Speech Transcript:

 The opening of this new year must arouse in us all grateful thanks to
a kind Providence whose protection has been ever present and whose
bounty has been manifold and abundant. The State of the Union today
demonstrates what can be accomplished under God by a free people; by
their vision, their understanding of national problems, their
initiative, their self-reliance, their capacity for work--and by
their willingness to sacrifice whenever sacrifice is needed.

In the past three years, responding to what our people want their
Government to do, the Congress and the Executive have done much in
building a stronger, better America. There has been broad progress in
fostering the energies of our people, in providing greater opportunity
for the satisfaction of their needs, and in fulfilling their demands
for the strength and security of the Republic.

Our country is at peace. Our security posture commands respect. A
spiritual vigor marks our national life. Our economy, approaching the
400 billion dollar mark, is at an unparalleled level of prosperity.
The national income is more widely and fairly distributed than ever
before. The number of Americans at work has reached an all-time high.
As a people, we are achieving consuming more, building more and
investing more than ever before.

Virtually all sectors of our society are sharing in these good times.
Our farm families, if we act wisely, imaginatively and promptly to
strengthen our present farm programs, can also look forward to
sharing equitably in the prosperity they have helped to create.

War in Korea ended two and a half years ago. The collective security
system has been powerfully strengthened. Our defenses have been
reinforced at sharply reduced costs. Programs to expand world trade
and to harness the atom for the betterment of mankind have been
carried forward. Our economy has been freed from governmental wage
and price controls. Inflation has been halted; the cost of living
stabilized.

Government spending has been cut by more than ten billion dollars.
Nearly three hundred thousand positions have been eliminated from the
Federal payroll. Taxes have been substantially reduced. A balanced
budget is in prospect. Social security has been extended to ten
million more Americans and unemployment insurance to four million
more. Unprecedented advances in civil rights have been made. The
long-standing and deep-seated problems of agriculture have been
forthrightly attacked.

This record of progress has been accomplished with a self-imposed
caution against unnecessary and unwise interference in the private
affairs of our people, of their communities and of the several
States.

If we of the Executive and Legislative Branches, keeping this caution
ever in mind, address ourselves to the business of the year before
us-- and to the unfinished business of last year--with resolution,
the outlook is bright with promise.

Many measures of great national importance recommended last year to
the Congress still demand immediate attention--legislation for school
and highway construction; health and immigration legislation; water
resources legislation; legislation to complete the implementation of
our foreign economic policy; such labor legislation as amendments of
the Labor-Management Relations Act, extension of the Fair Labor
Standards Act to additional groups not now covered, and occupational
safety legislation; and legislation for construction of an
atomic-powered exhibit vessel.

Many new items of business likewise require our attention-- measures
that will further promote the release of the energies of our people;
that will broaden opportunity for all of them; that will advance the
Republic in its leadership toward a just peace; measures, in short,
that are essential to the building of an ever-stronger, ever-better
America.

Every political and economic guide supports a valid confidence that
wise effort will be rewarded by an even more plentiful harvest of
human benefit than we now enjoy. Our resources are too many, our
principles too dynamic, our purposes too worthy and the issues at
stake too immense for us to entertain doubt or fear. But our
responsibilities require that we approach this year's business with a
sober humility.

A heedless pride in our present strength and position would blind us
to the facts of the past, to the pitfalls of the future. We must walk
ever in the knowledge that we are enriched by a heritage earned in the
labor and sacrifice of our forebears; that, for our children's
children, we are trustees of a great Republic and a time-tested
political system; that we prosper as a cooperating member of the
family of nations.

In this light the Administration has continued work on its program
for the Republic, begun three years ago. Because the vast spread of
national and human interests is involved within it, I shall not in
this Message attempt its detailed delineation. Instead, from time to
time during this Session, there will be submitted to the Congress
specific recommendations within specific fields. In the comprehensive
survey required for their preparation, the Administration is guided by
enduring objectives.

