Speech Transcript:

 Mr. President, Mr. Speaker, Members of the Congress of the United
States: It looks like a good many of you have moved over to the left
since I was here last.

I come before you today to report on the State of the Union and, in
the words of the Constitution, to recommend such measures as I judge
necessary and expedient.

I come also to welcome you as you take up your duties and to discuss
with you the manner in which you and I should fulfill our obligations
to the American people during the next 2 years.

The power to mold the future of this Nation lies in our hands-yours
and mine, and they are joined together by the Constitution.

If in this year, and in the next, we can find the right course to
take as each issue arises, and if, in spite of all difficulties, we
have the courage and the resolution to take that course, then we
shall achieve a state of well-being for our people without precedent
in history. And if we continue to work with the other nations of the
world earnestly, patiently, and wisely, we can-granting a will for
peace on the part of our neighbors make a lasting peace for the
world.

But, if we are to realize these ends, the Congress and the President,
during the next 2 years, must work together. It is not unusual in our
history that the majority of the Congress represents a party in
opposition to the President's party. I am the twentieth President of
the United States who, at some time during his term of office, has
found his own party to be in the minority in one or both Houses of
Congress. The first one was George Washington. Wilson was number
eighteen, and Hoover was number nineteen.

I realize that on some matters the Congress and the President may
have honest differences of opinion. Partisan differences, however,
did not cause material disagreements as to the conduct of the war.
Nor, in the conduct of our international relations, during and since
the war, have such partisan differences been material.

On some domestic issues we may, and probably shall, disagree. That in
itself is not to be feared. It is inherent in our form of Government.
But there are ways of disagreeing; men who differ can still work
together sincerely for the common good. We shall be risking the
Nation's safety and destroying our opportunities for progress if we
do not sett]e any disagreements in this spirit, without thought of
partisan advantage.

As the year 1947 begins, the state of our national economy presents
great opportunities for all. We have virtually full employment, our
national production of goods and services is 50 percent higher than
in any year prior to the war emergency. The national income in 1946
was higher than in any peace-time year. Our food production is
greater than it has ever been. During the last 5 years our productive
facilities have been expanded in almost every field. The American
standard of living is higher now than ever before, and when the
housing shortage can be overcome it will be even higher.

During the past few months we have removed at a rapid rate the
emergency controls that the Federal Government had to exercise during
the war. The remaining controls will be retained only as long as they
are needed to protect the public. Private enterprise must be given
the greatest possible freedom to continue the expansion of our
economy.

In my proclamation of December 31, 1946, I announced the termination
of hostilities. This automatically ended certain temporary
legislation and certain executive powers.

Two groups of temporary laws still remain: the first are those which
by Congressional mandate are to last during the "emergency"; the
second are those which are to continue until the "termination of the
war."

I shall submit to the Congress recommendations for the repeal of
certain of the statutes which by their terms continue for the
duration of the "emergency." I shall at the same time recommend that
others within this classification be extended until the state of war
has been ended by treaty or by legislative action. As to those
statutes which continue until the State of war has been terminated, I
urge that the Congress promptly consider each statute individually,
and repeal such emergency legislation where it is advisable.

Now that nearly all wartime controls have been removed, the operation
of our industrial system depends to a greater extent on the decisions
of businessmen, farmers, and workers. These decisions must be wisely
made with genuine concern for public welfare. The welfare of
businessmen, farmers, and workers depends upon the economic
well-being of those who buy their products. An important present
source of danger to our economy is the possibility that prices might
be raised to such an extent that the consuming public could not
purchase the tremendous volume of goods and services which will be
produced during 1947.

We all know that recent price increases have denied to many of our
workers much of the value of recent wage increases. Farmers have
found that a large part of their increased income has been absorbed
by increased prices. While some of our people have received raises in
income which exceed price increases, the great majority have not.
Those persons who live on modest fixed incomes-retired persons living
on pensions, for example-and workers whose incomes are relatively
inflexible, such as teachers and other civil servants-have suffered
hardship.

