Speech Transcript:

 Mr. President, Mr. Speaker, and Members of the 80th Congress:

We are here today to consider the state of the Union.

On this occasion, above all others, the Congress and the President
should concentrate their attention, not upon party but upon the
country; not upon things which divide us but upon those which bind us
together-the enduring principles of our American syst em, and our
common aspirations for the future welfare and security of the people
of the United States.

The United States has become great because we, as a people, have been
able to work together for great objectives even while differing about
details.

The elements of our strength are many. They include our democratic
government, our economic system, our great natural resources. But
these are only partial explanations.

The basic source of our strength is spiritual. For we are a people
with a faith. We believe in the dignity of man. We believe that he
was created in the image of the Father of us all.

We do not believe that men exist merely to strengthen the state or to
be cogs in the economic machine. We do believe that governments are
created to serve the people and that economic systems exist to
minister to their wants. We have a profound devotion to the welfare
and rights of the individual as a human being.

The faith of our people has particular meaning at this time in
history because of the unsettled and changing state of the world.

The victims of war in many lands are striving to rebuild their lives,
and are seeking assurance that the tragedy of war will not occur
again. Throughout the world new ideas are challenging the old. Men of
all nations are re-examining the beliefs by whi ch they live. Great
scientific and industrial changes have released new forces which will
affect the future course of civilization.

The state of our Union reflects the changing nature of the modern
world. On all sides there is heartening evidence of great energy-of
capacity for economic development-and even more important, capacity
for spiritual growth. But accompanying this great a ctivity there are
equally great questions, great anxieties, and great aspirations. They
represent the concern of an enlightened people that conditions should
be so arranged as to make life more worthwhile.

We must devote ourselves to finding answers to these anxieties and
aspirations. We seek answers which will embody the moral and
spiritual elements of tolerance, unselfishness, and brotherhood upon
which true freedom and opportunity must rest.

As we examine the state of our Union today, we can benefit from
viewing it on a basis of the accomplishments of the last decade and
of our goals for the next. How far have we come during the last 10
years and how far can we go in the next 10?

It was 10 years ago that the determination of dictators to wage war
upon mankind became apparent. The years that followed brought untold
death and destruction.

We shared in the human suffering of the war, but we were fortunate
enough to escape most of war's destruction. We were able through
these 10 years to expand the productive strength of our farms and
factories.

More important, however, is the fact that these years brought us new
courage, new confidence in the ideals of our free democracy. Our deep
belief in freedom and justice was reinforced in the crucible of war.

On the foundations of our greatly strengthened economy and our
renewed confidence in democratic values, we can continue to move
forward.

There are some who look with fear and distrust upon planning for the
future. Yet our great national achievements have been attained by
those with vision. Our Union was formed, our frontiers were pushed
back, and our great industries were built by men wh o looked ahead.

I propose that we look ahead today toward those goals for the future
which have the greatest bearing upon the foundations of our democracy
and the happiness of our people.

I do so, confident in the thought that with clear objectives and with
firm determination, we can, in the next 10 years, build upon the
accomplishments of the past decades to achieve a glorious future.
Year by year, beginning now, we must make a substan tial part of this
progress.

Our first goal is to secure fully the essential human rights of our
citizens.

The United States has always had a deep concern for human rights.
Religious freedom, free speech, and freedom of thought are cherished
realities in our land. Any denial of human rights is a denial of the
basic beliefs of democracy and of our regard for the worth of each
individual.

Today, however, some of our citizens are still denied equal
opportunity for education, for jobs and economic advancement, and for
the expression of their views at the polls. Most serious of all, some
are denied equal protection under laws. Whether discri mination is
based on race, or creed, or color, or land of origin, it is utterly
contrary to American ideals of democracy.

The recent report of the President's Committee on Civil Rights points
the way to corrective action by the Federal Government and by State
and local governments. Because of the need for effective Federal
action, I shall send a special message to the Cong ress on this
important subject.

We should also consider our obligation to assure the fullest possible
measure of civil rights to the people of our territories and
possessions. I believe that the time has come for Alaska and Hawaii
to be admitted to the Union as States.

Our second goal is to protect and develop our human resources.

The safeguarding of the rights of our citizens must be accompanied by
an equal regard for their opportunities for development and their
protection from economic insecurity. In this Nation the ideals of
freedom and equality can be given specific meaning in terms of
health, education, social security, and housing.

Over the past 12 years we have erected a sound framework of social
security legislation. Many millions of our citizens are now protected
against the loss of income which can come with unemployment, old age,
or the death of wage earners. Yet our system has gaps and
inconsistencies; it is only half finished.