The first is:

THE DISCHARGE OF OUR WORLD RESPONSIBILITY

Our world policy and our actions are dedicated to the achievement of
peace with justice for all nations.

With this purpose, we move in a wide variety of ways and through many
agencies to remove the pall of fear; to strengthen the ties with our
partners and to improve the cooperative cohesion of the free world;
to reduce the burden of armaments, and to stimulate and inspire
action among all nations for a world of justice and prosperity and
peace. These national objectives are fully supported by both our
political parties.

In the past year, our search for a more stable and just peace has
taken varied forms. Among the most important were the two Conferences
at Geneva, in July and in the fall of last year. We explored the
possibilities of agreement on critical issues that jeopardize the
peace.

The July meeting of Heads of Government held out promise to the world
of moderation in the bitterness, of word and action, which tends to
generate conflict and war. All were in agreement that a nuclear war
would be an intolerable disaster which must not be permitted to
occur. But in October, when the Foreign Ministers met again, the
results demonstrated conclusively that the Soviet leaders are not yet
willing to create the indispensable conditions for a secure and
lasting peace.

Nevertheless, it is clear that the conflict between international
communism and freedom has taken on a new complexion. We know the
Communist leaders have often practiced the tactics of retreat and
zigzag. We know that Soviet and Chinese communism still poses a
serious threat to the free world. And in the Middle East recent
Soviet moves are hardly compatible with the reduction of
international tension.

Yet Communist tactics against the free nations have shifted in
emphasis from reliance on violence and the threat of violence to
reliance on division, enticement and duplicity. We must be well
prepared to meet the current tactics which pose a dangerous though
less obvious threat. At the same time, our policy must be dynamic as
well as flexible, designed primarily to forward the achievement of
our own objectives rather than to meet each shift and change on the
Communist front. We must act in the firm assurance that the fruits of
freedom are more attractive and desirable to mankind in the pursuit of
happiness than the record of Communism.

In the face of Communist military power, we must, of course, continue
to maintain an effective system of collective security. This involves
two things--a system which gives clear warning that armed aggression
will be met by joint action of the free nations, and deterrent
military power to make that warning effective. Moreover, the awesome
power of the atom must be made to serve as a guardian of the free
community and of the peace.

In the last year, the free world has seen major gains for the system
of collective security: the accession to the North Atlantic Treaty
Organization and Western European Union of the sovereign Federal
German Republic; the developing cooperation under the Southeast Asia
Collective Defense Treaty; and the formation in the Middle East of
the Baghdad Pact among Turkey, Iraq, Iran, Pakistan and the United
Kingdom. In our own hemisphere, the inter-American system has
continued to show its vitality in maintaining peace and a common
approach to world problems. We now have security pacts with more than
40 other nations.

In the pursuit of our national purposes, we have been steadfast in
our support of the United Nations, now entering its second decade
with a wider membership and ever-increasing influence and usefulness.
In the release of our fifteen fliers from Communist China, an
essential prelude was the world opinion mobilized by the General
Assembly, which condemned their imprisonment and demanded their
liberation. The successful Atomic Energy Conference held in Geneva
under United Nations auspices and our Atoms for Peace program have
been practical steps toward the world-wide use of this new energy
source. Our sponsorship of such use has benefited our relations with
other countries. Active negotiations are now in progress to create an
International Agency to foster peaceful uses of atomic energy.

During the past year the crucial problem of disarmament has moved to
the forefront of practical political endeavor. At Geneva, I declared
the readiness of the United States to exchange blueprints of the
military establishments of our nation and the U.S.S.R., to be
confirmed by reciprocal aerial reconnaissance. By this means, I felt
mutual suspicions could be allayed and an atmosphere developed in
which negotiations looking toward limitation of arms would have
improved chances of success.

In the United Nations Subcommittee on Disarmament last fall, this
proposal was explored and the United States also declared itself
willing to include reciprocal ground inspection of key points. By the
overwhelming vote of 56 to 7, the United Nations on December 16
endorsed these proposals and gave them a top priority. Thereby, the
issue is placed squarely before the bar of world opinion. We shall
persevere in seeking a general reduction of armaments under effective
inspection and control which are essential safeguards to ensure
reciprocity and protect the security of all. In the coming year much
remains to be done.