In the effort to bring about a sound and equitable price structure,
each group of our population has its own responsibilities.

It is up to industry not only to hold the line on existing prices,
but to make reductions whenever profits justify such action.

It is up to labor to refrain from pressing for unjustified wage
increases that will force increases in the price level.

And it is up to Government to do everything in its power to encourage
high- volume production, for that is what makes possible good wages,
low prices, and reasonable profits.

In a few days there will be submitted to the Congress the Economic
Report of the President, and also the Budget Message. Those messages
will contain many recommendations. Today I shall outline five major
economic policies which I believe the Government should pursue during
1947. These policies are designed to meet our immediate needs and, at
the same time, to provide for the long-range welfare of our free
enterprise system:

First, the promotion of greater harmony between labor and
management.

Second, restriction of monopoly and unfair business practices;
assistance to small business; and the promotion of the free
competitive system of private enterprise.

Third, continuation of an aggressive program of home construction.

Fourth, the balancing of the budget in the next fiscal year and the
achieving of a substantial surplus to be applied to the reduction of
the public debt,

Fifth, protection of a fair level of return to farmers in post-war
agriculture.

LABOR AND MANAGEMENT

The year just past-like the year after the First World War-was marred
by labor management strife.

Despite this outbreak of economic warfare in 1946, we are today
producing goods and services in record volume. Nevertheless, it is
essential to improve the methods for reaching agreement between labor
and management and to reduce the number of strikes and lockouts.

We must not, however, adopt punitive legislation. We must not, in
order to punish a few labor leaders, pass vindictive laws which will
restrict the proper rights of the rank and file of labor. We must
not, under the stress of emotion, endanger our American freedoms by
taking ill-considered action which will lead to results not
anticipated or desired.

We must remember, in reviewing the record of disputes in 1946, that
management shares with labor the responsibility for failure to reach
agreements which would have averted strikes. For that reason, we must
realize that industrial peace cannot be achieved merely by laws
directed against labor unions.

During the last decade and a half, we have established a national
labor policy in this country based upon free collective bargaining as
the process for determining wages and working conditions.

That is still the national policy.

And it should continue to be the national policy.

But as yet, not all of us have learned what it means to bargain
freely and fairly. Nor have all of us learned to carry the mutual
responsibilities that accompany the right to bargain. There have been
abuses and harmful practices which limit the effectiveness of our
system of collective bargaining. Furthermore, we have lacked
sufficient governmental machinery to aid labor and management in
resolving their differences.

Certain labor-management problems need attention at once and certain
others, by reason of their complexity, need exhaustive investigation.
and study.

We should enact legislation to correct certain abuses and to provide
additional governmental assistance in bargaining. But we should also
concern ourselves with the basic causes of labor-management
difficulties. In the light of these considerations, I propose to you
and urge your cooperation in effecting the following four-point
program to reduce industrial strife:

Point number one is the early enactment of legislation to prevent
certain unjustifiable practices.

First, under this point, are jurisdictional strikes. In such strikes
the public and the employer are innocent bystanders who are injured
by a collision between rival unions. This type of dispute hurts
production, industry, and the public-and labor itself. I consider
jurisdictional strikes indefensible.

The National Labor Relations Act provides procedures for determining
which union represents employees of a particular employer. In some
jurisdictional disputes, however, minority unions strike to compel
employers to deal with them despite a legal duty to bargain with the
majority union. Strikes to compel an employer to violate the law are
inexcusable. Legislation to prevent such strikes is clearly
desirable.

Another form of inter-union disagreement is the jurisdictional strike
involving the question of which labor union is entitled to perform a
particular task. When rival umons are unable to settle such disputes
themselves, provision must be made for peaceful and binding
determination of the issues.

A second unjustifiable practice is the secondary boycott, when used
to further jurisdictional disputes or to compel employers to violate
the National Labor Relations Act.

