do it as quickly as possible.
Obviously during this process there will be a great deal of inevitable unemployment. What we must do is to assist industry to reconvert to peacetime production as quickly and effectively as possible so that the number of unemployed will be swiftly and substantially reduced as industry and business and agriculture get into high production.
The Government is now doing what it can to hurry this reconversion process.
Through contract termination procedures it is providing quick payment to contractors.
It has released controls on practically all materials which are necessary for peacetime production, reserving only those few in which there is still a critical shortage.
It has made arrangements for credit facilities for industry.
By plant and surplus property disposal, it is helping private enterprise to get started again.
In the consumer field the Government has released controls over articles which were needed for the war in such large quantities that civilians had to go without.
For the information of the Congress, I am submitting as an appendix to this message a report by the Director of War Mobilization and Reconversion showing what has already been done by the Federal Government in reconversion.1
1Mr. Snyder's report, dated September 4, 1945, and entitled "The Transition: Phase One," is printed with the message in House Document 282 (79th Cong., 1st sess.).
There is much that the Congress can do to help this process and to tide over the period between now and the time when reconversion is completed and civilian jobs are plentiful in a stable economy that provides full production, full employment, and a high standard of living.
I. UNEMPLOYMENT COMPENSATION
The end of the war came more swiftly than most of us anticipated. Widespread cut-backs in war orders followed promptly. As a result, there has already been a considerable number of workers who are between jobs as war industries convert to peace. Other workers are returning to a 40-hour week and are faced with a corresponding reduction in take-home pay.
This has led to a natural feeling of uneasiness among the rank and file of our people. Let me emphasize that there will be no reason for undue timidity. A vast backlog of orders may soon make possible the greatest peacetime industrial activity that we have ever seen. But this can happen only if the Congress and the administration move vigorously and courageously to deal with the economic problems which peace has created. Then there need be no reason to fear either the immediate future or the years that lie ahead of us.
Determined action now will create the atmosphere of confidence which is so vital to a rapid reconversion with a minimum of unemployment and hardship.
No matter how rapidly reconversion proceeds, however, no amount of effort or planning will be able immediately to provide a job for everyone displaced from war work. Obviously, displaced war workers cannot find jobs until industry has been regeared and made ready to produce peacetime goods. During this lag the Government should provide help. The cost of this transition from war to peace is as much a part of the cost of war as the transition from peace to war--and we should so consider it.
This course is recommended not only as a matter of justice and humanity, but also as a matter of sound business. Nothing would be more harmful to our economy than to have every displaced war worker stop buying consumer goods. And nothing would be more conducive to a large-scale cessation of buying than the feeling on the part of displaced war workers that all their income had stopped and that their remaining financial resources had to be hoarded.
For one group of those who may become unemployed in the near future--the demobilized veterans--the Congress has already made special provision. Any veteran who has satisfactorily completed 90 days of service is now entitled by law to a weekly unemployment allowance of $20 for as much as 52 weeks depending on the length of his service.
By contrast, there are more than 15,000,000 workers not protected under our present unemployment insurance laws. There are many millions more for whom protection is inadequate. Many of these have been unable to accumulate adequate savings.
On May 28, 1945, I recommended to the Congress that the Federal Government immediately supplement the unemployment insurance benefits now provided by the several States. That is the only feasible way to provide at least a subsistence payment in all parts of the United States during this coming unemployment period.
As I pointed out then, the existing State laws relative to unemployment insurance are inadequate in three respects:
(1) Only about 30,000,000 of our 43,000,000 nonagricultural workers are protected by unemployment insurance. Federal Government employees, for example, such as Federal shipyard and arsenal workers, are not covered. Nor are employees of small businesses and small industrial establishments. Nor are the officers and men of the merchant marine who have braved enemy torpedoes and bombs to deliver supplies and the implements of war to our armed services and our allies.
(2) The weekly benefit payments under many of the State laws are now far too low to provide subsistence and purchasing power for the workers and their families. Almost half of the States have the clearly inadequate maximum of $15 to $18 a week.
(3) Many of the States pay benefits for too short a period. In more than one-third of the States, for example, 18 weeks is the maximum.
I recommended then, and I urgently renew my recommendation now, that the Congress take immediate action to make good these deficiencies for the present emergency period of reconversion.
Specifically, coverage should be extended to include Federal employees, maritime workers, and other workers not now insured. This additional compensation during the present emergency will have to be financed entirely by the Federal Government, but the benefits should appropriately be administered by the States.
I also recommended, and I now repeat that recommendation, that the Congress provide, through supplementary Federal emergency benefit payments, additional unemployment benefits so as to bring them up to adequate standards in all the States. All payments, however, should be made through the existing unemployment compensation machinery of the several States.
During this emergency every eligible worker should be entitled to 26 weeks of unemployment benefits in any one year. The maximum weekly payment for those workers whose previous earnings were high enough, should be not less than $25 per week.
If the Congress decides to take this very necessary step, it will also wish to reconsider and increase the unemployment allowance provided for veterans.
There has been so much misrepresentation about this temporary proposal that I think I should categorically state what the bill does not do.
It does not give everyone $25 a week. Under it, an applicant must be ready, willing, and able to work and must have earned wages high enough so that the percentage rate will yield this maximum figure.
It does not federalize the unemployment compensation system. It leaves it with the States.
It is not intended to take the place of the permanent amendments to the unemployment compensation system which are now being studied by the Congress. It is an emergency measure designed to expand the present system without changing its principles. It is designed only to meet the immediate pressing human problems of reconversion.
This recommendation is not to be confused with the broader question of extending, expanding, and improving our entire social security program of which unemployment insurance is only a part. I expect to communicate with the Congress on this subject at a later date. But I sincerely urge that we do not wait for consideration of such a complex question before enacting this much needed emergency legislation.
2. FAIR LABOR STANDARDS ACT
In addition to those workers who will temporarily lose their jobs, there will be millions of others whose incomes will fall sharply with the end of war production. These will be added to the several million wage earners who even now have hourly earnings much below what is necessary for a decent standard of living.
The inadequacy of these wages, in many cases, has been temporarily concealed by wartime increases in take-home pay resulting from overtime work. As these props to income are removed, however, low wage earners will be hard pressed to feed, clothe, and house their families. This flies in the face of a sound public policy. Failure to correct this situation will slow down, if it will not actually stop, our drive toward an expanding market for business and agriculture.
The foundations of a healthy national economy cannot be secure so long as any large section of our working people receive substandard wages. The existence of substandard wage levels sharply curtails the national purchasing power and narrows the market for the products of our farms and factories.
In the Fair Labor Standards Act of 1938, the Congress adopted a program intended to provide a minimum wage standard for a large number of American workers.
In that statute, the Congress declared it to be our national policy to eliminate, from interstate industry, wage levels detrimental to the maintenance of minimum standards of living. The establishment then of a minimum wage of 25 cents per hour represented a first step toward the realization of that policy. The goal of 40 cents per hour, which under the act was to be made effective by 1945, was actually made fully effective more than a year ago by the voluntary action of the industry committees.
I believed that the goal of a 40 cent minimum was inadequate when established. It has now become obsolete.
Increases in the cost of living since 1938 and changes in our national wage structure, require an immediate and substantial upward revision of this minimum. Only in that way can the objectives of the Fair Labor Standards Act be realized, the national purchasing power protected, and an economy of full production and abundance preserved and maintained for the American people.
The high prosperity which we seek in the postwar years will not be meaningful for all our people if any large proportion of our industrial wage earners receive wages as low as the minimum now sanctioned by the Fair Labor Standards Act.
I therefore recommend that the Congress amend the Fair Labor Standards Act by substantially increasing the minimum wage specified therein to a level which will eliminate substandards of living, and assure the maintenance of the health, efficiency, and general well-being of workers.
The scope of the Fair Labor Standards Act also should be clarified and extended. In view of changes which have occurred since 1938, I believe it is no longer necessary to exclude from the minimum wage program the large number of workers engaged in agricultural processing who are now excluded. There now exists a twilight zone in which some workers are covered, and others, doing similar work, are not. Extension of coverage would benefit both workers and employers by removing competitive inequities.
Our achievements in this field during the last seven years of establishing minimum wages have been gratifying; but we must continue to move forward, step by step.
I urge that the Congress act promptly. The wage structure on which businessmen may make future plans should be settled quickly.
3. WARTIME CONTROLS
One of the outstanding achievements of the war has been the success of the Government in holding the line against inflation. This is the first time in any major war that the United States has been able substantially to stabilize its economy.
That fact now permits us to enter into the difficult period of readjustment without the threat of a disastrous price collapse.
For this result much credit is due to the Congress, which in the face of great insistence from many interested pressure groups refused steadfastly to take the easy way.
Great credit is due to the Office of Economic Stabilization, the War Labor Board, the Office of Price Administration, the War Food Administration, the War Production Board, and the other stabilization agencies. Despite great pressure and often unjust abuse, they continued to hold the line for the benefit of the great mass of Americans.
And above all, great credit is due to the people of the United States, the great body of average citizens, who, for four difficult years and with only a few exceptions, subordinated their personal interest to the long-range interest of the Nation as a whole.
Many of the demands of the war for commodities have now decreased. They will decrease further during the initial period of unemployment which will come with the cancellation of war contracts. As a result, prices of some commodities are bound to soften. But if that happens in the next few months, we cannot allow ourselves to be misled. We must keep in mind the experience of the period immediately after the first World War. After a lull of a few months following the Armistice of 1918, prices turned upward, scrambling for inventories started, and prices soon got completely out of hand. We found ourselves in one of the worst inflations in our history, culminating in the crash of 1920 and the disastrous deflation of 1920 and 1921.
We must be sure this time not to repeat that bitter mistake. When reconversion really gets under way, and men go back to work, and payrolls increase, and the pent-up demands of the war years at home and abroad for peacetime products begin to make themselves felt, we shall face the same scramble for goods, the same speculative excesses that developed in 1919. We must be in a position to overcome that danger if we expect to achieve an orderly transition to peacetime levels of full production and full employment. However, we must not allow inflationary dangers to obscure our vision of the possibilities of lower incomes and widespread unemployment. Our policy must guard against both contingencies.
Immediately after the Japanese decision to surrender, the Office of Price Administration moved promptly to eliminate rationing on gasoline, fuel oil, stoves, and processed foods.
During the transition period the Price Administrator, of course, will eliminate rationing and price controls on one commodity after another just as soon as supply comes into balance with demand. At the same time he will make whatever price adjustments are required to facilitate rapid reconversion and reemployment.
However, it will be necessary for him to continue to resist unreasonable pressures for higher prices on some commodities, just as he has resisted them all through the war. In resisting these pressures and in carrying out his difficult responsibilities, I must state clearly that he has both my backing and my confidence.
It will similarly be necessary for the Government to resist pressures for increases in wage rates which would imperil price ceilings.
Without some general stabilization the consumer cannot be protected. Without stabilization, reconversion cannot proceed as rapidly as it should; for stability of cost is indispensable to sound business planning.
The price control and stabilization program has received the backing of the great majority of businessmen throughout the war period. With few exceptions, business groups have realized clearly their own personal stake and the stake of our basic economy in the success of the anti-inflation program.
During the months that lie ahead, however, some groups in business may be tempted to substitute for this long-range wartime thinking, a short-range policy designed to secure prices high enough to provide immediate profits over and above their temporarily high costs of production due to their initial low volume.
These pressures must be resisted. Prices must be held firmly on reconversion items as well as on cost of living items during the coming months.
The American people are entitled to a firm assurance not only on the part of the Administration, but from the Congress itself, that rents and the prices of clothing, food, and other essentials will be held in line. They are also entitled to buy washing machines, vacuum cleaners, automobiles and other products at prices based on our traditional system of high output and low unit costs.
The promise of good profits for businessmen must not be based on small initial volume. It must be based on the full all-out production which it is my belief that American industry will rapidly achieve.
Because of heavy wartime needs, it has been necessary to allocate available supplies of many foods among various claimants within this country, and among other countries. It has been necessary to set aside large blocks of specified commodities in order to make these commodities available for military and other essential needs. Rationing of food for consumers has been necessary in the interest of fair distribution.
Many of these controls have already been eliminated and all remaining allocations, set-asides, and rationing will be removed as rapidly as the supply situation will permit.
However, supplies of some of our principal foods will continue beyond the end of 1945 to be too small for the demand.
For example, the world will be short of requirements for fats and oils and sugar for some months, and allocations and rationing will probably have to be continued into 1946. We must not move so rapidly as to endanger the orderly distribution of goods on which we have based our living during the emergency.
Let me add that in no case should rationing controls be removed if by so doing we should jeopardize our relief shipments to Europe and other distressed war areas. We have a moral obligation to the people of these liberated areas. More than that, our own enlightened self-interest tells us that hungry people are rarely advocates of democracy. The rehabilitation of these countries, and indeed the removal of American occupational troops, may be unnecessarily delayed if we fail to meet these responsibilities during the next few months.
During the reconversion period and as long as shortages in certain materials other than food continue, the War Production Board will have to support the stabilization program as it has done during the past four years.
It must be in a position to take action where necessary, to increase scarce materials and facilities, break bottlenecks, channel production to meet essential needs, safeguard the opportunities for small business concerns, and, above all, to control inventories so as to prevent speculative hoarding and unbalanced distribution.
As the Congress knows, the War Production Board has already removed a great majority of the controls which were in force during the war, and many more will be removed during the next few months.
I trust that the Congress will agree, however, that the controls which still remain and which are still considered necessary by the agency charged with responsibility should not be removed until the need for them disappears. The need to control a few critical materials which the war has caused to be in short supply will continue for some time until adequate supplies are again available. Foremost among these materials are tin and crude rubber.
It will also be necessary for some period to prevent the hoarding of items now badly needed and in great demand for the civilian economy. Many critical shortages can be avoided by the extension of general inventory controls which would prevent the accumulation of unreasonably large stocks in the hands of a few. This will speed the reconversion program and will also greatly assist in avoiding inflation of the price structure.
The extension of one further type of control should have consideration at this time. In the national interest, this Government has made and should continue to make agreements for securing our fair share of materials from certain foreign sources and also agreements for supplying various materials and products abroad. The Government should have authority to assure the carrying out of such commitments.
These production and inventory controls, as well as the allocations of food, set-asides of commodities, and rationing among consumers have been set up under the Second War Powers Act.
Most of the provisions of this act expire on December 31, 1945.
I am convinced that an orderly transition to a peacetime economy will require the use of some of these controls after the first of the year.
I request the Congress, therefore, to extend the provisions of the Second War Powers Act, either in its present form or with appropriate limitations, preserving the powers necessary to achieve the objectives I have outlined.
The Congress has my definite assurance that none of these war powers will be exercised by the executive branch of the Government unless they are deemed essential to the attainment of the objective of an orderly stabilized reconversion. The Congress should, of course, if it extends the statute, reserve the right to terminate it by legislation at any time it deems necessary.
I hope that the Congress will not delay the extension of this authority. Delay would retard reconversion by creating uncertainty on the part of business as to whether necessary controls will be retained or not. Businessmen, in planning for next year's activities, will be assisted greatly by knowing in advance whether or not the Government is going to keep a firm hand at the brakes to prevent inflation.
The termination of the wartime food subsidies, for which a total of $1,798,000,000 has been authorized for the current year, is one of the important problems in reconversion. Agencies dealing directly with this problem are now meeting jointly to determine in what order and at what time these food subsidies may be eliminated without an undue disturbance to farm income or living costs.
Subsidies for purposes other than food are also being reviewed by the agencies concerned, who are collecting the necessary data for an orderly liquidation at the earliest date compatible with the stabilization program.
Those subsidies which were designed originally to stimulate increased production should not be removed at a time or in a manner to incite inflation and upset our economy.
I have directed that early reports be made on this important problem.
4. WAR POWERS AND EXECUTIVE AGENCIES REORGANIZATION
I should like to bring to the attention of the Congress the legal difficulties that will arise unless care is taken in the drafting of legislation terminating wartime controls and wartime agencies.
I have asked the Attorney General to prepare a report on the principal statutes that confer wartime powers and on the various wartime agencies, with particular reference to the circumstances under which each terminates.
A copy of this memorandum1 is attached for the information of the Congress. It is an able and comprehensive summary of the applicable laws.
1The report of the Attorney General to the President, in the form of a letter dated September 1, 1945, is printed with the message in House Document 282 (79th Cong., 1st sess.).
Your attention is particularly called to the statement in the opinion of the Attorney General to the effect that the broad basis of governmental power on which the existing emergency and wartime statutes rest has not been terminated by the unconditional surrender of our enemies.