While maintaining our military deterrent, we must intensify our
efforts to achieve a just peace. In Asia we shall continue to give
help to nations struggling to maintain their freedom against the
threat of Communist coercion or subversion. In Europe we shall
endeavor to increase not only the military strength of the North
Atlantic Alliance but also its political cohesion and unity of
purpose. We shall give such assistance as is feasible to the recently
renewed effort of Western European nations to achieve a greater
measure of integration, such as in the field of peaceful uses of
atomic energy.

In the Near East we shall spare no effort in seeking to promote a
fair solution of the tragic dispute between the Arab States and
Israel, all of whom we want as our friends. The United States is
ready to do its part to assure enduring peace in that area. We hope
that both sides will make the contributions necessary to achieve that
purpose. In Latin America, we shall continue to cooperate vigorously
in trade and other measures designed to assist economic progress in
the area.

Strong economic ties are an essential element in our free world
partnership. Increasing trade and investment help all of us prosper
together. Gratifying progress has been made in this direction, most
recently by the three-year extension of our trade agreements
legislation.

I most earnestly request that the Congress approve our membership in
the Organization for Trade Cooperation, which would assist the
carrying out of the General Agreement on Tariffs and Trade to which
we have been a party since 1948. Our membership in the OTC will
provide the most effective and expeditious means for removing
discriminations and restrictions against American exports and in
making our trade agreements truly reciprocal. United States
membership in the Organization will evidence our continuing desire to
cooperate in promoting an expanded trade among the free nations. Thus
the Organization, as proposed, is admirably suited to our own
interests and to those of like-minded nations in working for steady
expansion of trade and closer economic cooperation. Being strictly an
administrative entity, the Organization for Trade Cooperation cannot,
of course, alter the control by Congress of the tariff, import, and
customs policies of the United States.

We need to encourage investment overseas by avoiding unfair tax
duplications, and to foster foreign trade by further simplification
and improvement of our customs legislation.

We must sustain and fortify our Mutual Security Program. Because the
conditions of poverty and unrest in less developed areas make their
people a special target of international communism, there is a need
to help them achieve the economic growth and stability necessary to
preserve their independence against communist threats and
enticements.

In order that our friends may better achieve the greater strength
that is our common goal, they need assurance of continuity in
economic assistance for development projects and programs which we
approve and which require a period of years for planning and
completion. Accordingly, I ask Congress to grant limited authority to
make longer-term commitments for assistance to such projects, to be
fulfilled from appropriations to be made in future fiscal years.

These various steps will powerfully strengthen the economic
foundation of our foreign policy. Together with constructive action
abroad, they will maintain the present momentum toward general
economic progress and vitality of the free world.

In all things, change is the inexorable law of life. In much of the
world the ferment of change is working strongly; but grave injustices
are still uncorrected. We must not, by any sanction of ours, help to
perpetuate these wrongs. I have particularly in mind the oppressive
division of the German people, the bondage of millions elsewhere, and
the exclusion of Japan from United Nations membership.

We shall keep these injustices in the forefront of human
consciousness and seek to maintain the pressure of world opinion to
right these vast wrongs in the interest both of justice and secure
peace.

Injustice thrives on ignorance. Because an understanding of the truth
about America is one of our most powerful forces, I am recommending a
substantial increase in budgetary support of the United States
Information Agency.

The sum of our international effort should be this: the waging of
peace, with as much resourcefulness, with as great a sense of
dedication and urgency, as we have ever mustered in defense of our
country in time of war. In this effort, our weapon is not force. Our
weapons are the principles and ideas embodied in our historic
traditions, applied with the same vigor that in the past made America
a living promise of freedom for all mankind.

To accomplish these vital tasks, all of us should be concerned with
the strength, effectiveness and morale of our State Department and
our Foreign Service.