Not all secondary boycotts are unjustified. We must judge them on the
basis of their objectives. For example, boycotts intended to protect
wage rates and working conditions should be distinguished from those
in furtherance of jurisdictional disputes. The structure of industry
sometimes requires unions, as a matter of self-preservation, to
extend the conflict beyond a particular employer. There should be no
blanket prohibition against boycotts. The appropriate goal is
legislation which prohibits secondary boycotts in pursuance of
unjustifiable objectives, but does not impair the union's right to
preserve its own existence and the gains made in genuine collective
bargaining.

A third practice that should be corrected is the use of economic
force, by either labor or management, to decide issues arising out of
the interpretation of existing contracts.

Collective bargaining agreements, like other contracts, should he
faithfully adhered to by both parties. In the most enlightened
union-management relationships, disputes over the interpretation of
contract terms are settled peaceably by negotiation or arbitration.
Legislation should be enacted to provide machinery whereby unsettled
disputes concerning the interpretation of an existing agreement may
be referred by either party to final and binding arbitration.

Point number two is the extension of facilities within the Department
of Labor for assisting collective bargaining.

One of our difficulties in avoiding labor strife arises from a lack
of order in the collective bargaining process. The parties often do
not have a clear understanding of their responsibility for settling
disputes through their own negotiations. We constantly see instances
where labor or management resorts to economic force without
exhausting the possibilities for agreement through the bargaining
process. Neither the parties nor the Government have a definite
yardstick for determining when and how Government assistance should
be invoked. There is need for integrated governmental machinery to
provide the successive steps of mediation, voluntary arbitration,
and-ultimately in appropriate cases-ascertainment of the facts of the
dispute and the reporting of the facts to the public. Such machinery
would facilitate and expedite the settlement of disputes.

Point number three is the broadening of our program of social
legislation to alleviate the causes of workers' insecurity.

On June ii, 1946, in my message vetoing the Case Bill, I made a
comprehensive statement of my views concerning labor-management
relations. I said then, and I repeat now, that the solution of
labor-management difficulties is to be found not only in legislation
dealing directly with labor relations, but also in a program designed
to remove the causes of insecurity felt by many workers in our
industrial society. In this connection, for example, the Congress
should consider the extension and broadening of our social security
system, better housing, a comprehensive national health program, and
provision for a fair minimum wage.

Point number four is the appointment of a Temporary Joint Commission
to inquire into the entire field of labor-management relations.

I recommend that the Congress provide for the appointment of a
Temporary Joint Commission to undertake this broad study.

The President, the Congress, and management and labor have a
continuing responsibility to cooperate in seeking and finding the
solution of these problems. I therefore recommend that the Commission
be composed as follows: twelve to be chosen by the Congress from
members of both parties in the House and the Senate, and eight
representing the public, management and labor, to be appointed by the
President.

The Commission should be charged with investigating and making
recommendations upon certain major subjects, among others:

First, the special and unique problem of nationwide strikes in vital
industries affecting the public interest. In particular, the
Commission should examine into the question of how to settle or
prevent such strikes without endangering our general democratic
freedoms.

Upon a proper solution of this problem may depend the whole
industrial future of the United States. The paralyzing effects of a
nationwide strike in such industries as transportation, coal, oil,
steel, or communications can result in national disaster. We have
been able to avoid such disaster, in recent years, only by the use of
extraordinary war powers. All those powers will soon be gone. In their
place there must be created an adequate system and effective machinery
in these vital fields. This prob1cm will require careful study and a
bold approach, but an approach consistent with the preservation of
the rights of our people. The need is pressing. The Commission should
give this its earliest attention.

Second, the best methods and procedures for carrying out the
collective bargaining process. This should include the
responsibilities of labor and management to negotiate freely and
fairly with each other, and to refrain from strikes or lockouts until
all possibilities of negotiation have been exhausted.

Third, the underlying causes of labor management disputes.

Some of the subjects presented here for investigation involve
long-range study. Others can be considered immediately by the
Commission and its recommendations can be submitted to the Congress
in the near future.

I recommend that this Commission make its first report, including
specific legislative recommendations, not later than March 15, 1947.