We should now extend unemployment compensation, old age benefits, and
survivors' benefits to millions who are not now protected. We should
also raise the level of benefits.

The greatest gap in our social security structure is the lack of
adequate provision for the Nation's health. We are rightly proud of
the high standards of medical care we know how to provide in the
United States. The fact is, however, that most of our p eople cannot
afford to pay for the care they need.

I have often and strongly urged that this condition demands a
national health program. The heart of the program must be a national
system of payment for medical care based on well-tried insurance
principles. This great Nation cannot afford to allow its c itizens to
suffer needlessly from the lack of proper medical care.

Our ultimate aim must be a comprehensive insurance system to protect
all our people equally against insecurity and ill health.

Another fundamental aim of our democracy is to provide an adequate
education for every person.

Our educational systems face a financial crisis. It is deplorable
that in a Nation as rich as ours there are millions of children who
do not have adequate schoolhouses or enough teachers for a good
elementary or secondary education. If there are educat ional
inadequacies in any State, the whole Nation suffers. The Federal
Government has a responsibility for providing financial aid to meet
this crisis.

In addition, we must make possible greater equality of opportunity to
all our citizens for education. Only by so doing can we insure that
our citizens will be capable of understanding and sharing the
responsibilities of democracy.

The Government's programs for health, education, and security are of
such great importance to our democracy that we should now establish
an executive department for their administration.

Health and education have their beginning in the home. No matter what
our hospitals or schools are like, the youth of our Nation are
handicapped when millions of them live in city slums and country
shacks. Within the next decade, we must see that every A merican
family has a decent home. As an immediate step we need the long range
housing program which I have recommended on many occasions to this
Congress. This should include financial aids designed to yield more
housing at lower prices. It should provi de public housing for
low-income families, and vigorous development of new techniques to
lower the cost of building.

Until we can overcome the present drastic housing shortage, we must
extend and strengthen rent control.

We have had, and shall continue to have, a special interest in the
welfare of our veterans. Over 14 million men and women who served in
the armed forces in World War II have now returned to civilian life.
Over 2 million veterans are being helped through school. Millions
have been aided while finding jobs, and have been helped in buying
homes, in obtaining medical care, and in adjusting themselves to
physical handicaps.

All but a very few veterans have successfully made the transition
from military life to their home communities. The success of our
veterans' program is proved by this fact. This Nation is proud of the
eagerness shown by our veterans to become self-relian t and
self-supporting citizens.

Our third goal is to conserve and use our natural resources so that
they can contribute most effectively to the welfare of our people.

The resources given by nature to this country are rich and extensive.
The material foundations of our growth and economic development are
the bounty of our fields, the wealth of our mines and forests, and
the energy of our waters. As a Nation, we are co ming to appreciate
more each day the close relationship between the conservation of
these resources and the preservation of our national strength.

We are doing far less than we know how to do to make use of our
resources without destroying them. Both the public and private use of
these resources must have the primary objective of maintaining and
increasing these basic supports for an expanding fut ure.

We must continue to take specific steps toward this goal. We must
vigorously defend our natural wealth against those who would misuse
it for selfish gain.

We need accurate and comprehensive knowledge of our mineral resources
and must intensify our efforts to develop new supplies and to acquire
stockpiles of scarce materials.

We need to protect and restore our land public and private-through
combating erosion and rebuilding the fertility of the soil.

We must expand our reclamation program to bring millions of acres of
arid land into production, and to improve water supplies for
additional millions of acres. This will provide new opportunities for
veterans and others, particularly in the West, and ai d in providing a
rising living standard for a growing population.

We must protect and restore our forests by sustained-yield forestry
and by planting new trees in areas now slashed and barren.

We must continue to erect multiple-purpose dams on our great
rivers-not only to reclaim land, but also to prevent floods, to
extend our inland waterways and to provide hydroelectric power. This
public power must not be monopolized for private gain. Only through
well established policies of transmitting power directly to its
market and thus encouraging widespread use at low rates can the
Federal Government assure the people of their full share of its
benefits. Additional power - public and private - i s needed to raise
the ceilings now imposed by power shortages on industrial and
agricultural development.

We should achieve the wise use of resources through the integrated
development of our great river basins. We can learn much from our
Tennessee Valley experience. We should no longer delay in applying
the lessons of that vast undertaking to our other gre at river
basins.

Our fourth goal is to lift the standard of living for all our people
by strengthening our economic system and sharing more broadly among
our people the goods we produce.

The amazing economic progress of the past 10 years points the way for
the next 10.