Certain of the wartime statutes which have been made effective "in time of war," "during the present war," or "for the duration of the war" continue to be effective until a formal state of peace has been restored, or until some earlier termination date is made applicable by appropriate governmental action. Another group of statutes which by their provisions terminate "upon the cessation of hostilities" or "upon termination of the war," will in fact and in law terminate only by a formal proclamation to that effect by the President or by appropriate congressional action.
From time to time action will be taken with respect to these agencies, with the general objective of streamlining the Government into a peacetime organization as quickly as possible.
The time has not yet arrived, however, for the proclamation of the cessation of hostilities, much less the termination of the war. Needless to say, such proclamations will be made as soon as circumstances permit.
It has been necessary during the course of the war to make numerous important redistributions of functions among executive agencies.
This has been accomplished by the President under the authority of title I of the First War Powers Act. This act expires six months after the termination of the war, or at such earlier time as may be designated by appropriate governmental action.
If the Congress or the President were formally to declare the present war terminated, it would automatically cause all the steps taken under the First War Powers Act with respect to the war agencies to expire, and would have the Government revert automatically to its preexisting status six months after the declaration.
If this were to occur, it would cause great confusion and chaos in the Government.
It is the policy of this administration not to exercise wartime powers beyond the point at which it is necessary to exercise them.
Similarly, the wartime agencies of the Government will not be allowed to continue to perform functions not required by present conditions.
Those functions of the wartime agencies which must be retained during part or all of the period of reconversion should be transferred as promptly as practicable to the permanent departments and agencies of the Government. The remaining functions, appropriate only to the crisis through which we have passed, should be terminated in an orderly, systematic fashion as soon as possible.
A program of winding up wartime agencies and distributing their functions on a peacetime basis is now being pursued under the powers vested in the President by title I of the First War Powers Act.
Therefore, I urge that the Congress do not yet adopt a resolution proclaiming the termination of the war or the termination of the emergency or the cessation of hostilities. Such a resolution would automatically cause the death of many war powers and wartime agencies before we are ready.
At the same time I recognize that the Congress may wish to repeal certain specific wartime statutes. If this is to be done, the repeal should be on a selective basis, through the adoption of specific statutes dealing with each wartime power which the Congress decides should be terminated.
In my message dated May 24, 1945, it was recommended that permanent legislation be enacted which would authorize the President to submit to the Congress, from time to time, plans providing for the reorganization of executive agencies, each such plan to become effective unless the Congress should reject it by concurrent resolution.
This type of joint action by the Congress and the President has produced, and will produce, far better results than can be achieved by the usual legislative process in the field of executive reorganization. If proper progress is to be made, it is necessary to permit the President to lay out the machinery for carrying out his responsibility for the conduct of the executive branch, subject to rejection by the two Houses of Congress. Executive initiative, subject to congressional veto, is an effective approach to governmental reorganization.
The responsibility of conducting the executive branch rests upon the President. It is fair and efficient to permit him to lay out the machinery for carrying out that responsibility.
The means for doing this should be generally along the lines of the Reorganization Act of 1939, which gives the initiative to the President, but reserves power to the Congress by a majority vote to nullify any action of the President which does not meet with its approval.
Considerable progress was made in efficiency of government under this Reorganization Act of 1939. I recommend that such powers be made of permanent duration and that the legislation be sufficiently flexible to permit any kind of adjustment for which necessity may arise.
It is clear to all of us that the Government has a difficult and important task in the years which lie ahead. Our Government belongs to the people and the people have a right to expect from their Government the greatest possible efficiency in carrying out its task.
Our Government has never been as efficient as we should like to see it. To some degree this ,nay be charged to the size of some of the tasks assigned to it. To some extent, it is also due to the lack of trained Government personnel and the low salaries paid to Government officials.
There is no question that the war has taught us a great deal about Government administration. There is still, however, much room for improvement.
I have undertaken directly through the members of the Cabinet and also through the Directors of the Office of War Mobilization and Reconversion and the Bureau of the Budget to emphasize the need for more efficient operation in all the executive branches of the Government. I have requested them to examine administrative procedures, and to speed up and simplify their operations to the maximum practical degree.
I have also requested the Bureau of the Budget to examine closely with each department and agency head, the actual needs of his office following the surrender of Japan. They have been asked to reduce budgets promptly and fully wherever cuts are indicated. The Bureau of the Budget is now completing studies which will result in reductions of millions of dollars in the expense of operating our Government.
We must continue relentlessly this program for increased Government efficiency. The Congress can depend upon the Executive to push this program with the utmost vigor.
5. FULL EMPLOYMENT
I am confident that, with the cooperation of American industry, labor, and agriculture, we can bridge the gap between war and peace.
When we have reconverted our economy to a peacetime basis, however, we shall not be satisfied with merely our prewar economy. The American people have set high goals for their own future. They have set these goals high because they have seen how great can be the productive capacity of our country.
The levels of production and income reached during the war years have given our citizens an appreciation of what a full production peacetime economy can be.
They are not interested in boom prosperity--for that only too often leads to panic and depression. But they are interested in providing opportunity for work and for ultimate security.
Government must do its part and assist industry and labor to get over the line from war to peace.
That is why I have asked for unemployment compensation legislation.
That is why I now ask for full-employment legislation.
The objectives for our domestic economy which we seek in our long-range plans were summarized by the late President Franklin D. Roosevelt over a year and a half ago in the form of an economic bill of rights. Let us make the attainment of those rights the essence of postwar American economic life.
I repeat the statement of President Roosevelt:
In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a .second bill of rights under which a new basis of security and prosperity can be established for all--regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries, or shops or farms or mines of the Nation.
The right to earn enough to provide adequate food and clothing and recreation.
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
The right of every family to a decent home.
The right to adequate medical care and the opportunity to achieve and enjoy good health.
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.
The right to a good education.
All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.
America's own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens. For unless there is security here at home there cannot be lasting peace in the world.
I shall from time to time communicate with the Congress on some of the subjects included in this enumeration of economic rights.
Most of them, in the last analysis, depend upon full production and full employment at decent wages.
There has been much discussion about the necessity of continuing full employment after the war if we hope to continue in substantial degree the prosperity which came with the war years. The time has come for action along these lines.
To provide jobs we must look first and foremost to private enterprise-to industry, agriculture, and labor. Government must inspire enterprise with confidence. That confidence must come mainly through deeds, not words.
But it is clear that confidence will be promoted by certain assurances given by the Government:
Assurance that all the facts about full employment and opportunity will be gathered periodically for the use of all.
Assurance of stability and consistency in public policy, so that enterprise can plan better by knowing what the Government intends to do.
Assurance that every governmental policy and program will be pointed to promote maximum production and employment in private enterprise.
Assurance that priority will be given to doing those things first which stimulate normal employment most.
A national reassertion of the right to work for every American citizen able and willing to work--a declaration of the ultimate duty of Government to use its own resources if all other methods should fail to prevent prolonged unemployment--these will help to avert fear and establish full employment. The prompt and firm acceptance of this bedrock public responsibility will reduce the need for its exercise.
I ask that full employment legislation to provide these vital assurances be speedily enacted. Such legislation should also provide machinery for a continuous full-employment policy--to be developed and pursued in cooperation among industry, agriculture, and labor, between the Congress and the Chief Executive, between the people and their Government.
Full employment means full opportunity for all under the American economic system--nothing more and nothing less.
In human terms, full employment means opportunity to get a good peacetime job for every worker who is ready, able, and willing to take one. It does not mean made work, or making people work.
In economic terms, full employment means full production and the opportunity to sell goods--all the goods that industry and agriculture can produce.
In Government terms, full employment means opportunity to reduce the ratio of public spending to private investment without sacrificing essential services.
In world-wide terms, full employment in America means greater economic security and more opportunity for lasting peace throughout the world.
These goals and the machinery to carry them out are set forth in legislation now pending before the Congress on which extensive public hearings have been held. The country justifiably expects early action along these lines.
6. FAIR EMPLOYMENT PRACTICE COMMITTEE
During the years of war production we made substantial progress in overcoming many of the prejudices which had resulted in discriminations against minority groups.
Many of the injustices based upon considerations of race, religion, and color were removed. Many were prevented. Perfection was not reached, of course, but substantial progress was made.
In the reconversion period and thereafter, we should make every effort to continue this American ideal. It is one of the fundamentals of our political philosophy, and it should be an integral part of our economy.
The Fair Employment Practice Committee is continuing during the transition period. I have already requested that legislation be enacted placing the Fair Employment Practice Committee on a permanent basis. I repeat that recommendation.
7. LABOR DISPUTES AND WAGE STABILIZATION
Our national welfare requires that during the reconversion period production of civilian goods and services--as full production as possible-go forward without interruption, and that labor and industry cooperate to keep strikes and lock-outs at a minimum.
Those who have the responsibility of labor relations must recognize that responsibility. This is not the time for short-sighted management to seize upon the chance to reduce wages and try to injure labor unions. Equally it is not the time for labor leaders to shirk their responsibility and permit widespread industrial strife.
With this objective in view, I shall shortly convene a conference of representatives of organized labor and industry for the purpose of working out by agreement means to minimize labor disputes.
In the interim period, pending the convening of the conference, I have called upon the representatives of organized labor and industry to continue their adherence to the no-strike, no-lock-out policy. During this interim period, labor disputes which threaten a substantial interference with the transition to a peacetime economy should be submitted to the War Labor Board. They would there be handled by the Board under existing procedures. The country will expect parties to any such disputes to comply voluntarily with the determinations of the War Labor Board.
The threat of inflationary bidding-up of wage rates by competition in a short labor market has disappeared. Therefore the War Labor Board has removed the necessity of approving proposed voluntary wage increases, so long as they will not be used to obtain an increase in price ceilings.
I have conferred upon the War Labor Board adequate authority to correct maladjustments and inequities in wage rates arising in the reconversion period which will tend to interfere with the effective transition to a peacetime economy.
The Board should be terminated as soon after the conclusion of the forthcoming industry-labor conference as the orderly disposition of the work of the Board and the provisions of the War Labor Disputes Act permit, and after facilities have been provided to take care of the wage stabilization functions under the act of October 2, 1942.
Meanwhile, plans for strengthening the Department of Labor, and bringing under it functions properly belonging to it, are going forward. With the return to a peacetime economy and the elimination of the present temporary wartime agencies and procedures, we must look to collective bargaining, aided and supplemented by a truly effective system of conciliation and voluntary arbitration, as the best and most democratic method of maintaining sound industrial relations.
8. UNITED STATES EMPLOYMENT SERVICE EXTENSION
Placing demobilized veterans and displaced war workers in new peacetime jobs is the major human problem of our country's reconversion to a peacetime economy. It is imperative that this work be done swiftly and efficiently, and that men and women lose a minimum amount of time between jobs.
The next few months are crucial. What we do now will affect our American way of life for decades to come.
The United States Employment Service has an important responsibility in the performance of this task.
At present, this agency operates as a national and centralized system with a free flow of information among its offices. Under the 1946 appropriation act, the offices are to be turned back to the 48 States within 90 days after the cessation of hostilities.
Shortly after the declaration of war, the Government realized that the manpower of the Nation could be mobilized more efficiently if the United States Employment Service were centralized under Federal control. Hundreds of thousands of workers had to be recruited from all parts of the country. Often, they were wanted in regions far from their homes. Certain areas had surpluses of labor; others were desperately in need of more workers. This situation could be met only through a centrally operated employment service that covered the entire Nation.
Now we are faced with this problem in reverse. Hundreds of thousands of men and women will want to seek jobs in towns and cities other than those in which they worked during the war. They may want to return home, or they may want to strike out in search of new opportunities in new surroundings. Millions of veterans also will be coming back in search of peacetime jobs. They will want to know where such jobs can be found, not only in their own areas, but also in other parts of the land.
The task of helping this vast army of job seekers to fit themselves into peacetime economy is fully as difficult as the mobilization of manpower for war. To make any decided change in the machinery to handle this problem now would cause unnecessary hardship to workers and veterans. It would slow down the entire process of reconversion.
I urgently recommend that the Congress do not yet return the Employment Service to the States. Ultimately it should be so returned. However, it should be continued under Federal control at least until the expiration of the War Mobilization Act--June 30, 1947.
I also recommend that its appropriation be increased by $10,000,000 for the current fiscal year. Prompt action on this matter is especially important since personnel and facilities must be quickly enlarged to handle the rising tide of veterans and war workers who will be seeking jobs.
9. AGRICULTURE
One of the most magnificent production jobs in the war has been done by the farmers of the United States. They have met the unprecedented demands of the war, and, at the same time, have provided our civilian population with more food per capita than during the 1935-39 prewar period.
No other group in America labored longer or harder to meet the war demands put upon them. Food production last year reached a peak more than a third above the prewar years despite the fact that farm population has declined by about five million since 1940.
Fortunately, farmers were aided by better-than-average weather conditions over the country. We cannot, however, count on continuance of better-than-average weather. Therefore, because of the great demands for food that exist in this country and for relief abroad, the Department of Agriculture is planning for another year of full production. This does not mean the same volume of production for each individual crop, because the surrender of Japan has brought changes in the demand pattern. But the total acreage needed for next year will not be greatly different from this year.
The Government now must be prepared to carry out the Nation's responsibility to aid farmers in making their necessary readjustments from a wartime to a peacetime basis. The Congress already has provided postwar supports against price collapse for many farm products. This was a provision of wisdom and foresight.
After the First World War farm prices dropped more than 50 percent from the spring of 1920 to the spring of 1921. We do not intend to permit a repetition of the disaster that followed the First World War. The Secretary of Agriculture has assured me that he will use all means now authorized by the Congress to carry out the price-support commitments.
But there is need for additional measures to strengthen the machinery for carrying out price-support commitments, and for laying the basis for broader peacetime markets for agricultural products.
The Congress already has provided for one such postwar measure that needs now to be adapted to our changed situation. Recognizing that the lend-lease program required greatly increased production and that this increase could not be suddenly discontinued when the program stopped, the Congress wisely set aside $500,000,000 of lend-lease funds for price support of farm commodities. This money is now available for the purpose for which it was intended, but in order that it may be used most effectively whenever the need arises, I recommend early legislation which would make those funds available to the Commodity Credit Corporation on a continuing basis. Such action would reaffirm the specific intent of the Congress as to the use of this money in safeguarding farm prices.
Strengthening the machinery for carrying out price-support commitments is the one measure necessary to safeguard farm prices. Stimulation of the export of farm commodities is another. More food is needed in the war-ravaged areas of the world. In the process of meeting relief requirements abroad, we have the opportunity of developing export markets for the future.
The farmer has always faced certain specific problems which are peculiar to his occupation. His crops are at the mercy of the weather.
The factory owner and the worker at the machine have available to them insurance programs which protect them from losses. Our farmers have the right to the same kind of protection. Strengthening and further development of crop insurance for farmers, organized and backed by the Federal Government, can give them this protection. A well-rounded crop-insurance program, together with the assurance of reasonable and stable farm prices, will go a long way toward meeting basic problems which have plagued farmers in the past.
Much that has been accomplished during the war was made possible by the wise national program in support of scientific research in agriculture and forestry, and by the program for the conservation and improvement of our soil and forest resources. These policies have paid large dividends during the war. We ought to continue and strengthen them.
Within recent years the Congress has enacted various measures which have done much to improve the economic status of this country's farmers and to make rural living more attractive. In enacting individual pieces of legislation it has not been possible to make adjustments in existing measures in keeping with the changing pattern of needs. The Secretary of Agriculture is now reexamining existing agricultural programs in the light of peacetime needs in order that they make the fullest contribution to the welfare of farmers and the people as a whole. I hope that the Congress also, through its appropriate committees, will give careful consideration to this problem with a view to making such adjustments as are necessary to strengthen the effectiveness of these various measures.
10. SELECTIVE SERVICE
While the cruel lessons of war are fresh in every mind, it is fitting that we now undertake appropriate measures for the future security of the United States.
The times call for a broad and realistic appraisal of our military needs and obligations. This Nation, and the other members of the family of nations, are facing the hazardous transition to a peace economy in a world grown acutely sensitive to power.
We have charted the course to a stable world peace, but that course still remains to be sailed.
We must, of course, plan for the immediate needs of this year and the next. But we would break faith with those who won for us the victory, if we should fail at the same time to adopt an integrated and long-range program for the national security.
As a sovereign nation, we must continue to be ready to defend our national integrity by maintaining and manning adequate defense establishments within this continent, at the Panama Canal, and at all our bases overseas. As a member of the Security Council of the United Nations, we have an immediate obligation to bear a share, commensurate with our national standing, in safeguarding the future security of all peace-loving nations. As a victor in the greatest war of history, we are committed now to an armed occupation of the lands of our defeated enemies until it is assured that the principles for which we fought shall prevail in the reconstruction of those lands.