RESTRICTION OF MONOPOLY AND PROMOTION OF PRIVATE ENTERPRISE

The second major policy I desire to lay before you has to do with the
growing concentration of economic power and the threat to free
competitive private enterprise. In 1941 the Temporary National
Economic Committee completed a comprehensive investigation into the
workings of the national economy. The Committee's study showed that,
despite a half century of anti-trust law enforcement, one of the
gravest threats to our welfare lay in the increasing concentration of
power in the hands of a small number of giant organizations.

During the war, this long-standing tendency toward economic
concentration was accelerated. As a consequence, we now find that to
a greater extent than ever before, whole industries are dominated by
one or a few large organizations which can restrict production in the
interest of higher profits and thus reduce employment and purchasing
power.

In an effort to assure full opportunity and free competition to
business we will vigorously enforce the anti-trust laws. There is
much the Congress can do to cooperate and assist in this program.

To strengthen and enforce the laws that regulate business practices
is not enough. Enforcement must be supplemented by positive measures
of aid to new enterprises. Government assistance, research programs,
and credit powers should be designed and used to promote the growth
of new firms and new industries. Assistance to small business is
particularly important at this time when thousands of veterans who
are potential business and industrial leaders are beginning their
careers.

We should also give special attention to the decentralization of
industry and the development of areas that are now
underindustrialized.

HOUSING

The third major policy is also of great Importance to the national
economy-an aggressive program to encourage home construction. The
first Federal program to relieve the veterans' housing shortage was
announced in February 1946. In 1946 one million family housing units
have been put under construction and more than 665,000 units have
already been completed. The rate of expansion in construction has
broken all records.

In the coming year the number of dwelling units built will approach,
if not surpass, the top construction year of 1926. The primary
responsibility to deliver housing at reasonable prices that veterans
can afford rests with private industry and with labor. The Government
will continue to expedite the flow of key building materials, to limit
nonresidential construction, and to give financial support where it
will do the most good. Measures to stimulate rental housing and new
types of housing construction will receive special emphasis.

To reach our long-range goal of adequate housing for all our people,
comprehensive housing legislation is urgently required, similar to
the non-partisan bill passed by the Senate last year. At a minimum,
such legislation should open the way for rebuilding the blighted
areas of our cities and should establish positive incentives for the
investment of billions of dollars of private capital in large-scale
rental housing projects. It should provide for improvement of housing
in rural areas and for the construction, over a 4-year period, of half
a million units of public low-rental housing. It should authorize a
single peacetime Federal housing agency to assure efficient use of
our resources on the vast housing front.

FISCAL AFFAIRS

The fourth major policy has to do with the balancing of the budget.
in a prosperous period such as the present one, the budget of the
Federal Government should be balanced. Prudent management of public
finance requires that we begin the process of reducing the public
debt. The budget which I shall submit to you this week has a small
margin of surplus. In the Budget Message I am making recommendations
which, if accepted, will result in a substantially larger surplus
which should be applied to debt retirement. One of these
recommendations is that the Congress take early action to continue
throughout the next fiscal year the war excise tax rates which, under
the present law, will expire on June 30, 1947.

Expenditures relating to the war are still high. Considerable sums
are required to alleviate world famine and suffering. Aid to veterans
will continue at peak level. The world situation is such that large
military expenditures are required. Interest on the public debt and
certain other costs are irreducible. For these reasons I have had to
practice stringent economy in preparing the budget; and I hope that
the Congress will cooperate in this program of economy.

AGRICULTURE

The fifth major policy has to do with the welfare of our farm
population.

Production of food reached record heights in 1946. Much of our
tremendous grain crop can readily be sold abroad and thus will become
no threat to our domestic markets. But in the next few years American
agriculture can face the same dangers it did after World War I. In
the early twenties the Nation failed to maintain outlets for the new
productive capacity of our agricultural plant. It failed to provide
means to protect the farmer while he adjusted his acreage to
peacetime demands.

The result we all remember too well. Farm production stayed up while
demand and prices fell, in contrast with industry where prices stayed
up and output declined. Farm surpluses piled up, and disaster
followed.