Another guide in the preparation of the Administration's program is:

THE CONSTANT IMPROVEMENT OF OUR NATIONAL SECURITY

Because peace is the keystone of our national policy, our defense
program emphasizes an effective flexible type of power calculated to
deter or repulse any aggression and to preserve the peace. Short of
war, we have never had military strength better adapted to our needs
with improved readiness for emergency use.

The maintenance of this strong military capability for the indefinite
future will continue to call for a large share of our national budget.
Our military programs must meet the needs of today. To build less
would expose the nation to aggression. To build excessively, under
the influence of fear, could defeat our purposes and impair or
destroy the very freedom and economic system our military defenses
are designed to protect.

We have improved the effectiveness and combat readiness of our forces
by developing and making operational new weapons and by integrating
the latest scientific developments, including new atomic weapons,
into our military plans. We continue to push the production of the
most modern military aircraft. The development of long-range missiles
has been on an accelerated basis for some time. We are moving as
rapidly as practicable toward nuclear-powered aircraft and ships.
Combat capability, especially in terms of firepower, has been
substantially increased. We have made the adjustments in personnel
permitted by the cessation of the Korean War, the buildup of our
allies and the introduction of new weapons. The services are all
planning realistically on a long-term basis.

To strengthen our continental defenses the United States and Canada,
in the closest cooperation, have substantially augmented early
warning networks. Great progress is being made in extending
surveillance of the Arctic, the Atlantic and the Pacific approaches
to North America.

In the last analysis our real strength lies in the caliber of the men
and women in our Armed Forces, active and Reserve. Much has been done
to attract and hold capable military personnel, but more needs to be
done. This year, I renew my request of last year for legislation to
provide proper medical care for military dependents and a more
equitable survivors' benefit program. The Administration will prepare
additional recommendations designed to achieve the same objectives,
including career incentives for medical and dental officers and
nurses, and increases in the proportion of regular officers. Closely
related to the mission of the Defense Department is the task of the
Federal Civil Defense Administration. A particular point of
relationship arises from the fact that the key to civil defense is
the expanded continental defense program, including the distant early
warning system. Our Federal civil defense authorities have made
progress in their program, and now comprehensive studies are being
conducted jointly by the Federal Civil Defense Administration, the
States, and critical target case of an atomic attack. We must
strengthen Federal assistance to the States and cities in devising
the most effective common defense.

We have a broad and diversified mobilization base. We have the
facilities, materials, skills and knowledge rapidly to expand the
production of things we need for our defense whenever they are
required. But mobilization base requirements change with changing
technology and strategy. We must maintain flexibility to meet new
requirements. I am requesting, therefore, that the Congress once
again extend the Defense Production Act.

Of great importance to our nation's security is a continuing
alertness to internal subversive activity within or without our
government. This Administration will not relax its efforts to deal
forthrightly and vigorously in protection of this government and its
citizens against subversion, at the same time fully protecting the
constitutional rights of all citizens.

A third objective of the Administration is:

FISCAL INTEGRITY

A public office is, indeed, a public trust. None of its aspects is
more demanding than the proper management of the public finances. I
refer now not only to the indispensable virtues of plain honesty and
trustworthiness but also to the prudent, effective and conscientious
use of tax money. I refer also to the attitude of mind that makes
efficient and economical service to the people a watchword in our
government.

Over the long term, a balanced budget is a sure index to thrifty
management--in a home, in a business or in the Federal Government.
When achievement of a balanced budget is for long put off in a
business or home, bankruptcy is the result. But in similar
circumstances a government resorts to inflation of the money supply.
This inevitably results in depreciation of the value of the money,
and an increase in the cost of living. Every investment in personal
security is threatened by this process of inflation, and the real
values of the people's savings, whether in the form of insurance,
bonds, pension and retirement funds or savings accounts are thereby
shriveled.