To meet these immediate obligations will require the maintenance for some time of a real measure of our present land, sea, and air power.
And in this first year after victory our people have another obligation, one which is felt in almost every American home. We owe it to those now in the armed forces that they be returned to civilian life with all possible speed.
To provide the personnel necessary to meet these immediate obligations we must obtain replacements for those veterans who have already rendered long and arduous service.
We shall make every effort to raise these replacements by recruiting volunteers. To that end I ask that the Congress consider ways and means to assure the maximum success of the recruiting campaigns which have already been authorized. I suggest that legislation be enacted to remove the present restriction on eligibility for voluntary enlistment and to allow the armed forces to enlist a larger number of volunteers than is now authorized. It is further recommended that, in order to enable the armed forces satisfactorily to compete in the procurement of personnel, the Congress provide suitable inducements for volunteer service in the Army and Navy.
However, in view of our extensive national commitments, I am certain, as are the War and Navy Departments, that we cannot rely on voluntary recruitment as the sole method of procuring the necessary replacements.
I, therefore, urge that the Congress continue inductions to assure replacements for these veterans, in such numbers as are not supplied by volunteers.
An unforgivable discrimination would result if, by suspending inductions now, we should favor those who have had no military service at the cost of requiring continued sacrifice from those who have already done their part.
Our first concern should be for those who have been in the armed forces for several years. They have been separated from their homes and from their loved ones. Many of them have been under constant fire and continuous danger for months and even years. We should try to avoid imposing further service upon them.
The only way that this can be done is to continue the induction of young men who as yet have not served a tour of active duty in the armed services. Only when we find that we are able to obtain a sufficient number of volunteers to fill the necessary quotas for our occupational needs, can we discontinue the Selective Service System.
Of course it is entirely up to the Congress to choose the means by which we will provide and maintain the necessary strength to meet our commitments. The alternatives presented are very simple. There are no offers. Either we retain men now in the service for a further indefinite period, or we provide replacements by further inductions.
As you know, I have already directed the Selective Service to cut down the number of inductions from 80,000 to 50,000 per month, and to limit them to the age group of 18 through 25.
It would seem reasonable to limit inductions hereafter to men between the ages of 18 and 25, inclusive, and fix their maximum term of service at two years.
Under the existing statute, inductees can be legally retained only for the duration of the war and a period of six months thereafter. I trust that, in any event, the Congress will not pass a resolution to the effect that the war has terminated for the purposes of this statute. To do so would give to all inducted men and temporary officers of the Army now on active duty the fight to civilian status, and would create an impossible demobilization situation.
These are the military steps which it is apparent must be taken at once to meet the needs of the transition from war to peace. First things necessarily come first.
But the full needs of our national security run far beyond this immediate period of transition. We should make timely preparations for the Nation's long-range security, while we are still mindful of what it has cost us in this war to have been unprepared.
It is, therefore, my intention to communicate with the Congress from time to time during the current session with respect to a comprehensive and continuous program of national security, including a universal training program, unification of the armed services, and the use and control of atomic energy.
II. HOUSING
The largest single opportunity for the rapid postwar expansion of private investment and employment lies in the field of housing, both urban and rural. The present shortage of decent homes and the enforced widespread use of substandard housing indicate vital unfulfilled needs of the Nation. These needs will become more marked as veterans begin to come back and look for places to live.
There is wide agreement that, over the next ten years, there should be built in the United States an average of from a million to a million and a half homes a year.
Such a program would provide an opportunity for private capital to invest from six to seven billion dollars annually. Private enterprise in this field could provide employment for several million workers each year. A housing program of this realistic size would, in turn, stimulate a vast amount of business and employment in industries which make house furnishings and equipment of every kind, and in the industries which supply the materials for them. It would provide an impetus for new products, and would develop new markets for a variety of manufactured articles to be made by private enterprise.
Housing is high on the list of matters calling for decisive Congressional action. This is reflected in recommendations contained in reports recently issued by the postwar committees of the Senate and of the House of Representatives. While differing opinions may be held as to detail, these proposals for action already developed in the Congress appear to me sound and essential.
I urgently recommend that the Congress, at an early date, enact broad and comprehensive housing legislation.
The cardinal principle underlying such legislation should be that house construction and financing for the overwhelming majority of our citizens should be done by private enterprise.
We should retain and improve upon the present excellent Government facilities which permit the savings of the people to be channeled voluntarily into private house construction on financing terms that will serve the needs of home owners of moderate income.
The present principles of insurance of housing investment--now tested by years of experience--should be retained and extended, so as to encourage direct investment in housing by private financing institutions.
The Government, in addition to providing these facilities to help private enterprise and private capital build homes, should take effective measures to stimulate research in methods and materials of housing construction. In this way, better and cheaper methods may be developed to build homes.
In addition to this type of research, the Government might well undertake to assist communities in making recurrent community studies in matters relating to housing and real estate generally. Such a program would contribute in great degree to the progress of private initiative and private capital investment in housing.
We must go on. We must widen our horizon even further. We must consider the redevelopment of large areas of the blighted and slum sections of our cities so that in the truly American way they may be remade to accommodate families not only of low-income groups as heretofore, but of every income group. We must make it possible for private enterprise to do the major part of this job. In most cases, it is now impossible for private enterprise to contemplate rebuilding slum areas without public assistance. The land cost generally is too high.
The time has come for the Government to begin to undertake a program of Federal aid to stimulate and promote the redevelopment of these deteriorating areas. Such Federal aid should be extended only to those communities which are willing to bear a fair part of the cost of clearing their blighted city areas and preparing them for redevelopment and rebuilding.
The rebuilding of these areas should conform to broad city plans, provide adequately for displaced families and make maximum use of private capital. Here lies another road toward establishing a better standard of city living, toward increasing business activity and providing jobs.
This Nation has recognized the need of using public funds to clear slums and to provide homes for those families who could not otherwise enjoy adequate housing because of the difference between their present earning power and the cost or rental of a decent home. We cannot, and we will not, recede from these purposes.
For those low-income groups, representing but a small portion of the total housing need, our prewar program of Federal aid to communities for low-rent housing should be resumed. Only in that way can we make progress toward our ultimate goal laid down in the economic bill of rights of a decent home for every American family.
I recommend, also, that we quicken our rate of progress in rural housing. As a general rule, housing conditions on farms and in rural areas are relatively worse than in our cities. In housing, as well as in other benefits of the American system, farm families should enjoy equality with city dwellers.
A decent standard of housing for all is one of the irreducible obligations of modern civilization. The housing challenge is now squarely before us. The people of the United States, so far ahead in wealth and productive capacity, deserve to be the best housed people in the world. We must begin to meet that challenge at once.
12. RESEARCH
Progress in scientific research and development is an indispensable condition to the future welfare and security of the Nation. The events of the past few years are both proof and prophecy of what science can do.
Science in this war has worked through thousands of men and women who labored selflessly and, for the most part, anonymously in the laboratories, pilot plants, and proving grounds of the Nation.
Through them, science, always pushing forward the frontiers of knowledge, forged the new weapons that shortened the war.
Progress in science cannot depend alone upon brilliant inspiration or sudden flights of genius. We have recently had a dramatic demonstration of this truth. In peace and in war, progress comes slowly in small new bits, from the unremitting day-by-day labors of thousands of men and women.
No nation can maintain a position of leadership in the world of today unless it develops to the full its scientific and technological resources. No government adequately meets its responsibilities unless it generously and intelligently supports and encourages the work of science in university, industry, and in its own laboratories.
During the war we have learned much about the methods of organizing science, and about the ways of encouraging and supporting its activities.
The development of atomic energy is a clear-cut indication of what can be accomplished by our universities, industry, and Government working together. Vast scientific fields remain to be conquered in the same way.
In order to derive the full profit in the future from what we have learned, I urge upon the Congress the early adoption of legislation for the establishment of a single Federal research agency which would discharge the following functions:
1. Promote and support fundamental research and development projects in all matters pertaining to the defense and security of the Nation.
2. Promote and support research in the basic sciences and in the social sciences.
3. Promote and support research in medicine, public health, and allied fields.
4. Provide financial assistance in the form of scholarships and grants for young men and women of proved scientific ability.
5. Coordinate and control diverse scientific activities now conducted by the several departments and agencies of the Federal Government.
6. Make fully, freely, and publicly available to commerce, industry, agriculture, and academic institutions, the fruits of research financed by Federal funds.
Scientific knowledge and scientific research are a complex and interrelated structure. Technological advances in one field may have great significance for another apparently unrelated. Accordingly, I urge upon the Congress the desirability of centralizing these functions in a single agency.
Although science can be coordinated and encouraged, it cannot be dictated to or regimented. Science cannot progress unless rounded on the free intelligence of the scientist. I stress the fact that the Federal research agency here proposed should in no way impair that freedom.
Even if the Congress promptly adopts the legislation I have recommended, some months must elapse before the newly established agency could commence its operations. To fill what I hope will be only a temporary gap, I have asked the Office of Scientific Research and Development and the Research Board for National Security to continue their work.
Our economic and industrial strength, the physical well-being of our people, the achievement of full employment and full production, the future of our security, and the preservation of our principles will be determined by the extent to which we give full and sincere support to the works of science.
It is with these works that we can build the highroads to the future.
13. TRANSITION TAX REVISION
Taxes will play a vital role in attaining a prosperous peace.
I recommend that a transitional tax bill be enacted as soon as possible to provide limited tax reductions for the calendar year 1946. Like the Tax Adjustment Act of 1945, the new bill should aim principally at removing barriers to speedy reconversion and to the expansion of our peacetime economy.
This matter has been under study jointly by congressional and Treasury tax staffs. I am assured that a program will be ready for early consideration by the Congress.
We must reconcile ourselves to the fact that room for tax reduction at this time is limited. A total war effort cannot be liquidated overnight.
It is estimated that war expenditures in the current fiscal year will drop 40 billion dollars below last year, but that they will still amount to 50 billion dollars out of total expenditures of 66 billion dollars. With current receipts estimated at 36 billion dollars, we face an estimated deficit of 30 billion dollars in the current fiscal year. Expenditures, although further reduced, will necessarily continue at high levels in the fiscal year 1947.
In considering tax reductions for 1946 we must not lose sight of the budgetary situation and our obligations to 85,000,000 bondholders.
After passage of the transitional bill, I hope that the Congress will give careful consideration to the modernization of the Federal tax structure. A major objective of this modernization should be the encouragement of business incentives and expansion, and of consumer purchasing power. In this connection consideration of further tax reductions should have due regard to the level of governmental expenditures and the health and stability of our economy.
14. SURPLUS-PROPERTY DISPOSAL
On July 17 I recommended that the Congress enact legislation creating a single Surplus Property Administrator in place of the board of three which was provided in the statute enacted last year.
I realize that this recommendation came too late to be dealt with prior to your recess, but I strongly urge that you act on it now.
A single administrator can do much to obviate the confusion which still exists in this field, and will be able to expedite the disposal of the many billions of dollars of surplus property.
The disposition of plants and equipment is of particular urgency. They should be disposed of promptly by sale or lease on a basis that is fair to the Government and to industry. Our objectives should be to provide early and continuous employment, and through private production, to supply hungry markets and check inflationary tendencies. Leases may often enable the Government and the operator to determine actual value by actual experience. The sooner we can put plants and equipment to work, the sooner we can discard our wartime controls in the transition from war to peace.
15. SMALL BUSINESS
During the war special attention was paid to small business. The American small business is the backbone of our free-enterprise system. The efforts of the Congress in protecting small business during the war paid high dividends, not only in protecting small business enterprise, but also in speeding victory. In spite of the fact, however, that many businesses were helped and saved, it is true that many thousands of them were obliged to close up because of lack of materials or manpower or inability to get into war production.
It is very important to the economy of the United States that these small businesses and many more of them be given opportunity to become a part of American trade and industry. To do this, assistance should be given to small businesses to enable them to obtain adequate materials, private financing, technological improvements, and surplus property.
While some special facilities for small business are required, the greatest help to it will come from the maintenance of general prosperity and full employment. It is much more difficult for small business to survive the hazards which come from trade recessions and widespread unemployment. What small business needs chiefly is a steady supply of customers with stable purchasing power.
I am sure that the Congress will see to it that in its legislation adequate protection and encouragement will be given to the small business of the Nation.
16. VETERANS
It has been a fundamental objective of the Congress and of the administration to make generous provision for those who have served the Nation in its armed forces, and for the dependents of those who have died in their country's cause.
Although a full list of what has been done toward this objective would be entirely too long to enumerate here, it might be well to list some of the major steps already taken:
(1) Adoption of a National Service Life Insurance Act under which about 17 1/2 million insurance applications have been approved, resulting in insurance coverage of more than $135,000,000,000.
(2) Provision of increased compensation or pension for disabled veterans.
(3) Extension and expansion of hospital benefits.
(4) Vocational education and training for veterans having a service-connected disability constituting a vocational handicap.
(5) Mustering-out pay ranging from $100 to $300 dependent upon length of service and rate of pay.
(6) Education or training for any veteran whose education or training was interrupted by entrance into the service.
(7) Guarantee of loans to veterans for the purchase of a home, a farm, or a business.
(8) Legislation to protect the veteran's right to reemployment in his preservice job, if desired.
(9) Provision of unemployment allowances for veterans who become unemployed at any time within two years after discharge, of $20 per week for not to exceed 52 weeks.
(10) Civil-service laws to insure preference to veterans in governmental service.
(11) There has also been instituted in each State pursuant to law an efficient system whereby the counseling and placement needs of veterans will be the responsibility of veterans appointed for that special work.
The transition of veterans from military to civilian activities cannot be accomplished satisfactorily by the Federal Government alone or the States alone, or, indeed, by both. Government can help chiefly through organization and over-all planning. But the real work must be done in each community, through cooperation of the industrial, labor, and civic organizations interested in the welfare of the community and of the veterans.
There have been established information centers in all the field activities of the Selective Service System, United States Employment Service, and Veterans Administration totaling more than 8,000. Veterans may there obtain information on any question of interest to them.
Also, the Retraining and Reemployment Administration in cooperation with the leadership of local communities has established approximately 1,450 community information centers. There are therefore 9,000 information centers of all types throughout the country available to veterans for information purposes. With respect to agricultural interests, use has been made of county committees.
Broad and generous as this legislation for veterans has been, there will be need of amendments and improvements. I recommend that the Congress give prompt consideration to the recommendations which have been made by the Veterans Administration for the purpose of clarifying and liberalizing the provisions relative to hospital and medical care, to vocational training under the Vocational Rehabilitation Act, and to education and training under the Servicemen's Readjustment Act. I also urge consideration of the suggestions made by the Veterans Administration with respect to the loan guarantee features of the latter Act, to amendments clarifying and liberalizing the National Service Life Insurance Act, and those which would increase the rates of compensation for specific injuries including multiple amputations.
I have recommended that the Selective Training and Service Act be continued; but if the Congress determines to the contrary, I urgently recommend that it clarify the provisions thereof which specifically deal with the right of reemployment.
Favorable consideration should be given by the Congress to Federal reclamation projects as outstanding opportunities for returning veterans. The great Columbia Basin project in the Northwest, the projects in the Missouri River Basin, and others of equal significance will bring into existence many thousands of new family-size farms upon which returning veterans can secure a livelihood for themselves and their families and create new wealth for the Nation. A number of farms can be made ready for veterans rapidly if legislation now pending is enacted without delay. This legislation would authorize necessary and proper assistance to veterans who seek to develop farm homes on irrigated lands in Federal reclamation project areas.
I also recommend that the Congress expedite legislation giving veterans social-security coverage credit for the period of their service in the armed services.
The latest available statistics in the Veterans' Administration shows that pension payments in varying amounts are now going forward each month to approximately 600,000 veterans of World War II and to the dependents of more than 100,000 deceased veterans of World War II.
Insurance claims under the National Service Life Insurance Act have been allowed in a total of 361,000 cases involving insurance of approximately 2 1/2 billion dollars.
More than 200,000 World War II veterans have already been afforded hospital care in Veterans Administration facilities.
At the time of Pearl Harbor, the Veterans Administration and the Federal Board of Hospitalization had under way a hospital-building program which by 1949, the estimated peak of needs for World War I veterans, would have provided a total of 100,000 beds for hospital and domiciliary care. Since Pearl Harbor the hospital-building program has been expedited.
The Veterans Administration now has approximately 82,000 hospital and 14,000 domiciliary beds. Thirteen thousand beds are now under construction, and funds are available for 15,000 more.