We must make sure of meeting the problems which we failed to meet
after the first World War. Present laws give considerable stability
to farm prices for 1947 and i948, and these 2 years must be utilized
to maintain and develop markets for our great productive power.

The purpose of these laws was to permit an orderly transition from
war to peace. The Government plan of support prices was not designed
to absorb, at great cost, the unlimited surpluses of a highly
productive agriculture.

We must not wait until the guarantees expire to set the stage for
permanent farm welfare.

The farmer is entitled to a fair income.

Ways can be found to utilize his new skills and better practices, to
expand his markets at home and abroad, and to carry out the
objectives of a balanced pattern of peacetime production without
either undue sacrifice by farm people or undue expense to the
Government.

HEALTH AND GENERAL WELFARE

Of all our national resources, none is of more basic value than the
health of our people. Over a year ago I presented to the Congress my
views on a national health program. The Congress acted on several of
the recommendations in this program: mental health, the health of
mothers and children, and hospital construction. I urge this Congress
to complete the work begun last year and to enact the most important
recommendation of the program-to provide adequate medical care to all
who need it, not as charity but on the basis of payments made by the
beneficiaries of the program.

One administrative change would help greatly to further our national
program in the fields of health, education, and welfare. I again
recommend the establishment of a well-integrated Department of
Welfare.

VETERANS

Fourteen million World War II servicemen have returned to civil life.
The great majority have found their places as citizens of their
communities and their Nation. It is a tribute to the fiber of our
servicemen and to the flexibility of our economy that these
adjustments have been made so rapidly and so successfully.

More than two million of these veterans are attending schools or
acquiring job skills through the financial assistance of the Federal
Government. Thousands of sick and wounded veterans are daily
receiving the best of medical and hospital care. Half a million have
obtained loans, with Government guarantees, to purchase homes or
farms or to embark upon new businesses. Compensation is being paid in
almost two million cases for disabilities or death. More than three
million are continuing to maintain their low-cost National Service
Life Insurance policies. Almost seven million veterans have been
aided by unemployment and self employment allowances.

Exclusive of mustering-out payments and terminal leave pay, the
program for veterans of all wars is costing over seven billion
dollars a year - one-fifth of our total Federal budget. This is the
most far-reaching and complete veterans program ever conceived by any
nation.

Except for minor adjustments, I believe that our program of benefits
for veterans is now complete. In the long run, the success of the
program will not be measured by the number of veterans receiving
financial aid or by the number of dollars we spend. History will
judge us not by the money we spend, but by the further contribution
we enable our veterans to make to their country. In considering any
additional legislation, that must be our criterion.

CIVIL RIGHTS

We have recently witnessed in this country numerous attacks upon the
constitutional rights of individual citizens as a result of racial
and religious bigotry. Substantial segments of our people have been
prevented from exercising fully their right to participate in the
election of public officials, both locally and nationally. Freedom to
engage in lawful callings has been denied.

The will to fight these crimes should be in the hearts of every one
of us.

For the Federal Government that fight is now being carried on by the
Department of Justice to the full extent of the powers that have been
conferred upon it. While the Constitution withholds from the Federal
Government the major task of preserving peace in the several States,
I am not convinced that the present legislation reached the limit of
Federal power to protect the civil rights of its citizens.

I have, therefore, by Executive order,1 established the President's
Committee on Civil Rights to study and report on the whole problem of
federally-secured civil rights, with a view to making recommendations
to the Congress.

NATURAL RESOURCES

In our responsibility to promote the general welfare of the people,
we have always to consider the natural resources of our country. They
are the foundation of our life. In the development of the great river
systems of America there is the major opportunity of our generation
to contribute to the increase of the national wealth. This program is
already well along; it should be pushed with full vigor.

I must advise the Congress that we are rapidly becoming a "have not"
Nation as to many of our minerals. The economic progress and the
security of our country depend upon an expanding return of mineral
discovery and upon improved methods of recovery. The Federal
Government must do its part to meet this need.

Executive Order 9808 (3 CFR, '943-1948 Comp., p.590).