We have made long strides these past three years in bringing our
Federal finances under control. The deficit for fiscal year 1953 was
almost 9 1/2 billion dollars. Larger deficits seemed
certain--deficits which would have depreciated the value of the
dollar and pushed the cost of living still higher. But government
waste and extravagance were searched out. Nonessential activities
were dropped. Government expenses were carefully scrutinized. Total
spending was cut by 14 billion dollars below the amount planned by
the previous Administration for the fiscal year 1954. This made
possible--and it was appropriate in the existing circumstances of
transition to a peacetime economy--the largest tax cut in any year in
our history. Almost 7 1/2 billion dollars were released and every
taxpayer in the country benefited. Almost two-thirds of the savings
went directly to individuals. This tax cut also helped to build up
the economy, to make jobs in industry and to increase the production
of the many things desired to improve the scale of living for the
great majority of Americans.

The strong expansion of the economy, coupled with a constant care for
efficiency in government operations and an alert guard against waste
and duplication, has brought us to a prospective balance between
income and expenditure. This is being done while we continue to
strengthen our military security.

I expect the budget to be in balance during the fiscal year ending
June 30, 1956.

I shall propose a balanced budget for the next fiscal year ending
June 30, 1957.

But the balance we are seeking cannot be accomplished without the
continuing every-day effort of the Executive and Legislative Branches
to keep expenditures under control. It will also be necessary to
continue all of the present excise taxes without any reduction and
the corporation income taxes at their present rates for another year
beyond next April 1st.

It is unquestionably true that our present tax level is very
burdensome and, in the interest of long term and continuous economic
growth, should be reduced when we prudently can. It is essential, in
the sound management of the Government's finances, that we be mindful
of our enormous national debt and of the obligation we have toward
future Americans to reduce that debt whenever we can appropriately do
so. Under conditions of high peacetime prosperity, such as now exist,
we can never justify going further into debt to give ourselves a tax
cut at the expense of our children. So, in the present state of our
financial affairs, I earnestly believe that a tax cut can be deemed
justifiable only when it will not unbalance the budget, a budget
which makes provision for some reduction, even though modest, in our
national debt. In this way we can best maintain fiscal integrity. A
fourth aim of our program is:

TO FOSTER A STRONG ECONOMY

Our competitive enterprise system depends on the energy of free human
beings, limited by prudent restraints in law, using free markets to
plan, organize and distribute production, and spurred by the prospect
of reward for successful effort. This system has developed our
resources. It has marvelously expanded our productive capacity.
Against the record of all other economic systems devised through the
ages, this competitive system has proved the most creative user of
human skills in the development of physical resources, and the
richest rewarder of human effort.

This is still true in this era when improved living standards and
rising national requirements are accompanied by swift advances in
technology and rapid obsolescence in machines and methods. Typical of
these are the strides made in construction of plants to produce
electrical energy from atomic power and of laboratories and
installations for the application of this new force in industry,
agriculture and the healing arts.

These developments make it imperative--to assure effective
functioning of our enterprise system--that the Federal Government
concern itself with certain broad areas of our economic life.

Most important of these is:

Agriculture

Our farm people are not sharing as they should in the general
prosperity. They alone of all major groups have seen their incomes
decline rather than rise. They are caught between two millstones--
rising production costs and declining prices. Such harm to a part of
the national economy so vitally important to everyone is of great
concern to us all. No other resource is so indispensable as the land
that feeds and clothes us. No group is more fundamental to our
national life than our farmers.

In successful prosecution of the war, the nation called for the
utmost effort of its farmers. Their response was superb, their
contribution unsurpassed. Farmers are not now to be blamed for the
mountainous, price-depressing surpluses produced in response to
wartime policies and laws that were too long continued. War markets
are not the markets of peacetime. Failure to recognize that basic
fact by a timely adjustment of wartime legislation brought its
inevitable result in peacetime--surpluses, lower prices and lower
incomes for our farmers.