The Servicemen's Readjustment Act authorizes appropriations to the extent of $500,000,000 for the construction of veterans' hospitals and also the transfer to the Veterans Administration of suitable facilities of the Army and Navy after the end of the war, when surplus to their needs. The program of the Veterans Administration and the Federal Board of Hospitalization contemplates keeping abreast of developing needs through such transfers and additional construction. To this end a plan has just been approved for construction of 29,000 additional beds.
Since World War I there have been more than 3,000,000 hospital admissions in veterans' facilities--and most of them since 1925. Considering that the total number of veterans of World War I and all living veterans of prior wars did not exceed one-third the number of the veterans of World War II, it can readily be seen how important it is to provide hospital privilege. The subject is one which should receive the most careful consideration from the point of view of the extent and quality of facilities to be provided and maintained.
In the last analysis, if we can insure the proper economic conditions, we may be sure that the genius and initiative of Americans who met successfully all demands of the greatest war in history, both on the fighting front and on the production front, will make certain the reintegration of veterans into an expanding civilian economy. Anything less would not meet the country's obligations to its veterans.
17. PUBLIC WORKS AND NATIONAL RESOURCES
During the war years we have expended our resources--both human and natural--without stint. We have thrown into the battle for freedom everything we had.
Thousands of our finest young men--our best human resources-have given their lives. Additional thousands have been injured so that they may not be able to realize their full promise. The education of millions of young men and young women has been disrupted. At best, the Nation will be deprived of the full benefit of their services as scientists, doctors, technicians, lawyers, and educators for 3 to 5 years, or even longer, while they complete the preparation which the necessities of war interrupted.
The depletion of our natural resources is even more startling. We have torn from the earth copper, petroleum, iron ore, tungsten, and every other mineral required to fight a war, without regard to our future supplies. We have taken what we needed. We were not able to, and we did not, take account of tomorrow.
At the same time, our splendid prewar program to build up our national resources was sharply halted. The diligent and constant search for additional deposits of minerals was almost abandoned in favor of a frantic effort to discover and make possible the production of the materials of war.
The long-range programs to conserve the precious inches of topsoil which, in many parts of the country, lie between plenty and poverty were necessarily interrupted. We had neither the manpower nor the materials to spare for projects to prevent the ravages of floods which constantly despoil our land. We had neither the men nor the facilities to continue a large-scale program of reclaiming land and of bringing new land into cultivation.
With a few exceptions, we were forced to suspend the program to which this Nation is committed of harnessing the waters of our great rivers so that they may become vehicles of commerce, beneficent producers of cheap electric power, and servants of the Nation instead of instruments of destruction.
In brief, although during this war this Nation has reached the apex of its power--a peak of greatness and might which the world had never seen--our national capital account has greatly suffered. We must proceed with all possible diligence not merely to restore these depleted resources to their prewar standards but to make them greater and richer than ever before.
We must make a diligent effort to discover new deposits of the precious and indispensable minerals upon which our national life is rounded.
We must develop for the use of industry new technologies so that the vast deposits of low-grade ores that have not heretofore been considered usable may be put to work for the good of all of us.
We should build and improve our roads--the arteries of commerce; we must harness our streams for the general welfare; we must rebuild and reclaim our land; we must protect and restore our forests.
This is not only to provide men and women with work, it is to assure to the Nation the very basis of its life. It is to play the part of a good businessman who insists carefully on maintaining and rebuilding his plant and machinery.
We know that by the investment of Federal funds we can, within the limits of our own Nation, provide for our citizens new frontiers-new territories for the development of industry, agriculture, and commerce.
We have before us the example of the Tennessee Valley Authority, which has inspired regional resource development throughout the entire world.
We know that we have programs, carefully considered and extensively debated, for regional development of the Columbia River in the great Northwest, the Missouri River, the Central Valley of California, and the Arkansas River.
In the Columbia Valley the first major step has been completed for the reclamation of barren land and the production of enormous quantities of power. The waters of the Missouri and the Arkansas and the rivers of California can be put to work to serve the national interest in a similar fashion.
If these rivers remain scourges of our Nation, it is only because we do not have the prudence to harness them for the benefit of our people. If there are among us for any period of time farmers who do not farm because there is no suitable land available to them; workers who do not work because there is no labor for their hands, we have only ourselves to blame so long as we fail to make available to them the opportunities before our very eyes.
I hope that the Congress will proceed as rapidly as possible to authorize regional development of the natural resources of our great river valleys.
It should be unnecessary to say that the conservation and development of the national plant must proceed according to an intelligent and coordinated design. The watersheds of this Nation are not utterly independent, one of the other; our irreplaceable wealth of minerals, land, and timber is not composed of segments which can effectively be dealt with separately. Any program of public works must have as its unifying purpose the greatest possible contribution to the wealth of the Nation and to the wealth-producing capability of the Nation.
It is necessary that we proceed as speedily as possible to set up machinery to make an inventory of our national wealth and our basic resources, and to test the suitability of plans and proposals for public works in light of this purpose. An agency of this sort could provide us with consistent direction toward the goal of rehabilitation and improvement of our basic national resources.
Shortages of materials and manpower made it necessary in the interests of the war effort to suspend many public works which might otherwise have been undertaken. Now that materials and manpower will become more plentiful, we should be prepared to undertake a program of useful public works, not only to improve the physical plant of the United States but to provide employment to great masses of our citizens when private industry cannot do so. Only such public works should now be undertaken, however, as will not compete with the use of materials and manpower by private industry. Plans for other public works should be perfected and put in reserve.
In this connection I have several recommendations:
(1) During the war the construction of Federal public works has been restricted to those necessary for national defense and the prosecution of the war. Projects which normally would have been constructed were deferred, and a large backlog of needed construction has accumulated. Plans for some of these projects--specifically those relating to reclamation, rivers and harbors, flood control, and the conservation of our natural resources--are now ready, and their construction can go forward when funds are provided and materials and manpower are available without competing with private industry. Plans for other Federal projects are being prepared through the use of funds wisely appropriated by the Congress for advance preparation. Additional funds are needed for this purpose, and I urge that the Congress provide them.
(2) I recommend that the Congress enact legislation authorizing additional construction of certain Federal buildings. A portion of this program has already been authorized but has been held up by reason of cost limits imposed upon the buildings which cannot now be met because of increased needs and costs.
(3) I recommend that the Congress release the funds for the highway program authorized under the Federal Aid Highway Act of 1944 (Public Law 521, 78th Cong.). Under this act $500,000,000 has been authorized for the first year and $500,000,000 for each of the two succeeding years, making a total authorization of 1 1/2 billion. With the States' share of the cost included, this would provide a total highway construction program of $3,000,000,000 for a 3-year period.
(4) I recommend that the Congress appropriate $25,000,000 to continue the construction of the Inter-American Highway through the Central American Republics to the Canal Zone.
(5) I recommend that the Congress enact legislation to provide the necessary airports and airport facilities to serve the great needs of an expanded postwar air transportation and commerce. A well-planned airport program would improve transportation, amplify the usefulness of the airplane, and contribute to a healthy aircraft manufacturing industry.
The Congress now has before it a survey of the present and future needs for airports in the United States prepared by the Secretary of Commerce. This report indicates the necessity for approximately 3,000 new airports and for improvements to more than half of the existing 3,000 airports. The report recommends that the program be spread over a period of 10 years and that the cost be shared equally between Federal and non-Federal governmental agencies. I recommend passage of appropriate legislation to implement this program.
(6) States and local governments should be encouraged to construct useful public works of the types that must necessarily supplement and go along with the private construction of homes and industrial facilities. If private construction is to move forward at a rapid rate, it is vitally important that local governments promptly proceed with the construction of such facilities as streets, sewers, water supply, hospitals, airports, schools, and other necessary public facilities. Such projects should be undertaken at this time where they supplement and encourage private construction, not where they compete with it for manpower and materials.
The Congress has already authorized under title V of the War Mobilization and Reconversion Act of 1944 appropriations for advances of Federal funds to State and local governments to assist them in the preparation of detailed drawings and specifications for their public works. The appropriation thus far made is entirely inadequate and I shall request additional funds in order to speed up this important activity during the reconversion period.
The majority of State and local governments are awaiting a decision concerning Federal assistance. In order to get needed public facilities started promptly which do not compete with private construction, I recommend that the Congress give early consideration to grants for such public works under conditions that will insure that each level of government, Federal, State, and local, shall make its appropriate contribution.
(7) The Congress has also been giving consideration to legislation with respect to the construction of hospitals and health centers throughout the country. During the war the Government, through the Federal Works Agency and the Public Health Service, has assisted State and local governments and nonprofit organizations in the construction of such facilities. The beneficial results of this program are well known. The Federal Government must continue to recognize its obligation to maintain and improve the health of the Nation by providing Federal grants where necessary for the construction of hospital and health centers.
Programs of internal improvements of a public character--Federal, State, and local--must preserve competitive bidding, guarantee collective bargaining and good wages for labor, utilize the skills of our returned veterans to the fullest extent, and effectively prevent discrimination because of race, creed, or color.
18. LEND-LEASE AND POSTWAR RECONSTRUCTION
With the arrival of VJ-day lend-lease aid has practically come to an end. It was always understood that it would come to an end at that time. Immediately after Japan accepted the terms of unconditional surrender, I instructed the Foreign Economic Administrator to advise promptly all governments that deliveries of supplies under lend-lease would cease on VJ-day.
I also directed the Administrator in advance of the actual termination of lend-lease deliveries on VJ-day to enter into immediate negotiations with the receiving governments for the purchase of all goods in the pipe line or in storage. These negotiations are proceeding satisfactorily.
In due time we must consider the settlement of the lend-lease obligations which have been incurred during the course of the war. We must recognize that it will not be possible for our Allies to pay us dollars for the overwhelming portion of the lend-lease obligations which they have incurred. But this does not mean that all lend-lease obligations are to be canceled. We shall seek under the procedure prescribed in the Lend-Lease Act and in subsequent agreements with other governments to achieve settlements of our wartime lend-lease relations which will permit generally a sound world-wide economy and will contribute to international peace and our own national security.
We must turn from economic cooperation in war to economic cooperation in peace. We have taken steps to carry out the Bretton Woods proposals for an international monetary fund and an International Bank. We are preparing to extend the operations of the Export-Import Bank. Our objective is to enable the peace-loving nations of the world to become self-supporting in a world of expanding freedom and rising standards of living.
Further legislation is also necessary. If we are to avoid the maintenance of governmental monopoly of international credit, the Johnson Act must be repealed. Private loans on a sane basis are an essential adjunct to the operations of the Export-Import and International Bank operations.
I am directing the executive agencies to give full weight to foreign requirements in determining the need for maintaining domestic and export controls and priorities.
We have already solemnly stated that we will do all that is reasonably possible to help war-torn countries to get back on their feet. I am sure that the Congress will wish the Government to live up to that pledge.
Further legislative action is needed in connection with the United Nations Relief and Rehabilitation Administration. I recommend that the Congress fulfill the commitment already made by appropriating the remaining $550,000,000 granted by the Congress for United States participation.
The Council Meeting of the United Nations Relief and Rehabilitation Administration has just been brought to a successful conclusion. At that meeting our delegate found the need for an additional contribution from all participating countries, to enable the United Nations Relief and Rehabilitation Administration to complete its work in Europe and Asia. On his motion, the Council voted to recommend to member countries a further contribution. Our own share will amount to approximately $1,350,000,000. I am confident that you will find this request for an additional authorization and appropriation fully justified, and I ask for prompt examination and consideration of the request.
In meeting the needs of the United Nations Relief and Rehabilitation Administration, surplus military and lend-lease goods will be used to the fullest possible extent.
Finally, I foresee the need for additional interim lending power to insure a rapid and successful transition to peacetime world trade. Appropriate recommendations will be made to the Congress on this matter when we have completed the exploratory conversations already begun with our associates. We wish to maintain the flow of supplies without interruption. Accordingly, I have directed the executive agencies to complete their conversations and studies at the earliest possible moment. I ask the Congress for speedy consideration of the recommendations when they are made.
19. CONGRESSIONAL SALARIES
Now that restrictions on voluntary salary increases have been removed, I hope that the Congress will take action soon on the salaries of its Members.
My experience as a Member of the Senate has given me a very keen appreciation of the quantity and quality of the work of the Members of the Congress. They are called upon to carry great responsibility and make important decisions in a multitude of matters involving the welfare of the Nation and of the world. Their tasks continue day in and day out. They have increased in number and in importance year by year.
There is no doubt in the mind of any thinking American that Members of the Congress are grossly underpaid and have been for many years. I think that they are entitled--and have already so expressed myself--to a salary anywhere from fifteen to twenty-five thousand dollars a year. I recommend that the Congress enact legislation providing that the salaries of its Members be increased to twenty thousand dollars per year.
At the same time I recommend the repeal of the provision now applicable to the House of Representatives for an additional expense allowance. There should be a straight, out-and-out salary increase for all Members. We should make service in the Congress of the United States available without hardship to ordinary citizens who have to look to the salary for their sole support. I also recommend that an adequate retirement system should be provided for the Members of the Congress who have served for a long period of years.
This should be the first step in creating a decent salary scale for all Federal Government employees--executive, legislative, and judicial.
The most important impediment to obtaining efficient administrative officials in the Federal Government has been the pitiful wage scale. During the war many able and experienced men were obtained for Federal service on purely patriotic grounds. Some of these men who are unable to continue at the present salary scales would be willing to remain at adequate salaries.
In most of the various classifications of Federal employees, the wage scales, with few exceptions, are obsolete and inadequate. This is particularly true of the Federal judiciary.
I sincerely hope that the Congress will take early steps to provide decent wage scales for its Members and for the executive and judicial branches of the Government.
20. SALE OF SHIPS
Prompt resumption of the normal operation of our merchant marine to expedite the reestablishment of our foreign trade is a major part of general reconversion from a wartime to a peacetime economy. The Maritime Commission has already received numerous inquiries and applications from potential purchasers of ships at home and abroad for private ownership and operation.
It is recommended that suitable legislation to permit such sales be expedited so that the uncertainty about the disposal of our large surplus tonnage may be removed. In this way, American shipping companies may undertake commercial operation as rapidly as ships can be released from Government control, and the foreign market can also be used for selling those vessels which are in excess of the needs of our postwar American merchant marine and national defense.
21. STOCK PILING OF STRATEGIC MATERIAL
One of the costliest lessons of our unpreparedness for this war was the great danger involved in depending upon foreign sources for supplies of raw materials necessary in times of national emergency. The United States should never again permit itself to be placed in a position where its defense may be jeopardized by the fact that it has been cut off from the source of strategic raw materials.
I recommend that the Congress enact legislation to bring about the acquisition and retention of stock piles of materials in which we are naturally deficient but which are necessary to supply the needs of the Nation for its defense.
I shall shortly communicate with the Congress recommending a national health program to provide adequate medical care for all Americans and to protect them from financial loss and hardships resulting from illness and accident. I shall also communicate with the Congress with respect to expanding our social-security system, and improving our program of education for our citizens.
In this hour of victory over our enemies abroad, let us now resolve to use all our efforts and energies to build a better life here at home and a better world for generations to come.
The Congress has played its full part in shaping the domestic and foreign policies which have won this victory and started us on the road to lasting peace.
The Congress, I know, will continue to play its patriotic part in the difficult years ahead. We face the future together with confidence-that the job, the full job, can and will be done.
HARRY S. TRUMAN
To the Congress of the United States:
I regret that you have been compelled to cut short your recess period. I know, however, that you have been just as eager as any of us to meet the problems which naturally have crowded down upon us with the surrender of the Japanese.
You have cut short a well-merited vacation in order to do so. I hope that the American people realize as fully as I do, that from the very first days of the emergency, the Congress has most energetically and patriotically devoted its time, energies, and capabilities to the immediate problems of war and to the long-range problems of peace. The legislative branch of the Government is entitled to its full share of credit and glory for the victory of the Allied armies. I wish to take this opportunity on behalf of the Nation to congratulate you on the great victory which has been won--in which you played so important a part.
The Congress reconvenes at a time of great emergency. It is an emergency about which, however, we need have no undue fear if we exercise the same energy, foresight, and wisdom as we did in carrying on the war and winning this victory.
The sudden surrender of the Japanese has not caught us unawares. President Roosevelt, as early as the Fall of 1943, began to set up machinery which he foresaw would become necessary to meet the reconversion period. The Congress in its wisdom has adopted some of that machinery by statute, and has improved and added to it. As a result, Government agencies, for some time, have been able to plan for the immediate and long-range steps which now have to be taken.
As the Congress has undoubtedly noticed, many steps were taken immediately after the surrender of the Japanese. Many more have been taken since.
The process of reconversion will be a complicated and difficult one. The general line of approach to the problem is to achieve as full peacetime production and employment as possible in the most efficient and speedy manner. The following policies have been laid down and will be followed:
(1) Demobilize as soon as possible the armed forces no longer needed.