FOREIGN AFFAIRS

Progress in reaching our domestic goals is closely related to our
conduct of foreign affairs. All that I have said about maintaining a
sound and prosperous economy and improving the welfare of our people
has greater meaning because of the world leadership of the United
States. What we do, or fail to do, at home affects not only ourselves
but millions throughout the world. If we are to fulfill our
responsibilities to ourselves and to other peoples, we must make sure
that the United States is sound economically, socially, and
politically. Only then will we be able to help bring about the
elements of peace in other countries-political stability, economic
advancement, and social progress.

Peace treaties for Italy, Bulgaria, Rumania, and Hungary have finally
been prepared. Following the signing of these treaties next month in
Paris, they will he submitted to the Senate for ratification. This
Government does not regard the treaties as completely satisfactory.
Whatever their defects, however, I am convinced that they are as good
as we can hope to obtain by agreement among the principal wartime
Allies. Further dispute and delay would gravely jeopardize political
stability in the countries concerned for many years.

During the long months of debate on these treaties, we have made it
clear to all nations that the United States will not consent to
settlements at the expense of principles we regard as vital to a just
and enduring peace. We have made it equally clear that we will not
retreat to isolationism. Our policies will be the same during the
forthcoming negotiations in Moscow on the German and Austrian
treaties, and during the future conferences on the Japanese treaty.

The delay in arriving at the first peace settlements is due partly to
the difficulty of reaching agreement with the Soviet Union on the
terms of settlement. Whatever differences there may have been between
us and the Soviet Union, however, should not be allowed to obscure the
fact that the basic interests of both nations lie in the early making
of a peace under which the peoples of all countries may return, as
free men and women, to the essential tasks of production and
reconstruction. The major concern of each of us should be the
promotion of collective security, not the advancement of individual
security.

Our policy toward the Soviet Union is guided by the same principles
which determine our policies toward all nations. We seek only to
uphold the principles of international justice which have been
embodied in the Charter of the United Nations.

We must now get on with the peace settlements. The occupying powers
should recognize the independence of Austria and withdraw their
troops. The Germans and the Japanese cannot be left in doubt and fear
as to their future; they must know their national boundaries, their
resources, and what reparations they must pay. Without trying to
manage their internal affairs, we can insure that these countries do
not re-arm.

INTERNATIONAL RELIEF AND DISPLACED PERSONS

The United States can be proud of its part in caring for the peoples
reduced to want by the ravages of war, and in aiding nations to
restore their national economies. We have shipped more supplies to
the hungry peoples of the world since the end of the war than all
other countries combined.

However, insofar as admitting displaced persons is concerned, I do
not feel that the United States has done its part. Only about 5,000
of them have entered this country since May, 1946. The fact is that
the executive agencies are now doing all that is reasonably possible
under the limitation of the existing law and established quotas.
Congressional assistance in the form of new legislation is needed. I
urge the Congress to turn its attention to this world problem, in an
effort to find ways whereby we can fulfill our responsibilities to
these thousands of homeless and suffering refugees of all faiths.

INTERNATIONAL TRADE

World economic cooperation is essential to world political
cooperation. We have made a good start on economic cooperation
through the International Bank, the International Monetary Fund, and
the Export Import Bank. We must now take other Steps for the
reconstruction of world trade and we should continue to Strive for an
international trade system as free from obstructions as possible.

ATOMIC ENERGY

The United States has taken the lead in the endeavor to put atomic
energy under effective international control. We seek no monopoly for
ourselves or for any group of nations. We ask only that there be
safeguards sufficient to insure that no nation will be able to use
this power for military purposes. So long as all governments are not
agreed on means of international control of atomic energy, the shadow
of fear will obscure the bright prospects for the peaceful use of this
enormous power.

In accordance with the Atomic Energy Act of 1946, the Commission
established under that law is assuming full jurisdiction over
domestic atomic energy enterprise. The program of the Commission
will, of course, be worked out in close collaboration with the
military services in conformity with the wish of the Congress, but it
is my fervent hope that the military significance of atomic energy
will steadily decline. We look to the Commission to foster the
development of atomic energy for industrial use and scientific and
medical research. In the vigorous and effective development of
peaceful uses of atomic energy rests our hope that this new force may
ultimately be turned into a blessing for all nations.