The dimensions of government responsibility are as broad and complex
as the farm problem itself. We are here concerned not only with our
essential continuing supplies of food and fiber, but also with a way
of life. Both are indispensable to the well-being and strength of the
nation. Consideration of these matters must be above and beyond
politics. Our national farm policy, so vital to the welfare of farm
people and all of us, must not become a field for political warfare.
Too much is at stake.

Our farm people expect of us, who have responsibility for their
government, understanding of their problems and the will to help
solve them. Our objective must be to help bring production into
balance with existing and new markets, at prices that yield farmers a
return for their work in line with what other Americans get.

To reach this goal, deep-seated problems must be subjected to a
stepped-up attack. There is no single easy solution. Rather, there
must be a many-sided assault on the stubborn problems of surpluses,
prices, costs, and markets; and a steady, persistent, imaginative
advance in the relationship between farmers and their government.

In a few days, by special message, I shall lay before the Congress my
detailed recommendations for new steps that should be taken promptly
to speed the transition in agriculture and thus assist our farmers to
achieve their fair share of the national income.

Basic to this program will be a new attack on the surplus problem--
for even the best-conceived farm program cannot work under a
multi-billion dollar weight of accumulated stocks.

I shall urge authorization of a soil bank program to alleviate the
problem of diverted acres and an overexpanded agricultural plant.
This will include an acreage reserve to reduce current and
accumulated surpluses of crops in most serious difficulty, and a
conservation reserve to achieve other needed adjustments in the use
of agricultural resources. I shall urge measures to strengthen our
surplus disposal activities.

I shall propose measures to strengthen individual commodity programs,
to remove controls where possible, to reduce carryovers, and to stop
further accumulations of surpluses. I shall ask the Congress to
provide substantial new funds for an expanded drive on the research
front, to develop new markets, new crops, and new uses. The Rural
Development Program to better the lot of low-income farm families
deserves full Congressional support. The Great Plains Program must go
forward vigorously. Advances on these and other fronts will pull down
the price-depressing surpluses and raise farm income.

In this time of testing in agriculture, we should all together,
regardless of party, carry forward resolutely with a sound and
forward looking program on which farm people may confidently depend,
now and for years to come.

I shall briefly mention four other subjects directly related to the
well-being of the economy, preliminary to their fuller discussion in
the Economic Report and later communications.

Resources Conservation

I wish to re-emphasize the critical importance of the wise use and
conservation of our great natural resources of land, forests,
minerals and water and their long-range development consistent with
our agricultural policy. Water in particular now plays an increasing
role in industrial processes, in the irrigation of land, in electric
power, as well as in domestic uses. At the same time, it has the
potential of damage and disaster.

A comprehensive legislative program for water conservation will be
submitted to the Congress during the Session. The development of our
water resources cannot be accomplished overnight. The need is such
that we must make faster progress and without delay. Therefore, I
strongly recommend that action be taken at this Session on such
wholly Federal projects as the Colorado River Storage Project and the
Fryingpan-Arkansas Project; on the John Day partnership project, and
other projects which provide for cooperative action between the
Federal Government and non-Federal interests; and on legislation,
which makes provision for Federal participation in small projects
under the primary sponsorship of agencies of State and local
government. During the past year the areas of our National Parks have
been expanded, and new wildlife refuges have been created. The visits
of our people to the Parks have increased much more rapidly than have
the facilities to care for them. The Administration will submit
recommendations to provide more adequate facilities to keep abreast
of the increasing interest of our people in the great outdoors.
Disaster Assistance

A modern community is a complex combination of skills, specialized
buildings, machines, communications and homes. Most importantly, it
involves human lives. Disaster in many forms--by flood, frost, high
winds, for instance--can destroy on a massive scale in a few hours
the labor of many years.

Through the past three years the Administration has repeatedly moved
into action wherever disaster struck. The extent of State
participation in relief activities, however, has been far from
uniform and, in many cases, has been either inadequate or
nonexistent. Disaster assistance legislation requires overhauling and
an experimental program of flood-damage indemnities should be
undertaken. The Administration will make detailed recommendations on
these subjects.