(2) Cancel and settle war contracts as quickly as possible.
(3) Clear the war plants so as to permit contractors to proceed with peacetime production.
(4) Hold the line on prices and rents until fair competition can operate to prevent inflation and undue hardship on consumers.
(5) Hold wages in line where their increase would cause inflationary price rises. Where price ceilings would not be endangered, collective bargaining should be restored.
(6) Remove all possible wartime government controls in order to speed and encourage reconversion and expansion.
(7) Keep only those controls which are necessary to help reconversion and expansion by preventing bottlenecks, shortages of material, and inflation.
(8) Prevent rapid decrease of wage incomes or purchasing power.
The major objective, of course, is to reestablish an expanded peacetime industry, trade, and agriculture, and to do it as quickly as possible.
Obviously during this process there will be a great deal of inevitable unemployment. What we must do is to assist industry to reconvert to peacetime production as quickly and effectively as possible so that the number of unemployed will be swiftly and substantially reduced as industry and business and agriculture get into high production.
The Government is now doing what it can to hurry this reconversion process.
Through contract termination procedures it is providing quick payment to contractors.
It has released controls on practically all materials which are necessary for peacetime production, reserving only those few in which there is still a critical shortage.
It has made arrangements for credit facilities for industry.
By plant and surplus property disposal, it is helping private enterprise to get started again.
In the consumer field the Government has released controls over articles which were needed for the war in such large quantities that civilians had to go without.
For the information of the Congress, I am submitting as an appendix to this message a report by the Director of War Mobilization and Reconversion showing what has already been done by the Federal Government in reconversion.1
1Mr. Snyder's report, dated September 4, 1945, and entitled "The Transition: Phase One," is printed with the message in House Document 282 (79th Cong., 1st sess.).
There is much that the Congress can do to help this process and to tide over the period between now and the time when reconversion is completed and civilian jobs are plentiful in a stable economy that provides full production, full employment, and a high standard of living.
I. UNEMPLOYMENT COMPENSATION
The end of the war came more swiftly than most of us anticipated. Widespread cut-backs in war orders followed promptly. As a result, there has already been a considerable number of workers who are between jobs as war industries convert to peace. Other workers are returning to a 40-hour week and are faced with a corresponding reduction in take-home pay.
This has led to a natural feeling of uneasiness among the rank and file of our people. Let me emphasize that there will be no reason for undue timidity. A vast backlog of orders may soon make possible the greatest peacetime industrial activity that we have ever seen. But this can happen only if the Congress and the administration move vigorously and courageously to deal with the economic problems which peace has created. Then there need be no reason to fear either the immediate future or the years that lie ahead of us.
Determined action now will create the atmosphere of confidence which is so vital to a rapid reconversion with a minimum of unemployment and hardship.
No matter how rapidly reconversion proceeds, however, no amount of effort or planning will be able immediately to provide a job for everyone displaced from war work. Obviously, displaced war workers cannot find jobs until industry has been regeared and made ready to produce peacetime goods. During this lag the Government should provide help. The cost of this transition from war to peace is as much a part of the cost of war as the transition from peace to war--and we should so consider it.
This course is recommended not only as a matter of justice and humanity, but also as a matter of sound business. Nothing would be more harmful to our economy than to have every displaced war worker stop buying consumer goods. And nothing would be more conducive to a large-scale cessation of buying than the feeling on the part of displaced war workers that all their income had stopped and that their remaining financial resources had to be hoarded.
For one group of those who may become unemployed in the near future--the demobilized veterans--the Congress has already made special provision. Any veteran who has satisfactorily completed 90 days of service is now entitled by law to a weekly unemployment allowance of $20 for as much as 52 weeks depending on the length of his service.
By contrast, there are more than 15,000,000 workers not protected under our present unemployment insurance laws. There are many millions more for whom protection is inadequate. Many of these have been unable to accumulate adequate savings.
On May 28, 1945, I recommended to the Congress that the Federal Government immediately supplement the unemployment insurance benefits now provided by the several States. That is the only feasible way to provide at least a subsistence payment in all parts of the United States during this coming unemployment period.
As I pointed out then, the existing State laws relative to unemployment insurance are inadequate in three respects:
(1) Only about 30,000,000 of our 43,000,000 nonagricultural workers are protected by unemployment insurance. Federal Government employees, for example, such as Federal shipyard and arsenal workers, are not covered. Nor are employees of small businesses and small industrial establishments. Nor are the officers and men of the merchant marine who have braved enemy torpedoes and bombs to deliver supplies and the implements of war to our armed services and our allies.
(2) The weekly benefit payments under many of the State laws are now far too low to provide subsistence and purchasing power for the workers and their families. Almost half of the States have the clearly inadequate maximum of $15 to $18 a week.
(3) Many of the States pay benefits for too short a period. In more than one-third of the States, for example, 18 weeks is the maximum.
I recommended then, and I urgently renew my recommendation now, that the Congress take immediate action to make good these deficiencies for the present emergency period of reconversion.
Specifically, coverage should be extended to include Federal employees, maritime workers, and other workers not now insured. This additional compensation during the present emergency will have to be financed entirely by the Federal Government, but the benefits should appropriately be administered by the States.
I also recommended, and I now repeat that recommendation, that the Congress provide, through supplementary Federal emergency benefit payments, additional unemployment benefits so as to bring them up to adequate standards in all the States. All payments, however, should be made through the existing unemployment compensation machinery of the several States.
During this emergency every eligible worker should be entitled to 26 weeks of unemployment benefits in any one year. The maximum weekly payment for those workers whose previous earnings were high enough, should be not less than $25 per week.
If the Congress decides to take this very necessary step, it will also wish to reconsider and increase the unemployment allowance provided for veterans.
There has been so much misrepresentation about this temporary proposal that I think I should categorically state what the bill does not do.
It does not give everyone $25 a week. Under it, an applicant must be ready, willing, and able to work and must have earned wages high enough so that the percentage rate will yield this maximum figure.
It does not federalize the unemployment compensation system. It leaves it with the States.
It is not intended to take the place of the permanent amendments to the unemployment compensation system which are now being studied by the Congress. It is an emergency measure designed to expand the present system without changing its principles. It is designed only to meet the immediate pressing human problems of reconversion.
This recommendation is not to be confused with the broader question of extending, expanding, and improving our entire social security program of which unemployment insurance is only a part. I expect to communicate with the Congress on this subject at a later date. But I sincerely urge that we do not wait for consideration of such a complex question before enacting this much needed emergency legislation.
2. FAIR LABOR STANDARDS ACT
In addition to those workers who will temporarily lose their jobs, there will be millions of others whose incomes will fall sharply with the end of war production. These will be added to the several million wage earners who even now have hourly earnings much below what is necessary for a decent standard of living.
The inadequacy of these wages, in many cases, has been temporarily concealed by wartime increases in take-home pay resulting from overtime work. As these props to income are removed, however, low wage earners will be hard pressed to feed, clothe, and house their families. This flies in the face of a sound public policy. Failure to correct this situation will slow down, if it will not actually stop, our drive toward an expanding market for business and agriculture.
The foundations of a healthy national economy cannot be secure so long as any large section of our working people receive substandard wages. The existence of substandard wage levels sharply curtails the national purchasing power and narrows the market for the products of our farms and factories.
In the Fair Labor Standards Act of 1938, the Congress adopted a program intended to provide a minimum wage standard for a large number of American workers.
In that statute, the Congress declared it to be our national policy to eliminate, from interstate industry, wage levels detrimental to the maintenance of minimum standards of living. The establishment then of a minimum wage of 25 cents per hour represented a first step toward the realization of that policy. The goal of 40 cents per hour, which under the act was to be made effective by 1945, was actually made fully effective more than a year ago by the voluntary action of the industry committees.
I believed that the goal of a 40 cent minimum was inadequate when established. It has now become obsolete.
Increases in the cost of living since 1938 and changes in our national wage structure, require an immediate and substantial upward revision of this minimum. Only in that way can the objectives of the Fair Labor Standards Act be realized, the national purchasing power protected, and an economy of full production and abundance preserved and maintained for the American people.
The high prosperity which we seek in the postwar years will not be meaningful for all our people if any large proportion of our industrial wage earners receive wages as low as the minimum now sanctioned by the Fair Labor Standards Act.
I therefore recommend that the Congress amend the Fair Labor Standards Act by substantially increasing the minimum wage specified therein to a level which will eliminate substandards of living, and assure the maintenance of the health, efficiency, and general well-being of workers.
The scope of the Fair Labor Standards Act also should be clarified and extended. In view of changes which have occurred since 1938, I believe it is no longer necessary to exclude from the minimum wage program the large number of workers engaged in agricultural processing who are now excluded. There now exists a twilight zone in which some workers are covered, and others, doing similar work, are not. Extension of coverage would benefit both workers and employers by removing competitive inequities.
Our achievements in this field during the last seven years of establishing minimum wages have been gratifying; but we must continue to move forward, step by step.
I urge that the Congress act promptly. The wage structure on which businessmen may make future plans should be settled quickly.
3. WARTIME CONTROLS
One of the outstanding achievements of the war has been the success of the Government in holding the line against inflation. This is the first time in any major war that the United States has been able substantially to stabilize its economy.
That fact now permits us to enter into the difficult period of readjustment without the threat of a disastrous price collapse.
For this result much credit is due to the Congress, which in the face of great insistence from many interested pressure groups refused steadfastly to take the easy way.
Great credit is due to the Office of Economic Stabilization, the War Labor Board, the Office of Price Administration, the War Food Administration, the War Production Board, and the other stabilization agencies. Despite great pressure and often unjust abuse, they continued to hold the line for the benefit of the great mass of Americans.
And above all, great credit is due to the people of the United States, the great body of average citizens, who, for four difficult years and with only a few exceptions, subordinated their personal interest to the long-range interest of the Nation as a whole.
Many of the demands of the war for commodities have now decreased. They will decrease further during the initial period of unemployment which will come with the cancellation of war contracts. As a result, prices of some commodities are bound to soften. But if that happens in the next few months, we cannot allow ourselves to be misled. We must keep in mind the experience of the period immediately after the first World War. After a lull of a few months following the Armistice of 1918, prices turned upward, scrambling for inventories started, and prices soon got completely out of hand. We found ourselves in one of the worst inflations in our history, culminating in the crash of 1920 and the disastrous deflation of 1920 and 1921.
We must be sure this time not to repeat that bitter mistake. When reconversion really gets under way, and men go back to work, and payrolls increase, and the pent-up demands of the war years at home and abroad for peacetime products begin to make themselves felt, we shall face the same scramble for goods, the same speculative excesses that developed in 1919. We must be in a position to overcome that danger if we expect to achieve an orderly transition to peacetime levels of full production and full employment. However, we must not allow inflationary dangers to obscure our vision of the possibilities of lower incomes and widespread unemployment. Our policy must guard against both contingencies.
Immediately after the Japanese decision to surrender, the Office of Price Administration moved promptly to eliminate rationing on gasoline, fuel oil, stoves, and processed foods.
During the transition period the Price Administrator, of course, will eliminate rationing and price controls on one commodity after another just as soon as supply comes into balance with demand. At the same time he will make whatever price adjustments are required to facilitate rapid reconversion and reemployment.
However, it will be necessary for him to continue to resist unreasonable pressures for higher prices on some commodities, just as he has resisted them all through the war. In resisting these pressures and in carrying out his difficult responsibilities, I must state clearly that he has both my backing and my confidence.
It will similarly be necessary for the Government to resist pressures for increases in wage rates which would imperil price ceilings.
Without some general stabilization the consumer cannot be protected. Without stabilization, reconversion cannot proceed as rapidly as it should; for stability of cost is indispensable to sound business planning.
The price control and stabilization program has received the backing of the great majority of businessmen throughout the war period. With few exceptions, business groups have realized clearly their own personal stake and the stake of our basic economy in the success of the anti-inflation program.
During the months that lie ahead, however, some groups in business may be tempted to substitute for this long-range wartime thinking, a short-range policy designed to secure prices high enough to provide immediate profits over and above their temporarily high costs of production due to their initial low volume.
These pressures must be resisted. Prices must be held firmly on reconversion items as well as on cost of living items during the coming months.
The American people are entitled to a firm assurance not only on the part of the Administration, but from the Congress itself, that rents and the prices of clothing, food, and other essentials will be held in line. They are also entitled to buy washing machines, vacuum cleaners, automobiles and other products at prices based on our traditional system of high output and low unit costs.
The promise of good profits for businessmen must not be based on small initial volume. It must be based on the full all-out production which it is my belief that American industry will rapidly achieve.
Because of heavy wartime needs, it has been necessary to allocate available supplies of many foods among various claimants within this country, and among other countries. It has been necessary to set aside large blocks of specified commodities in order to make these commodities available for military and other essential needs. Rationing of food for consumers has been necessary in the interest of fair distribution.
Many of these controls have already been eliminated and all remaining allocations, set-asides, and rationing will be removed as rapidly as the supply situation will permit.
However, supplies of some of our principal foods will continue beyond the end of 1945 to be too small for the demand.
For example, the world will be short of requirements for fats and oils and sugar for some months, and allocations and rationing will probably have to be continued into 1946. We must not move so rapidly as to endanger the orderly distribution of goods on which we have based our living during the emergency.
Let me add that in no case should rationing controls be removed if by so doing we should jeopardize our relief shipments to Europe and other distressed war areas. We have a moral obligation to the people of these liberated areas. More than that, our own enlightened self-interest tells us that hungry people are rarely advocates of democracy. The rehabilitation of these countries, and indeed the removal of American occupational troops, may be unnecessarily delayed if we fail to meet these responsibilities during the next few months.
During the reconversion period and as long as shortages in certain materials other than food continue, the War Production Board will have to support the stabilization program as it has done during the past four years.
It must be in a position to take action where necessary, to increase scarce materials and facilities, break bottlenecks, channel production to meet essential needs, safeguard the opportunities for small business concerns, and, above all, to control inventories so as to prevent speculative hoarding and unbalanced distribution.
As the Congress knows, the War Production Board has already removed a great majority of the controls which were in force during the war, and many more will be removed during the next few months.
I trust that the Congress will agree, however, that the controls which still remain and which are still considered necessary by the agency charged with responsibility should not be removed until the need for them disappears. The need to control a few critical materials which the war has caused to be in short supply will continue for some time until adequate supplies are again available. Foremost among these materials are tin and crude rubber.
It will also be necessary for some period to prevent the hoarding of items now badly needed and in great demand for the civilian economy. Many critical shortages can be avoided by the extension of general inventory controls which would prevent the accumulation of unreasonably large stocks in the hands of a few. This will speed the reconversion program and will also greatly assist in avoiding inflation of the price structure.
The extension of one further type of control should have consideration at this time. In the national interest, this Government has made and should continue to make agreements for securing our fair share of materials from certain foreign sources and also agreements for supplying various materials and products abroad. The Government should have authority to assure the carrying out of such commitments.
These production and inventory controls, as well as the allocations of food, set-asides of commodities, and rationing among consumers have been set up under the Second War Powers Act.
Most of the provisions of this act expire on December 31, 1945.
I am convinced that an orderly transition to a peacetime economy will require the use of some of these controls after the first of the year.
I request the Congress, therefore, to extend the provisions of the Second War Powers Act, either in its present form or with appropriate limitations, preserving the powers necessary to achieve the objectives I have outlined.
The Congress has my definite assurance that none of these war powers will be exercised by the executive branch of the Government unless they are deemed essential to the attainment of the objective of an orderly stabilized reconversion. The Congress should, of course, if it extends the statute, reserve the right to terminate it by legislation at any time it deems necessary.
I hope that the Congress will not delay the extension of this authority. Delay would retard reconversion by creating uncertainty on the part of business as to whether necessary controls will be retained or not. Businessmen, in planning for next year's activities, will be assisted greatly by knowing in advance whether or not the Government is going to keep a firm hand at the brakes to prevent inflation.
The termination of the wartime food subsidies, for which a total of $1,798,000,000 has been authorized for the current year, is one of the important problems in reconversion. Agencies dealing directly with this problem are now meeting jointly to determine in what order and at what time these food subsidies may be eliminated without an undue disturbance to farm income or living costs.
Subsidies for purposes other than food are also being reviewed by the agencies concerned, who are collecting the necessary data for an orderly liquidation at the earliest date compatible with the stabilization program.
Those subsidies which were designed originally to stimulate increased production should not be removed at a time or in a manner to incite inflation and upset our economy.
I have directed that early reports be made on this important problem.