Today 14 million more people have jobs than in 1938.

Our yearly output of goods and services has increased by two-thirds.

The average income of our people, measured in dollars of equal
purchasing power, has increased-after taxes-by more than 50 percent.

In no other 10 years have farmers, businessmen, and wage earners made
such great gains.

We may not be able to expand as rapidly in the next decade as in the
last, because we are now starting from full employment and very high
production. But we can increase our annual output by at least
one-third above the present level. We can lift our sta ndard of
living to nearly double what it was 10 years ago.

If we distribute these gains properly, we can go far toward stamping
out poverty in our generation.

To do this, agriculture, business, and labor must move forward
together.

Permanent farm prosperity and agricultural abundance will be achieved
only as our whole economy grows and prospers. The farmer can sell more
food at good prices when the incomes of wage earners are high and when
there is full employment. Adequate diets for every American family,
and the needs of our industries at full production, will absorb a
farm output well above our present levels.

Although the average farmer is now better off than ever before, farm
families as a whole have only begun to catch up with the standards of
living enjoyed in the cities. In 1946, the average income of farm
people was $779, contrasted with an average incom e of $1,288 for
non-farm people. Within the next decade, we should eliminate elements
of inequality in these living standards.

To this end our farm program should enable the farmer to market his
varied crops at fair price levels and to improve his standard of
living.

We need to continue price supports for major farm commodities on a
basis which will afford reasonable protection against fluctuations in
the levels of production and demand. The present price support program
must be reexamined and modernized.

Crop insurance should be strengthened and its benefits extended in
order to protect the farmer against the special hazards to which he
is subject.

We also need to improve the means for getting farm products into
markets and into the hands of consumers. Cooperatives which directly
or indirectly serve this purpose must be encouraged - not
discouraged. The school lunch program should be continued and
adequately financed.

We need to go forward with the rural electrification program to bring
the benefits of electricity to all our farm population.

We can, and must, aid and encourage farmers to conserve their soil
resources and restore the fertility of the land that has suffered
from neglect or unwise use.

All these are practical measures upon which we should act immediately
to enable agriculture to make its full contribution to our
prosperity.

We must also strengthen our economic system within the next decade by
enlarging our industrial capacity within the framework of our free
enterprise system.

We are today far short of the industrial capacity we need for a
growing future. At least $50 billion should be invested by industry
to improve and expand our productive facilities over the next few
years. But this is only the beginning. The industrial ap plication of
atomic energy and other scientific advances will constantly open up
further opportunities for expansion. Farm prosperity and high
employment will call for an immensely increased output of goods and
services.

Growth and vitality in our economy depend on vigorous private
enterprise. Free competition is the key to industrial development,
full production and employment, fair prices, and an ever improving
standard of living. Competition is seriously limited tod ay in many
industries by the concentration of economic power and other elements
of monopoly. The appropriation of sufficient funds to permit proper
enforcement of the present antitrust laws is essential. Beyond that
we should go on to strengthen our leg islation to protect
competition.

Another basic element of a strong economic system is the well-being
of the wage earners.

We have learned that the well-being of workers depends on high
production and consequent high employment. We have learned equally
well that the welfare of industry and agriculture depends on high
incomes for our workers.

The Government has wisely chosen to set a floor under wages. But our
40-cent minimum wage is inadequate and obsolete. I recommend the
lifting of the minimum wage to 75 cents an hour.

In general, however, we must continue to rely on our sound system of
collective bargaining to set wage scales. Workers' incomes should
increase at a rate consistent with the maintenance of sound price,
profit, and wage relationships and with increase of productivity.

The Government's part in labor-management relations is now largely
controlled by the terms of the Labor-Management Relations Act of
1947. I made my attitude clear on this act in my veto message to the
Congress last June. Nothing has occurred since to ch ange my opinion
of this law. As long as it remains the law of the land, however, I
shall carry out my constitutional duty and administer it.

As we look ahead we can understand the crucial importance of
restraint and wisdom in arriving at new labor-management contracts.
Work stoppages would result in a loss of production-a loss which
could bring higher prices for our citizens and could also d eny the
necessities of life to the hard pressed peoples of other lands. It is
my sincere hope that the representatives of labor and of industry will
bear in mind that the Nation as a whole has a vital stake in the
success of their bargaining efforts.

If we surmount our current economic difficulties, we can move ahead
to a great increase in our national income which will enable all our
people to enjoy richer and fuller lives.

All of us must advance together. One fifth of our families now have
average annual incomes of less than $850. We must see that our gains
in national income are made more largely available to those with low
incomes, whose need is greatest. This will bene fit us all through
providing a stable foundation of buying power to maintain
prosperity.