MILITARY POLICY

In 1946 the Army and Navy completed the demobilization of their
wartime forces. They are now maintaining the forces which we need for
national defense and to fulfill our international obligations.

We live in a world in which strength on the part of peace4oving
nations is still the greatest deterrent to aggression. World
stability can be destroyed when nations with great responsibilities
neglect to maintain the means of discharging those responsibilities.

This is an age when unforeseen attack could come with unprecedented
speed. We must be strong enough to defeat, and thus forestall, any
such attack. In our steady progress toward a more rational world
order, the need for large armed forces is progressively declining;
but the stabilizing force of American military strength must not be
weakened until our hopes are fully realized. When a system of
collective security under the United Nations has been established, we
shall be willing to lead in collective disarmament, but, until such a
system becomes a reality, we must not again allow ourselves to become
weak and invite attack.

For those reasons, we need well equipped, well trained armed forces
and we must be able to mobilize rapidly our resources in men and
material for our own defense, should the need arise.

The Army will be reduced to 1,070,000 officers and men by July I,
1947. Half of the Army will be used for occupation duties abroad and
most of the remainder will be employed at home in the support of
these overseas forces.

The Navy is supporting the occupation troops in Europe and in the Far
East. Its fundamental mission-to support our national interests
wherever required-is unchanged. The Navy, including the Marine Corps,
will average 571,000 officers and men during the fiscal year 1948.

We are encountering serious difficulties in maintaining our forces at
even these reduced levels. Occupation troops are barely sufficient to
carry out the duties which our foreign policy requires. Our forces at
home are at a point where further reduction is impracticable. We
should like an Army and a Navy composed entirely of long-term
volunteers, but in spite of liberal inducements the basic needs of
the Army are not now being met by voluntary enlistments.

The War Department has advised me that it is unable to make an
accurate forecast at the present time as to whether it will be
possible to maintain the strength of the Army by relying exclusively
on volunteers. The situation will be much clearer in a few weeks,
when the results of the campaign for volunteers are known. The War
Department will make its recommendations as to the need for the
extension of Selective Service in sufficient time to enable the
Congress to take action prior to the expiration of the present law on
March 31st. The responsibility for maintaining our armed forces at the
strength necessary for our national safety rests with the Congress.

The development of a trained citizen reserve is also vital to our
national security. This can best be accomplished through universal
training. I have appointed an Advisory Commission on Universal
Training to study the various plans for a training program, and I
expect that the recommendations of the Commission will be of benefit
to the Congress and to me in reaching decisions on this problem.

The cost of the military establishment is substantial. There is one
certain way by which we can cut costs and at the same time enhance
our national security. That is by the establishment of a single
Department of National Defense. I shall communicate with the Congress
in the near future with reference to the establishment of a single
Department of National Defense.

National security docs not consist only of an army, a navy, and an
air force. It rests on a much broader basis. It depends on a sound
economy of prices and wages, on prosperous agriculture, on satisfied
and productive workers, on a competitive private enterprise free from
monopolistic repression, on continued industrial harmony and
production, on civil liberties and human freedoms in all the forces
which create in our men and women a strong moral fiber and spiritual
stamina.

But we have a higher duty and a greater responsibility than the
attainment of our own national security. Our goal is collective
security for all mankind.

If we can work in a spirit of understanding and mutual respect, we
can fulfill this solemn obligation which rests upon us.

The spirit of the American people can set the course of world
history. If we maintain and strengthen our cherished ideals, and if
we share our great bounty with war-stricken people over the world,
then the faith of our citizens in freedom and democracy will be
spread over the whole earth and free men everywhere will share our
devotion to those ideals.

Let us have the will and the patience to do this job together.

May the Lord strengthen us in our faith. May He give us wisdom to
lead the peoples of the world in His ways of peace.