4. WAR POWERS AND EXECUTIVE AGENCIES REORGANIZATION
I should like to bring to the attention of the Congress the legal difficulties that will arise unless care is taken in the drafting of legislation terminating wartime controls and wartime agencies.
I have asked the Attorney General to prepare a report on the principal statutes that confer wartime powers and on the various wartime agencies, with particular reference to the circumstances under which each terminates.
A copy of this memorandum1 is attached for the information of the Congress. It is an able and comprehensive summary of the applicable laws.
1The report of the Attorney General to the President, in the form of a letter dated September 1, 1945, is printed with the message in House Document 282 (79th Cong., 1st sess.).
Your attention is particularly called to the statement in the opinion of the Attorney General to the effect that the broad basis of governmental power on which the existing emergency and wartime statutes rest has not been terminated by the unconditional surrender of our enemies.
Certain of the wartime statutes which have been made effective "in time of war," "during the present war," or "for the duration of the war" continue to be effective until a formal state of peace has been restored, or until some earlier termination date is made applicable by appropriate governmental action. Another group of statutes which by their provisions terminate "upon the cessation of hostilities" or "upon termination of the war," will in fact and in law terminate only by a formal proclamation to that effect by the President or by appropriate congressional action.
From time to time action will be taken with respect to these agencies, with the general objective of streamlining the Government into a peacetime organization as quickly as possible.
The time has not yet arrived, however, for the proclamation of the cessation of hostilities, much less the termination of the war. Needless to say, such proclamations will be made as soon as circumstances permit.
It has been necessary during the course of the war to make numerous important redistributions of functions among executive agencies.
This has been accomplished by the President under the authority of title I of the First War Powers Act. This act expires six months after the termination of the war, or at such earlier time as may be designated by appropriate governmental action.
If the Congress or the President were formally to declare the present war terminated, it would automatically cause all the steps taken under the First War Powers Act with respect to the war agencies to expire, and would have the Government revert automatically to its preexisting status six months after the declaration.
If this were to occur, it would cause great confusion and chaos in the Government.
It is the policy of this administration not to exercise wartime powers beyond the point at which it is necessary to exercise them.
Similarly, the wartime agencies of the Government will not be allowed to continue to perform functions not required by present conditions.
Those functions of the wartime agencies which must be retained during part or all of the period of reconversion should be transferred as promptly as practicable to the permanent departments and agencies of the Government. The remaining functions, appropriate only to the crisis through which we have passed, should be terminated in an orderly, systematic fashion as soon as possible.
A program of winding up wartime agencies and distributing their functions on a peacetime basis is now being pursued under the powers vested in the President by title I of the First War Powers Act.
Therefore, I urge that the Congress do not yet adopt a resolution proclaiming the termination of the war or the termination of the emergency or the cessation of hostilities. Such a resolution would automatically cause the death of many war powers and wartime agencies before we are ready.
At the same time I recognize that the Congress may wish to repeal certain specific wartime statutes. If this is to be done, the repeal should be on a selective basis, through the adoption of specific statutes dealing with each wartime power which the Congress decides should be terminated.
In my message dated May 24, 1945, it was recommended that permanent legislation be enacted which would authorize the President to submit to the Congress, from time to time, plans providing for the reorganization of executive agencies, each such plan to become effective unless the Congress should reject it by concurrent resolution.
This type of joint action by the Congress and the President has produced, and will produce, far better results than can be achieved by the usual legislative process in the field of executive reorganization. If proper progress is to be made, it is necessary to permit the President to lay out the machinery for carrying out his responsibility for the conduct of the executive branch, subject to rejection by the two Houses of Congress. Executive initiative, subject to congressional veto, is an effective approach to governmental reorganization.
The responsibility of conducting the executive branch rests upon the President. It is fair and efficient to permit him to lay out the machinery for carrying out that responsibility.
The means for doing this should be generally along the lines of the Reorganization Act of 1939, which gives the initiative to the President, but reserves power to the Congress by a majority vote to nullify any action of the President which does not meet with its approval.
Considerable progress was made in efficiency of government under this Reorganization Act of 1939. I recommend that such powers be made of permanent duration and that the legislation be sufficiently flexible to permit any kind of adjustment for which necessity may arise.
It is clear to all of us that the Government has a difficult and important task in the years which lie ahead. Our Government belongs to the people and the people have a right to expect from their Government the greatest possible efficiency in carrying out its task.
Our Government has never been as efficient as we should like to see it. To some degree this ,nay be charged to the size of some of the tasks assigned to it. To some extent, it is also due to the lack of trained Government personnel and the low salaries paid to Government officials.
There is no question that the war has taught us a great deal about Government administration. There is still, however, much room for improvement.
I have undertaken directly through the members of the Cabinet and also through the Directors of the Office of War Mobilization and Reconversion and the Bureau of the Budget to emphasize the need for more efficient operation in all the executive branches of the Government. I have requested them to examine administrative procedures, and to speed up and simplify their operations to the maximum practical degree.
I have also requested the Bureau of the Budget to examine closely with each department and agency head, the actual needs of his office following the surrender of Japan. They have been asked to reduce budgets promptly and fully wherever cuts are indicated. The Bureau of the Budget is now completing studies which will result in reductions of millions of dollars in the expense of operating our Government.
We must continue relentlessly this program for increased Government efficiency. The Congress can depend upon the Executive to push this program with the utmost vigor.
5. FULL EMPLOYMENT
I am confident that, with the cooperation of American industry, labor, and agriculture, we can bridge the gap between war and peace.
When we have reconverted our economy to a peacetime basis, however, we shall not be satisfied with merely our prewar economy. The American people have set high goals for their own future. They have set these goals high because they have seen how great can be the productive capacity of our country.
The levels of production and income reached during the war years have given our citizens an appreciation of what a full production peacetime economy can be.
They are not interested in boom prosperity--for that only too often leads to panic and depression. But they are interested in providing opportunity for work and for ultimate security.
Government must do its part and assist industry and labor to get over the line from war to peace.
That is why I have asked for unemployment compensation legislation.
That is why I now ask for full-employment legislation.
The objectives for our domestic economy which we seek in our long-range plans were summarized by the late President Franklin D. Roosevelt over a year and a half ago in the form of an economic bill of rights. Let us make the attainment of those rights the essence of postwar American economic life.
I repeat the statement of President Roosevelt:
In our day these economic truths have become accepted as self-evident. We have accepted, so to speak, a .second bill of rights under which a new basis of security and prosperity can be established for all--regardless of station, race, or creed.
Among these are:
The right to a useful and remunerative job in the industries, or shops or farms or mines of the Nation.
The right to earn enough to provide adequate food and clothing and recreation.
The right of every farmer to raise and sell his products at a return which will give him and his family a decent living.
The right of every businessman, large and small, to trade in an atmosphere of freedom from unfair competition and domination by monopolies at home or abroad.
The right of every family to a decent home.
The right to adequate medical care and the opportunity to achieve and enjoy good health.
The right to adequate protection from the economic fears of old age, sickness, accident, and unemployment.
The right to a good education.
All of these rights spell security. And after this war is won we must be prepared to move forward, in the implementation of these rights, to new goals of human happiness and well-being.
America's own rightful place in the world depends in large part upon how fully these and similar rights have been carried into practice for our citizens. For unless there is security here at home there cannot be lasting peace in the world.
I shall from time to time communicate with the Congress on some of the subjects included in this enumeration of economic rights.
Most of them, in the last analysis, depend upon full production and full employment at decent wages.
There has been much discussion about the necessity of continuing full employment after the war if we hope to continue in substantial degree the prosperity which came with the war years. The time has come for action along these lines.
To provide jobs we must look first and foremost to private enterprise-to industry, agriculture, and labor. Government must inspire enterprise with confidence. That confidence must come mainly through deeds, not words.
But it is clear that confidence will be promoted by certain assurances given by the Government:
Assurance that all the facts about full employment and opportunity will be gathered periodically for the use of all.
Assurance of stability and consistency in public policy, so that enterprise can plan better by knowing what the Government intends to do.
Assurance that every governmental policy and program will be pointed to promote maximum production and employment in private enterprise.
Assurance that priority will be given to doing those things first which stimulate normal employment most.
A national reassertion of the right to work for every American citizen able and willing to work--a declaration of the ultimate duty of Government to use its own resources if all other methods should fail to prevent prolonged unemployment--these will help to avert fear and establish full employment. The prompt and firm acceptance of this bedrock public responsibility will reduce the need for its exercise.
I ask that full employment legislation to provide these vital assurances be speedily enacted. Such legislation should also provide machinery for a continuous full-employment policy--to be developed and pursued in cooperation among industry, agriculture, and labor, between the Congress and the Chief Executive, between the people and their Government.
Full employment means full opportunity for all under the American economic system--nothing more and nothing less.
In human terms, full employment means opportunity to get a good peacetime job for every worker who is ready, able, and willing to take one. It does not mean made work, or making people work.
In economic terms, full employment means full production and the opportunity to sell goods--all the goods that industry and agriculture can produce.
In Government terms, full employment means opportunity to reduce the ratio of public spending to private investment without sacrificing essential services.
In world-wide terms, full employment in America means greater economic security and more opportunity for lasting peace throughout the world.
These goals and the machinery to carry them out are set forth in legislation now pending before the Congress on which extensive public hearings have been held. The country justifiably expects early action along these lines.
6. FAIR EMPLOYMENT PRACTICE COMMITTEE
During the years of war production we made substantial progress in overcoming many of the prejudices which had resulted in discriminations against minority groups.
Many of the injustices based upon considerations of race, religion, and color were removed. Many were prevented. Perfection was not reached, of course, but substantial progress was made.
In the reconversion period and thereafter, we should make every effort to continue this American ideal. It is one of the fundamentals of our political philosophy, and it should be an integral part of our economy.
The Fair Employment Practice Committee is continuing during the transition period. I have already requested that legislation be enacted placing the Fair Employment Practice Committee on a permanent basis. I repeat that recommendation.
7. LABOR DISPUTES AND WAGE STABILIZATION
Our national welfare requires that during the reconversion period production of civilian goods and services--as full production as possible-go forward without interruption, and that labor and industry cooperate to keep strikes and lock-outs at a minimum.
Those who have the responsibility of labor relations must recognize that responsibility. This is not the time for short-sighted management to seize upon the chance to reduce wages and try to injure labor unions. Equally it is not the time for labor leaders to shirk their responsibility and permit widespread industrial strife.
With this objective in view, I shall shortly convene a conference of representatives of organized labor and industry for the purpose of working out by agreement means to minimize labor disputes.
In the interim period, pending the convening of the conference, I have called upon the representatives of organized labor and industry to continue their adherence to the no-strike, no-lock-out policy. During this interim period, labor disputes which threaten a substantial interference with the transition to a peacetime economy should be submitted to the War Labor Board. They would there be handled by the Board under existing procedures. The country will expect parties to any such disputes to comply voluntarily with the determinations of the War Labor Board.
The threat of inflationary bidding-up of wage rates by competition in a short labor market has disappeared. Therefore the War Labor Board has removed the necessity of approving proposed voluntary wage increases, so long as they will not be used to obtain an increase in price ceilings.
I have conferred upon the War Labor Board adequate authority to correct maladjustments and inequities in wage rates arising in the reconversion period which will tend to interfere with the effective transition to a peacetime economy.
The Board should be terminated as soon after the conclusion of the forthcoming industry-labor conference as the orderly disposition of the work of the Board and the provisions of the War Labor Disputes Act permit, and after facilities have been provided to take care of the wage stabilization functions under the act of October 2, 1942.
Meanwhile, plans for strengthening the Department of Labor, and bringing under it functions properly belonging to it, are going forward. With the return to a peacetime economy and the elimination of the present temporary wartime agencies and procedures, we must look to collective bargaining, aided and supplemented by a truly effective system of conciliation and voluntary arbitration, as the best and most democratic method of maintaining sound industrial relations.
8. UNITED STATES EMPLOYMENT SERVICE EXTENSION
Placing demobilized veterans and displaced war workers in new peacetime jobs is the major human problem of our country's reconversion to a peacetime economy. It is imperative that this work be done swiftly and efficiently, and that men and women lose a minimum amount of time between jobs.
The next few months are crucial. What we do now will affect our American way of life for decades to come.
The United States Employment Service has an important responsibility in the performance of this task.
At present, this agency operates as a national and centralized system with a free flow of information among its offices. Under the 1946 appropriation act, the offices are to be turned back to the 48 States within 90 days after the cessation of hostilities.
Shortly after the declaration of war, the Government realized that the manpower of the Nation could be mobilized more efficiently if the United States Employment Service were centralized under Federal control. Hundreds of thousands of workers had to be recruited from all parts of the country. Often, they were wanted in regions far from their homes. Certain areas had surpluses of labor; others were desperately in need of more workers. This situation could be met only through a centrally operated employment service that covered the entire Nation.
Now we are faced with this problem in reverse. Hundreds of thousands of men and women will want to seek jobs in towns and cities other than those in which they worked during the war. They may want to return home, or they may want to strike out in search of new opportunities in new surroundings. Millions of veterans also will be coming back in search of peacetime jobs. They will want to know where such jobs can be found, not only in their own areas, but also in other parts of the land.
The task of helping this vast army of job seekers to fit themselves into peacetime economy is fully as difficult as the mobilization of manpower for war. To make any decided change in the machinery to handle this problem now would cause unnecessary hardship to workers and veterans. It would slow down the entire process of reconversion.
I urgently recommend that the Congress do not yet return the Employment Service to the States. Ultimately it should be so returned. However, it should be continued under Federal control at least until the expiration of the War Mobilization Act--June 30, 1947.
I also recommend that its appropriation be increased by $10,000,000 for the current fiscal year. Prompt action on this matter is especially important since personnel and facilities must be quickly enlarged to handle the rising tide of veterans and war workers who will be seeking jobs.
9. AGRICULTURE
One of the most magnificent production jobs in the war has been done by the farmers of the United States. They have met the unprecedented demands of the war, and, at the same time, have provided our civilian population with more food per capita than during the 1935-39 prewar period.
No other group in America labored longer or harder to meet the war demands put upon them. Food production last year reached a peak more than a third above the prewar years despite the fact that farm population has declined by about five million since 1940.
Fortunately, farmers were aided by better-than-average weather conditions over the country. We cannot, however, count on continuance of better-than-average weather. Therefore, because of the great demands for food that exist in this country and for relief abroad, the Department of Agriculture is planning for another year of full production. This does not mean the same volume of production for each individual crop, because the surrender of Japan has brought changes in the demand pattern. But the total acreage needed for next year will not be greatly different from this year.
The Government now must be prepared to carry out the Nation's responsibility to aid farmers in making their necessary readjustments from a wartime to a peacetime basis. The Congress already has provided postwar supports against price collapse for many farm products. This was a provision of wisdom and foresight.
After the First World War farm prices dropped more than 50 percent from the spring of 1920 to the spring of 1921. We do not intend to permit a repetition of the disaster that followed the First World War. The Secretary of Agriculture has assured me that he will use all means now authorized by the Congress to carry out the price-support commitments.
But there is need for additional measures to strengthen the machinery for carrying out price-support commitments, and for laying the basis for broader peacetime markets for agricultural products.
The Congress already has provided for one such postwar measure that needs now to be adapted to our changed situation. Recognizing that the lend-lease program required greatly increased production and that this increase could not be suddenly discontinued when the program stopped, the Congress wisely set aside $500,000,000 of lend-lease funds for price support of farm commodities. This money is now available for the purpose for which it was intended, but in order that it may be used most effectively whenever the need arises, I recommend early legislation which would make those funds available to the Commodity Credit Corporation on a continuing basis. Such action would reaffirm the specific intent of the Congress as to the use of this money in safeguarding farm prices.
Strengthening the machinery for carrying out price-support commitments is the one measure necessary to safeguard farm prices. Stimulation of the export of farm commodities is another. More food is needed in the war-ravaged areas of the world. In the process of meeting relief requirements abroad, we have the opportunity of developing export markets for the future.
The farmer has always faced certain specific problems which are peculiar to his occupation. His crops are at the mercy of the weather.
The factory owner and the worker at the machine have available to them insurance programs which protect them from losses. Our farmers have the right to the same kind of protection. Strengthening and further development of crop insurance for farmers, organized and backed by the Federal Government, can give them this protection. A well-rounded crop-insurance program, together with the assurance of reasonable and stable farm prices, will go a long way toward meeting basic problems which have plagued farmers in the past.
Much that has been accomplished during the war was made possible by the wise national program in support of scientific research in agriculture and forestry, and by the program for the conservation and improvement of our soil and forest resources. These policies have paid large dividends during the war. We ought to continue and strengthen them.