Business, labor, agriculture, and Government, working together, must
develop the policies which will make possible the realization of the
full benefits of our economic system.

Our fifth goal is to achieve world peace based on principles of
freedom and justice and the equality of all nations.

Twice within our generation, world wars have taught us that we cannot
isolate ourselves from the rest of the world.

We have learned that the loss of freedom in any area of the world
means a loss of freedom to ourselves - that the loss of independence
by any nation adds directly to the insecurity of the United States
and all free nations.

We have learned that a healthy world economy is essential to world
peace-that economic distress is a disease whose evil effects spread
far beyond the boundaries of the afflicted nation.

For these reasons the United States is vigorously following policies
designed to achieve a peaceful and prosperous world.

We are giving, and will continue to give, our full support to the
United Nations. While that organization has encountered unforeseen
and unwelcome difficulties, I am confident of its ultimate success.
We are also devoting our efforts toward world econom ic recovery and
the revival of world trade. These actions are closely related and
mutually supporting.

We believe that the United States can be an effective force for world
peace only if it is strong. We look forward to the day when nations
will decrease their armaments. Yet so long as there remains serious
opposition to the ideals of a peaceful world, w e must maintain
strong armed forces.

The passage of the National Security Act by the Congress at its last
session was a notable step in providing for the security of this
country. A further step which I consider of even greater importance
is the early provision for universal training. There are many
elements in a balanced national security program, all interrelated
and necessary, but universal training should be the foundation for
them all. A favorable decision by the Congress at an early date is of
world importance. I am convinced that su ch action is vital to the
security of this Nation and to the maintenance of its leadership.

The United States is engaged today in many international activities
directed toward the creation of lasting peaceful relationships among
nations.

We have been giving substantial aid to Greece and Turkey to assist
those nations in preserving their integrity against foreign
pressures. Had it not been for our aid, their situation today might
well be radically different. The continued integrity of th ose
countries will have a powerful effect upon other nations in the
Middle East and in Europe struggling to maintain their independence
while they repair the damages of war.

The United States has special responsibilities with respect to the
countries in which we have occupation forces: Germany, Austria,
Japan, and Korea. Our efforts to reach agreements on peace
settlements for these countries have so far been blocked. But we
shall continue to exert our utmost efforts to obtain satisfactory
settlements for each of these nations.

Many thousands of displaced persons, still living in camps overseas,
should be allowed entry into the United States. I again urge the
Congress to pass suitable legislation at once so that this Nation may
do its share in caring for the homeless and suffer ing refugees of all
faiths. I believe that the admission of these persons will add to the
strength and energy of this Nation.

We are moving toward our goal of world peace in many ways. But the
most important efforts which we are now making are those which
support world economic reconstruction. We are seeking to restore the
world trading system which was shattered by the war an d to remedy
the economic paralysis which grips many countries.

To restore world trade we have recently taken the lead in bringing
about the greatest reduction of world tariffs that the world has ever
seen. The extension of the provisions of the Reciprocal Trade
Agreements Act, which made this achievement possible, is of extreme
importance. We must also go on to support the International Trade
Organization, through which we hope to obtain worldwide agreement on
a code of fair conduct in international trade.

Our present major effort toward economic reconstruction is to support
the program for recovery developed by the countries of Europe. In my
recent message to the Congress, I outlined the reasons why it is wise
and necessary for the United States to extend this support.

I want to reaffirm my belief in the soundness and the promise of this
proposal. When the European economy is strengthened, the product of
its industry will be of benefit to many other areas of economic
distress. The ability of free men to overcome hunger and despair will
be a moral stimulus to the entire world.

We intend to work also with other nations in achieving world economic
recovery. We shall continue our cooperation with the nations of the
Western Hemisphere. A special program of assistance to China, to
provide urgent relief needs and to speed reconstru ction, will be
submitted to the Congress.

Unfortunately, not all governments share the hope of the people of
the United States that economic reconstruction in many areas of the
world can be achieved through cooperative effort among nations. In
spite of these differences we will go forward with o ur efforts to
overcome economic paralysis.

No nation by itself can carry these programs to success; they depend
upon the cooperative and honest efforts of all participating
countries. Yet the leadership is inevitably ours.

I consider it of the highest importance that the Congress should
authorize support for the European recovery program for the period
from April 1, 1948, to June 30, 1952, with an initial amount for the
first 15 months of $6.8 billion. I urge the Congress to act promptly
on this vital measure of our foreign policy this decisive
contribution to world peace.