Within recent years the Congress has enacted various measures which have done much to improve the economic status of this country's farmers and to make rural living more attractive. In enacting individual pieces of legislation it has not been possible to make adjustments in existing measures in keeping with the changing pattern of needs. The Secretary of Agriculture is now reexamining existing agricultural programs in the light of peacetime needs in order that they make the fullest contribution to the welfare of farmers and the people as a whole. I hope that the Congress also, through its appropriate committees, will give careful consideration to this problem with a view to making such adjustments as are necessary to strengthen the effectiveness of these various measures.
10. SELECTIVE SERVICE
While the cruel lessons of war are fresh in every mind, it is fitting that we now undertake appropriate measures for the future security of the United States.
The times call for a broad and realistic appraisal of our military needs and obligations. This Nation, and the other members of the family of nations, are facing the hazardous transition to a peace economy in a world grown acutely sensitive to power.
We have charted the course to a stable world peace, but that course still remains to be sailed.
We must, of course, plan for the immediate needs of this year and the next. But we would break faith with those who won for us the victory, if we should fail at the same time to adopt an integrated and long-range program for the national security.
As a sovereign nation, we must continue to be ready to defend our national integrity by maintaining and manning adequate defense establishments within this continent, at the Panama Canal, and at all our bases overseas. As a member of the Security Council of the United Nations, we have an immediate obligation to bear a share, commensurate with our national standing, in safeguarding the future security of all peace-loving nations. As a victor in the greatest war of history, we are committed now to an armed occupation of the lands of our defeated enemies until it is assured that the principles for which we fought shall prevail in the reconstruction of those lands.
To meet these immediate obligations will require the maintenance for some time of a real measure of our present land, sea, and air power.
And in this first year after victory our people have another obligation, one which is felt in almost every American home. We owe it to those now in the armed forces that they be returned to civilian life with all possible speed.
To provide the personnel necessary to meet these immediate obligations we must obtain replacements for those veterans who have already rendered long and arduous service.
We shall make every effort to raise these replacements by recruiting volunteers. To that end I ask that the Congress consider ways and means to assure the maximum success of the recruiting campaigns which have already been authorized. I suggest that legislation be enacted to remove the present restriction on eligibility for voluntary enlistment and to allow the armed forces to enlist a larger number of volunteers than is now authorized. It is further recommended that, in order to enable the armed forces satisfactorily to compete in the procurement of personnel, the Congress provide suitable inducements for volunteer service in the Army and Navy.
However, in view of our extensive national commitments, I am certain, as are the War and Navy Departments, that we cannot rely on voluntary recruitment as the sole method of procuring the necessary replacements.
I, therefore, urge that the Congress continue inductions to assure replacements for these veterans, in such numbers as are not supplied by volunteers.
An unforgivable discrimination would result if, by suspending inductions now, we should favor those who have had no military service at the cost of requiring continued sacrifice from those who have already done their part.
Our first concern should be for those who have been in the armed forces for several years. They have been separated from their homes and from their loved ones. Many of them have been under constant fire and continuous danger for months and even years. We should try to avoid imposing further service upon them.
The only way that this can be done is to continue the induction of young men who as yet have not served a tour of active duty in the armed services. Only when we find that we are able to obtain a sufficient number of volunteers to fill the necessary quotas for our occupational needs, can we discontinue the Selective Service System.
Of course it is entirely up to the Congress to choose the means by which we will provide and maintain the necessary strength to meet our commitments. The alternatives presented are very simple. There are no offers. Either we retain men now in the service for a further indefinite period, or we provide replacements by further inductions.
As you know, I have already directed the Selective Service to cut down the number of inductions from 80,000 to 50,000 per month, and to limit them to the age group of 18 through 25.
It would seem reasonable to limit inductions hereafter to men between the ages of 18 and 25, inclusive, and fix their maximum term of service at two years.
Under the existing statute, inductees can be legally retained only for the duration of the war and a period of six months thereafter. I trust that, in any event, the Congress will not pass a resolution to the effect that the war has terminated for the purposes of this statute. To do so would give to all inducted men and temporary officers of the Army now on active duty the fight to civilian status, and would create an impossible demobilization situation.
These are the military steps which it is apparent must be taken at once to meet the needs of the transition from war to peace. First things necessarily come first.
But the full needs of our national security run far beyond this immediate period of transition. We should make timely preparations for the Nation's long-range security, while we are still mindful of what it has cost us in this war to have been unprepared.
It is, therefore, my intention to communicate with the Congress from time to time during the current session with respect to a comprehensive and continuous program of national security, including a universal training program, unification of the armed services, and the use and control of atomic energy.
II. HOUSING
The largest single opportunity for the rapid postwar expansion of private investment and employment lies in the field of housing, both urban and rural. The present shortage of decent homes and the enforced widespread use of substandard housing indicate vital unfulfilled needs of the Nation. These needs will become more marked as veterans begin to come back and look for places to live.
There is wide agreement that, over the next ten years, there should be built in the United States an average of from a million to a million and a half homes a year.
Such a program would provide an opportunity for private capital to invest from six to seven billion dollars annually. Private enterprise in this field could provide employment for several million workers each year. A housing program of this realistic size would, in turn, stimulate a vast amount of business and employment in industries which make house furnishings and equipment of every kind, and in the industries which supply the materials for them. It would provide an impetus for new products, and would develop new markets for a variety of manufactured articles to be made by private enterprise.
Housing is high on the list of matters calling for decisive Congressional action. This is reflected in recommendations contained in reports recently issued by the postwar committees of the Senate and of the House of Representatives. While differing opinions may be held as to detail, these proposals for action already developed in the Congress appear to me sound and essential.
I urgently recommend that the Congress, at an early date, enact broad and comprehensive housing legislation.
The cardinal principle underlying such legislation should be that house construction and financing for the overwhelming majority of our citizens should be done by private enterprise.
We should retain and improve upon the present excellent Government facilities which permit the savings of the people to be channeled voluntarily into private house construction on financing terms that will serve the needs of home owners of moderate income.
The present principles of insurance of housing investment--now tested by years of experience--should be retained and extended, so as to encourage direct investment in housing by private financing institutions.
The Government, in addition to providing these facilities to help private enterprise and private capital build homes, should take effective measures to stimulate research in methods and materials of housing construction. In this way, better and cheaper methods may be developed to build homes.
In addition to this type of research, the Government might well undertake to assist communities in making recurrent community studies in matters relating to housing and real estate generally. Such a program would contribute in great degree to the progress of private initiative and private capital investment in housing.
We must go on. We must widen our horizon even further. We must consider the redevelopment of large areas of the blighted and slum sections of our cities so that in the truly American way they may be remade to accommodate families not only of low-income groups as heretofore, but of every income group. We must make it possible for private enterprise to do the major part of this job. In most cases, it is now impossible for private enterprise to contemplate rebuilding slum areas without public assistance. The land cost generally is too high.
The time has come for the Government to begin to undertake a program of Federal aid to stimulate and promote the redevelopment of these deteriorating areas. Such Federal aid should be extended only to those communities which are willing to bear a fair part of the cost of clearing their blighted city areas and preparing them for redevelopment and rebuilding.
The rebuilding of these areas should conform to broad city plans, provide adequately for displaced families and make maximum use of private capital. Here lies another road toward establishing a better standard of city living, toward increasing business activity and providing jobs.
This Nation has recognized the need of using public funds to clear slums and to provide homes for those families who could not otherwise enjoy adequate housing because of the difference between their present earning power and the cost or rental of a decent home. We cannot, and we will not, recede from these purposes.
For those low-income groups, representing but a small portion of the total housing need, our prewar program of Federal aid to communities for low-rent housing should be resumed. Only in that way can we make progress toward our ultimate goal laid down in the economic bill of rights of a decent home for every American family.
I recommend, also, that we quicken our rate of progress in rural housing. As a general rule, housing conditions on farms and in rural areas are relatively worse than in our cities. In housing, as well as in other benefits of the American system, farm families should enjoy equality with city dwellers.
A decent standard of housing for all is one of the irreducible obligations of modern civilization. The housing challenge is now squarely before us. The people of the United States, so far ahead in wealth and productive capacity, deserve to be the best housed people in the world. We must begin to meet that challenge at once.
12. RESEARCH
Progress in scientific research and development is an indispensable condition to the future welfare and security of the Nation. The events of the past few years are both proof and prophecy of what science can do.
Science in this war has worked through thousands of men and women who labored selflessly and, for the most part, anonymously in the laboratories, pilot plants, and proving grounds of the Nation.
Through them, science, always pushing forward the frontiers of knowledge, forged the new weapons that shortened the war.
Progress in science cannot depend alone upon brilliant inspiration or sudden flights of genius. We have recently had a dramatic demonstration of this truth. In peace and in war, progress comes slowly in small new bits, from the unremitting day-by-day labors of thousands of men and women.
No nation can maintain a position of leadership in the world of today unless it develops to the full its scientific and technological resources. No government adequately meets its responsibilities unless it generously and intelligently supports and encourages the work of science in university, industry, and in its own laboratories.
During the war we have learned much about the methods of organizing science, and about the ways of encouraging and supporting its activities.
The development of atomic energy is a clear-cut indication of what can be accomplished by our universities, industry, and Government working together. Vast scientific fields remain to be conquered in the same way.
In order to derive the full profit in the future from what we have learned, I urge upon the Congress the early adoption of legislation for the establishment of a single Federal research agency which would discharge the following functions:
1. Promote and support fundamental research and development projects in all matters pertaining to the defense and security of the Nation.
2. Promote and support research in the basic sciences and in the social sciences.
3. Promote and support research in medicine, public health, and allied fields.
4. Provide financial assistance in the form of scholarships and grants for young men and women of proved scientific ability.
5. Coordinate and control diverse scientific activities now conducted by the several departments and agencies of the Federal Government.
6. Make fully, freely, and publicly available to commerce, industry, agriculture, and academic institutions, the fruits of research financed by Federal funds.
Scientific knowledge and scientific research are a complex and interrelated structure. Technological advances in one field may have great significance for another apparently unrelated. Accordingly, I urge upon the Congress the desirability of centralizing these functions in a single agency.
Although science can be coordinated and encouraged, it cannot be dictated to or regimented. Science cannot progress unless rounded on the free intelligence of the scientist. I stress the fact that the Federal research agency here proposed should in no way impair that freedom.
Even if the Congress promptly adopts the legislation I have recommended, some months must elapse before the newly established agency could commence its operations. To fill what I hope will be only a temporary gap, I have asked the Office of Scientific Research and Development and the Research Board for National Security to continue their work.
Our economic and industrial strength, the physical well-being of our people, the achievement of full employment and full production, the future of our security, and the preservation of our principles will be determined by the extent to which we give full and sincere support to the works of science.
It is with these works that we can build the highroads to the future.
13. TRANSITION TAX REVISION
Taxes will play a vital role in attaining a prosperous peace.
I recommend that a transitional tax bill be enacted as soon as possible to provide limited tax reductions for the calendar year 1946. Like the Tax Adjustment Act of 1945, the new bill should aim principally at removing barriers to speedy reconversion and to the expansion of our peacetime economy.
This matter has been under study jointly by congressional and Treasury tax staffs. I am assured that a program will be ready for early consideration by the Congress.
We must reconcile ourselves to the fact that room for tax reduction at this time is limited. A total war effort cannot be liquidated overnight.
It is estimated that war expenditures in the current fiscal year will drop 40 billion dollars below last year, but that they will still amount to 50 billion dollars out of total expenditures of 66 billion dollars. With current receipts estimated at 36 billion dollars, we face an estimated deficit of 30 billion dollars in the current fiscal year. Expenditures, although further reduced, will necessarily continue at high levels in the fiscal year 1947.
In considering tax reductions for 1946 we must not lose sight of the budgetary situation and our obligations to 85,000,000 bondholders.
After passage of the transitional bill, I hope that the Congress will give careful consideration to the modernization of the Federal tax structure. A major objective of this modernization should be the encouragement of business incentives and expansion, and of consumer purchasing power. In this connection consideration of further tax reductions should have due regard to the level of governmental expenditures and the health and stability of our economy.
14. SURPLUS-PROPERTY DISPOSAL
On July 17 I recommended that the Congress enact legislation creating a single Surplus Property Administrator in place of the board of three which was provided in the statute enacted last year.
I realize that this recommendation came too late to be dealt with prior to your recess, but I strongly urge that you act on it now.
A single administrator can do much to obviate the confusion which still exists in this field, and will be able to expedite the disposal of the many billions of dollars of surplus property.
The disposition of plants and equipment is of particular urgency. They should be disposed of promptly by sale or lease on a basis that is fair to the Government and to industry. Our objectives should be to provide early and continuous employment, and through private production, to supply hungry markets and check inflationary tendencies. Leases may often enable the Government and the operator to determine actual value by actual experience. The sooner we can put plants and equipment to work, the sooner we can discard our wartime controls in the transition from war to peace.
15. SMALL BUSINESS
During the war special attention was paid to small business. The American small business is the backbone of our free-enterprise system. The efforts of the Congress in protecting small business during the war paid high dividends, not only in protecting small business enterprise, but also in speeding victory. In spite of the fact, however, that many businesses were helped and saved, it is true that many thousands of them were obliged to close up because of lack of materials or manpower or inability to get into war production.
It is very important to the economy of the United States that these small businesses and many more of them be given opportunity to become a part of American trade and industry. To do this, assistance should be given to small businesses to enable them to obtain adequate materials, private financing, technological improvements, and surplus property.
While some special facilities for small business are required, the greatest help to it will come from the maintenance of general prosperity and full employment. It is much more difficult for small business to survive the hazards which come from trade recessions and widespread unemployment. What small business needs chiefly is a steady supply of customers with stable purchasing power.
I am sure that the Congress will see to it that in its legislation adequate protection and encouragement will be given to the small business of the Nation.
16. VETERANS
It has been a fundamental objective of the Congress and of the administration to make generous provision for those who have served the Nation in its armed forces, and for the dependents of those who have died in their country's cause.
Although a full list of what has been done toward this objective would be entirely too long to enumerate here, it might be well to list some of the major steps already taken:
(1) Adoption of a National Service Life Insurance Act under which about 17 1/2 million insurance applications have been approved, resulting in insurance coverage of more than $135,000,000,000.
(2) Provision of increased compensation or pension for disabled veterans.
(3) Extension and expansion of hospital benefits.
(4) Vocational education and training for veterans having a service-connected disability constituting a vocational handicap.
(5) Mustering-out pay ranging from $100 to $300 dependent upon length of service and rate of pay.
(6) Education or training for any veteran whose education or training was interrupted by entrance into the service.
(7) Guarantee of loans to veterans for the purchase of a home, a farm, or a business.
(8) Legislation to protect the veteran's right to reemployment in his preservice job, if desired.
(9) Provision of unemployment allowances for veterans who become unemployed at any time within two years after discharge, of $20 per week for not to exceed 52 weeks.
(10) Civil-service laws to insure preference to veterans in governmental service.
(11) There has also been instituted in each State pursuant to law an efficient system whereby the counseling and placement needs of veterans will be the responsibility of veterans appointed for that special work.
The transition of veterans from military to civilian activities cannot be accomplished satisfactorily by the Federal Government alone or the States alone, or, indeed, by both. Government can help chiefly through organization and over-all planning. But the real work must be done in each community, through cooperation of the industrial, labor, and civic organizations interested in the welfare of the community and of the veterans.
There have been established information centers in all the field activities of the Selective Service System, United States Employment Service, and Veterans Administration totaling more than 8,000. Veterans may there obtain information on any question of interest to them.
Also, the Retraining and Reemployment Administration in cooperation with the leadership of local communities has established approximately 1,450 community information centers. There are therefore 9,000 information centers of all types throughout the country available to veterans for information purposes. With respect to agricultural interests, use has been made of county committees.
Broad and generous as this legislation for veterans has been, there will be need of amendments and improvements. I recommend that the Congress give prompt consideration to the recommendations which have been made by the Veterans Administration for the purpose of clarifying and liberalizing the provisions relative to hospital and medical care, to vocational training under the Vocational Rehabilitation Act, and to education and training under the Servicemen's Readjustment Act. I also urge consideration of the suggestions made by the Veterans Administration with respect to the loan guarantee features of the latter Act, to amendments clarifying and liberalizing the National Service Life Insurance Act, and those which would increase the rates of compensation for specific injuries including multiple amputations.
I have recommended that the Selective Training and Service Act be continued; but if the Congress determines to the contrary, I urgently recommend that it clarify the provisions thereof which specifically deal with the right of reemployment.
Favorable consideration should be given by the Congress to Federal reclamation projects as outstanding opportunities for returning veterans. The great Columbia Basin project in the Northwest, the projects in the Missouri River Basin, and others of equal significance will bring into existence many thousands of new family-size farms upon which returning veterans can secure a livelihood for themselves and their families and create new wealth for the Nation. A number of farms can be made ready for veterans rapidly if legislation now pending is enacted without delay. This legislation would authorize necessary and proper assistance to veterans who seek to develop farm homes on irrigated lands in Federal reclamation project areas.
I also recommend that the Congress expedite legislation giving veterans social-security coverage credit for the period of their service in the armed services.
The latest available statistics in the Veterans' Administration shows that pension payments in varying amounts are now going forward each month to approximately 600,000 veterans of World War II and to the dependents of more than 100,000 deceased veterans of World War II.
Insurance claims under the National Service Life Insurance Act have been allowed in a total of 361,000 cases involving insurance of approximately 2 1/2 billion dollars.
More than 200,000 World War II veterans have already been afforded hospital care in Veterans Administration facilities.
At the time of Pearl Harbor, the Veterans Administration and the Federal Board of Hospitalization had under way a hospital-building program which by 1949, the estimated peak of needs for World War I veterans, would have provided a total of 100,000 beds for hospital and domiciliary care. Since Pearl Harbor the hospital-building program has been expedited.
The Veterans Administration now has approximately 82,000 hospital and 14,000 domiciliary beds. Thirteen thousand beds are now under construction, and funds are available for 15,000 more.
The Servicemen's Readjustment Act authorizes appropriations to the extent of $500,000,000 for the construction of veterans' hospitals and also the transfer to the Veterans Administration of suitable facilities of the Army and Navy after the end of the war, when surplus to their needs. The program of the Veterans Administration and the Federal Board of Hospitalization contemplates keeping abreast of developing needs through such transfers and additional construction. To this end a plan has just been approved for construction of 29,000 additional beds.
Since World War I there have been more than 3,000,000 hospital admissions in veterans' facilities--and most of them since 1925. Considering that the total number of veterans of World War I and all living veterans of prior wars did not exceed one-third the number of the veterans of World War II, it can readily be seen how important it is to provide hospital privilege. The subject is one which should receive the most careful consideration from the point of view of the extent and quality of facilities to be provided and maintained.
In the last analysis, if we can insure the proper economic conditions, we may be sure that the genius and initiative of Americans who met successfully all demands of the greatest war in history, both on the fighting front and on the production front, will make certain the reintegration of veterans into an expanding civilian economy. Anything less would not meet the country's obligations to its veterans.
17. PUBLIC WORKS AND NATIONAL RESOURCES
During the war years we have expended our resources--both human and natural--without stint. We have thrown into the battle for freedom everything we had.
Thousands of our finest young men--our best human resources-have given their lives. Additional thousands have been injured so that they may not be able to realize their full promise. The education of millions of young men and young women has been disrupted. At best, the Nation will be deprived of the full benefit of their services as scientists, doctors, technicians, lawyers, and educators for 3 to 5 years, or even longer, while they complete the preparation which the necessities of war interrupted.
The depletion of our natural resources is even more startling. We have torn from the earth copper, petroleum, iron ore, tungsten, and every other mineral required to fight a war, without regard to our future supplies. We have taken what we needed. We were not able to, and we did not, take account of tomorrow.
At the same time, our splendid prewar program to build up our national resources was sharply halted. The diligent and constant search for additional deposits of minerals was almost abandoned in favor of a frantic effort to discover and make possible the production of the materials of war.
The long-range programs to conserve the precious inches of topsoil which, in many parts of the country, lie between plenty and poverty were necessarily interrupted. We had neither the manpower nor the materials to spare for projects to prevent the ravages of floods which constantly despoil our land. We had neither the men nor the facilities to continue a large-scale program of reclaiming land and of bringing new land into cultivation.
With a few exceptions, we were forced to suspend the program to which this Nation is committed of harnessing the waters of our great rivers so that they may become vehicles of commerce, beneficent producers of cheap electric power, and servants of the Nation instead of instruments of destruction.
In brief, although during this war this Nation has reached the apex of its power--a peak of greatness and might which the world had never seen--our national capital account has greatly suffered. We must proceed with all possible diligence not merely to restore these depleted resources to their prewar standards but to make them greater and richer than ever before.
We must make a diligent effort to discover new deposits of the precious and indispensable minerals upon which our national life is rounded.
We must develop for the use of industry new technologies so that the vast deposits of low-grade ores that have not heretofore been considered usable may be put to work for the good of all of us.
We should build and improve our roads--the arteries of commerce; we must harness our streams for the general welfare; we must rebuild and reclaim our land; we must protect and restore our forests.
This is not only to provide men and women with work, it is to assure to the Nation the very basis of its life. It is to play the part of a good businessman who insists carefully on maintaining and rebuilding his plant and machinery.
We know that by the investment of Federal funds we can, within the limits of our own Nation, provide for our citizens new frontiers-new territories for the development of industry, agriculture, and commerce.
We have before us the example of the Tennessee Valley Authority, which has inspired regional resource development throughout the entire world.
We know that we have programs, carefully considered and extensively debated, for regional development of the Columbia River in the great Northwest, the Missouri River, the Central Valley of California, and the Arkansas River.
In the Columbia Valley the first major step has been completed for the reclamation of barren land and the production of enormous quantities of power. The waters of the Missouri and the Arkansas and the rivers of California can be put to work to serve the national interest in a similar fashion.
If these rivers remain scourges of our Nation, it is only because we do not have the prudence to harness them for the benefit of our people. If there are among us for any period of time farmers who do not farm because there is no suitable land available to them; workers who do not work because there is no labor for their hands, we have only ourselves to blame so long as we fail to make available to them the opportunities before our very eyes.
I hope that the Congress will proceed as rapidly as possible to authorize regional development of the natural resources of our great river valleys.
It should be unnecessary to say that the conservation and development of the national plant must proceed according to an intelligent and coordinated design. The watersheds of this Nation are not utterly independent, one of the other; our irreplaceable wealth of minerals, land, and timber is not composed of segments which can effectively be dealt with separately. Any program of public works must have as its unifying purpose the greatest possible contribution to the wealth of the Nation and to the wealth-producing capability of the Nation.
It is necessary that we proceed as speedily as possible to set up machinery to make an inventory of our national wealth and our basic resources, and to test the suitability of plans and proposals for public works in light of this purpose. An agency of this sort could provide us with consistent direction toward the goal of rehabilitation and improvement of our basic national resources.
Shortages of materials and manpower made it necessary in the interests of the war effort to suspend many public works which might otherwise have been undertaken. Now that materials and manpower will become more plentiful, we should be prepared to undertake a program of useful public works, not only to improve the physical plant of the United States but to provide employment to great masses of our citizens when private industry cannot do so. Only such public works should now be undertaken, however, as will not compete with the use of materials and manpower by private industry. Plans for other public works should be perfected and put in reserve.
In this connection I have several recommendations:
(1) During the war the construction of Federal public works has been restricted to those necessary for national defense and the prosecution of the war. Projects which normally would have been constructed were deferred, and a large backlog of needed construction has accumulated. Plans for some of these projects--specifically those relating to reclamation, rivers and harbors, flood control, and the conservation of our natural resources--are now ready, and their construction can go forward when funds are provided and materials and manpower are available without competing with private industry. Plans for other Federal projects are being prepared through the use of funds wisely appropriated by the Congress for advance preparation. Additional funds are needed for this purpose, and I urge that the Congress provide them.
(2) I recommend that the Congress enact legislation authorizing additional construction of certain Federal buildings. A portion of this program has already been authorized but has been held up by reason of cost limits imposed upon the buildings which cannot now be met because of increased needs and costs.
(3) I recommend that the Congress release the funds for the highway program authorized under the Federal Aid Highway Act of 1944 (Public Law 521, 78th Cong.). Under this act $500,000,000 has been authorized for the first year and $500,000,000 for each of the two succeeding years, making a total authorization of 1 1/2 billion. With the States' share of the cost included, this would provide a total highway construction program of $3,000,000,000 for a 3-year period.
(4) I recommend that the Congress appropriate $25,000,000 to continue the construction of the Inter-American Highway through the Central American Republics to the Canal Zone.
(5) I recommend that the Congress enact legislation to provide the necessary airports and airport facilities to serve the great needs of an expanded postwar air transportation and commerce. A well-planned airport program would improve transportation, amplify the usefulness of the airplane, and contribute to a healthy aircraft manufacturing industry.
The Congress now has before it a survey of the present and future needs for airports in the United States prepared by the Secretary of Commerce. This report indicates the necessity for approximately 3,000 new airports and for improvements to more than half of the existing 3,000 airports. The report recommends that the program be spread over a period of 10 years and that the cost be shared equally between Federal and non-Federal governmental agencies. I recommend passage of appropriate legislation to implement this program.
(6) States and local governments should be encouraged to construct useful public works of the types that must necessarily supplement and go along with the private construction of homes and industrial facilities. If private construction is to move forward at a rapid rate, it is vitally important that local governments promptly proceed with the construction of such facilities as streets, sewers, water supply, hospitals, airports, schools, and other necessary public facilities. Such projects should be undertaken at this time where they supplement and encourage private construction, not where they compete with it for manpower and materials.
The Congress has already authorized under title V of the War Mobilization and Reconversion Act of 1944 appropriations for advances of Federal funds to State and local governments to assist them in the preparation of detailed drawings and specifications for their public works. The appropriation thus far made is entirely inadequate and I shall request additional funds in order to speed up this important activity during the reconversion period.
The majority of State and local governments are awaiting a decision concerning Federal assistance. In order to get needed public facilities started promptly which do not compete with private construction, I recommend that the Congress give early consideration to grants for such public works under conditions that will insure that each level of government, Federal, State, and local, shall make its appropriate contribution.
(7) The Congress has also been giving consideration to legislation with respect to the construction of hospitals and health centers throughout the country. During the war the Government, through the Federal Works Agency and the Public Health Service, has assisted State and local governments and nonprofit organizations in the construction of such facilities. The beneficial results of this program are well known. The Federal Government must continue to recognize its obligation to maintain and improve the health of the Nation by providing Federal grants where necessary for the construction of hospital and health centers.
Programs of internal improvements of a public character--Federal, State, and local--must preserve competitive bidding, guarantee collective bargaining and good wages for labor, utilize the skills of our returned veterans to the fullest extent, and effectively prevent discrimination because of race, creed, or color.
18. LEND-LEASE AND POSTWAR RECONSTRUCTION
With the arrival of VJ-day lend-lease aid has practically come to an end. It was always understood that it would come to an end at that time. Immediately after Japan accepted the terms of unconditional surrender, I instructed the Foreign Economic Administrator to advise promptly all governments that deliveries of supplies under lend-lease would cease on VJ-day.
I also directed the Administrator in advance of the actual termination of lend-lease deliveries on VJ-day to enter into immediate negotiations with the receiving governments for the purchase of all goods in the pipe line or in storage. These negotiations are proceeding satisfactorily.
In due time we must consider the settlement of the lend-lease obligations which have been incurred during the course of the war. We must recognize that it will not be possible for our Allies to pay us dollars for the overwhelming portion of the lend-lease obligations which they have incurred. But this does not mean that all lend-lease obligations are to be canceled. We shall seek under the procedure prescribed in the Lend-Lease Act and in subsequent agreements with other governments to achieve settlements of our wartime lend-lease relations which will permit generally a sound world-wide economy and will contribute to international peace and our own national security.
We must turn from economic cooperation in war to economic cooperation in peace. We have taken steps to carry out the Bretton Woods proposals for an international monetary fund and an International Bank. We are preparing to extend the operations of the Export-Import Bank. Our objective is to enable the peace-loving nations of the world to become self-supporting in a world of expanding freedom and rising standards of living.
Further legislation is also necessary. If we are to avoid the maintenance of governmental monopoly of international credit, the Johnson Act must be repealed. Private loans on a sane basis are an essential adjunct to the operations of the Export-Import and International Bank operations.
I am directing the executive agencies to give full weight to foreign requirements in determining the need for maintaining domestic and export controls and priorities.
We have already solemnly stated that we will do all that is reasonably possible to help war-torn countries to get back on their feet. I am sure that the Congress will wish the Government to live up to that pledge.
Further legislative action is needed in connection with the United Nations Relief and Rehabilitation Administration. I recommend that the Congress fulfill the commitment already made by appropriating the remaining $550,000,000 granted by the Congress for United States participation.
The Council Meeting of the United Nations Relief and Rehabilitation Administration has just been brought to a successful conclusion. At that meeting our delegate found the need for an additional contribution from all participating countries, to enable the United Nations Relief and Rehabilitation Administration to complete its work in Europe and Asia. On his motion, the Council voted to recommend to member countries a further contribution. Our own share will amount to approximately $1,350,000,000. I am confident that you will find this request for an additional authorization and appropriation fully justified, and I ask for prompt examination and consideration of the request.
In meeting the needs of the United Nations Relief and Rehabilitation Administration, surplus military and lend-lease goods will be used to the fullest possible extent.
Finally, I foresee the need for additional interim lending power to insure a rapid and successful transition to peacetime world trade. Appropriate recommendations will be made to the Congress on this matter when we have completed the exploratory conversations already begun with our associates. We wish to maintain the flow of supplies without interruption. Accordingly, I have directed the executive agencies to complete their conversations and studies at the earliest possible moment. I ask the Congress for speedy consideration of the recommendations when they are made.
19. CONGRESSIONAL SALARIES
Now that restrictions on voluntary salary increases have been removed, I hope that the Congress will take action soon on the salaries of its Members.
My experience as a Member of the Senate has given me a very keen appreciation of the quantity and quality of the work of the Members of the Congress. They are called upon to carry great responsibility and make important decisions in a multitude of matters involving the welfare of the Nation and of the world. Their tasks continue day in and day out. They have increased in number and in importance year by year.
There is no doubt in the mind of any thinking American that Members of the Congress are grossly underpaid and have been for many years. I think that they are entitled--and have already so expressed myself--to a salary anywhere from fifteen to twenty-five thousand dollars a year. I recommend that the Congress enact legislation providing that the salaries of its Members be increased to twenty thousand dollars per year.
At the same time I recommend the repeal of the provision now applicable to the House of Representatives for an additional expense allowance. There should be a straight, out-and-out salary increase for all Members. We should make service in the Congress of the United States available without hardship to ordinary citizens who have to look to the salary for their sole support. I also recommend that an adequate retirement system should be provided for the Members of the Congress who have served for a long period of years.
This should be the first step in creating a decent salary scale for all Federal Government employees--executive, legislative, and judicial.
The most important impediment to obtaining efficient administrative officials in the Federal Government has been the pitiful wage scale. During the war many able and experienced men were obtained for Federal service on purely patriotic grounds. Some of these men who are unable to continue at the present salary scales would be willing to remain at adequate salaries.
In most of the various classifications of Federal employees, the wage scales, with few exceptions, are obsolete and inadequate. This is particularly true of the Federal judiciary.
I sincerely hope that the Congress will take early steps to provide decent wage scales for its Members and for the executive and judicial branches of the Government.
20. SALE OF SHIPS
Prompt resumption of the normal operation of our merchant marine to expedite the reestablishment of our foreign trade is a major part of general reconversion from a wartime to a peacetime economy. The Maritime Commission has already received numerous inquiries and applications from potential purchasers of ships at home and abroad for private ownership and operation.
It is recommended that suitable legislation to permit such sales be expedited so that the uncertainty about the disposal of our large surplus tonnage may be removed. In this way, American shipping companies may undertake commercial operation as rapidly as ships can be released from Government control, and the foreign market can also be used for selling those vessels which are in excess of the needs of our postwar American merchant marine and national defense.
21. STOCK PILING OF STRATEGIC MATERIAL
One of the costliest lessons of our unpreparedness for this war was the great danger involved in depending upon foreign sources for supplies of raw materials necessary in times of national emergency. The United States should never again permit itself to be placed in a position where its defense may be jeopardized by the fact that it has been cut off from the source of strategic raw materials.
I recommend that the Congress enact legislation to bring about the acquisition and retention of stock piles of materials in which we are naturally deficient but which are necessary to supply the needs of the Nation for its defense.
I shall shortly communicate with the Congress recommending a national health program to provide adequate medical care for all Americans and to protect them from financial loss and hardships resulting from illness and accident. I shall also communicate with the Congress with respect to expanding our social-security system, and improving our program of education for our citizens.
In this hour of victory over our enemies abroad, let us now resolve to use all our efforts and energies to build a better life here at home and a better world for generations to come.
The Congress has played its full part in shaping the domestic and foreign policies which have won this victory and started us on the road to lasting peace.
The Congress, I know, will continue to play its patriotic part in the difficult years ahead. We face the future together with confidence-that the job, the full job, can and will be done.
HARRY S. TRUMAN