We are following a sound, constructive, and practical course in
carrying out our determination to achieve peace.

We are fighting poverty, hunger, and suffering.

This leads to peace-not war.

We are building toward a world where all nations, large and small
alike, may live free from the fear of aggression.

This leads to peace-not war. Above all else, we are striving to
achieve a concord among the peoples of the world based upon the
dignity of the individual and the brotherhood of man.

This leads to peace-not war.

We can go forward with confidence that we are following sound
policies, both at home and with other nations, which will lead us
toward our great goals for economic, social and moral achievement.

As we enter the new year, we must surmount one major problem which
affects all our goals. That is the problem of inflation.

Already inflation in this country is undermining the living standards
of millions of families. Food costs too much. Housing has reached
fantastic price levels. Schools and hospitals are in financial
distress. Inflation threatens to bring on disagreem ent and strife
between labor and management.

Worst of all, inflation holds the threat of another depression, just
as we had a depression after the unstable boom following the First
World War.

When I announced last October that the Congress was being called into
session, I described the price increases which had taken place since
June 1946. Wholesale prices had increased 40 percent; retail prices
had increased 23 percent.

Since October prices have continued to rise. Wholesale prices have
gone up at an annual rate of 18 percent. Retail prices have gone up
at an annual rate of 10 percent.

The events which have occurred since I presented my 10-point
anti-inflation program to the Congress in November have made it even
clearer that all in points are essential.

High prices must not be our means of rationing.

We must deal effectively and at once with the high cost of living.

We must stop the spiral of inflation.

I trust that within the shortest possible time the Congress will make
available to the Government the weapons that are so desperately needed
in the fight against inflation.

One of the most powerful anti-inflationary factors in our economy
today is the excess of Government revenues over expenditures.

Government expenditures have been and must continue to be held at the
lowest safe levels. Since V-J day Federal expenditures have been
sharply reduced. They have been cut from more than $63 billion in the
fiscal year 1946 to less than $38 billion in the present fiscal year.
The number of civilian employees has been cut nearly in half-from 3/4
million down to 2 million.

On the other hand, Government revenues must not be reduced. Until
inflation has been stopped there should be no Cut in taxes that is
not offset by additions at another point in our tax structure.

Certain adjustments should be made within our existing tax structure
that will not affect total receipts, yet will adjust the tax burden
so that those least able to pay will have their burden lessened by
the transfer of a portion of it to those best able to pay.

Many of our families today are suffering hardship because of the high
cost of living. At the same time profits of corporations have reached
an all-time record in 1947. Corporate profits total $17 billion after
taxes. This compared with $12.5 billion in 1 946, the previous high
year.

Because of this extraordinarily high level of profits, corporations
can well afford to carry a larger share of the tax load at this
time.

During this period in which the high cost of living is bearing down
on so many of our families, tax adjustments should be made to ease
their burden. The low-income group particularly is being pressed very
hard. To this group a tax adjustment would resul t in a saving that
could be used to buy the necessities of life.

I recommend therefore that, effective January I, 1948, a cost of
living tax credit be extended to our people consisting of a credit of
$40 to each individual taxpayer and an additional credit of $40 for
each dependent. Thus the income tax of a man with a wife and two
children would be reduced $160. The credit would be extended to all
taxpayers, but it would be particular helpful to those in the
low-income group.

It is estimated that such a tax credit would reduce Federal revenue
by $3.2 billion. This reduction should be made up by increasing the
tax on corporate profits in an amount that will produce this sum-with
appropriate adjustments for small corporations.

This is the proper method of tax relief at this time. It gives relief
to those who need it most without cutting the total tax revenue of the
Government.

When the present danger of inflation has passed we should consider
tax reduction based upon a revision of our entire tax structure.

When we have conquered inflation, we shall be in a position to move
forward toward our chosen goals.

As we do so, let us keep ever before us our high purposes.

We are determined that every citizen of this Nation shall have an
equal right and an equal opportunity to grow in wisdom and in stature
and to take his place in the control of his Nation's destiny.

We are determined that the productive resources of this Nation shall
be used wisely and fully for the benefit of all.

We are determined that the democratic faith of our people and the
strength of our resources shall contribute their full share to the
attainment of enduring peace in the world.

It is our faith in human dignity that underlies these purposes. It is
this faith that keeps us a strong and vital people.

This is a time to remind ourselves of these fundamentals. For today
the whole world looks to us for leadership.

This is the hour to rededicate ourselves to the faith in mankind that
makes us strong.

This is the hour to rededicate ourselves to the faith in God that
gives us confidence as we face the challenge of the years ahead.