Area Redevelopment

We must help deal with the pockets of chronic unemployment that here
and there mar the nation's general industrial prosperity. Economic
changes in recent years have been often so rapid and far-reaching
that areas committed to a single local resource or industrial
activity have found themselves temporarily deprived of their markets
and their livelihood.

Such conditions mean severe hardship for thousands of people as the
slow process of adaptation to new circumstances goes on. This process
can be speeded up. Last year I authorized a major study of the problem
to find additional steps to supplement existing programs for the
redevelopment of areas of chronic unemployment. Recommendations will
be submitted, designed to supplement, with Federal technical and loan
assistance local efforts to get on with this vital job. Improving such
communities must, of course, remain the primary responsibility of the
people living there and of their States. But a soundly conceived
Federal partnership program can be of real assistance to them in
their efforts.

Highway Legislation

Legislation to provide a modern, interstate highway system is even
more urgent this year than last, for 12 months have now passed in
which we have fallen further behind in road construction needed for
the personal safety, the general prosperity, the national security of
the American people. During the year, the number of motor vehicles has
increased from 58 to 61 million. During the past year over 38,000
persons lost their lives in highway accidents, while the fearful toll
of injuries and property damage has gone on unabated.

In my message of February 22, 1955, I urged that measures be taken to
complete the vital 40,000 mile interstate system over a period of 10
years at an estimated Federal cost of approximately 25 billion
dollars. No program was adopted.

If we are ever to solve our mounting traffic problem, the whole
interstate system must be authorized as one project, to be completed
approximately within the specified time. Only in this way can
industry efficiently gear itself to the job ahead. Only in this way
can the required planning and engineering be accomplished without the
confusion and waste unavoidable in a piecemeal approach. Furthermore,
as I pointed out last year, the pressing nature of this problem must
not lead us to solutions outside the bounds of sound fiscal
management. As in the case of other pressing problems, there must be
an adequate plan of financing. To continue the drastically needed
improvement in other national highway systems, I recommend the
continuation of the Federal Aid Highway Program.

Aside from agriculture and the four subjects specifically mentioned,
an integral part of our efforts to foster a strong and expanding free
economy is keeping open the door of opportunity to new and small
enterprises, checking monopoly, and preserving a competitive
environment. In this past year the steady improvement in the economic
health of small business has reinforced the vitality of our
competitive economy. We shall continue to help small business
concerns to obtain access to adequate financing and to competent
counsel on management, production, and marketing problems.

Through measures already taken, opportunities for small-business
participation in government procurement programs, including military
procurement, are greatly improved. The effectiveness of these
measures will become increasingly apparent. We shall continue to make
certain that small business has a fair opportunity to compete and has
an economic environment in which it may prosper.

In my message last year I referred to the appointment of an advisory
committee to appraise and report to me on the deficiencies as well as
the effectiveness of existing Federal transportation policies. I have
commended the fundamental purposes and objectives of the committee's
report. I earnestly recommend that the Congress give prompt attention
to the committee's proposals.

Essential to a prosperous economic environment for all business,
small and large--for agriculture and industry and commerce--is
efficiency in Government. To that end, exhaustive studies of the
entire governmental structure were made by the Commission on
Intergovernmental Relations and the Commission on the Organization of
the Executive Branch of the Government--the reports of these
Commissions are now under intensive review and already in the process
of implementation in important areas.

One specific and most vital governmental function merits study and
action by the Congress. As part of our program of promoting
efficiency in Government and getting the fiscal situation in hand,
the Post Office Department in the past three years has been
overhauled. Nearly one thousand new post offices have been provided.
Financial practices have been modernized, and transportation and
operating methods are being constantly improved. A new wage and
incentive plan for the half million postal employees has been
established. Never before has the postal system handled so much mail
so quickly and so economically. The Post Office Department faces two
serious problems. First, much of its physical plant--post offices and
other buildings--is obsolete and inadequate. Many new buildings and
the modernization of present ones are essential if we are to have
improved mail service. The second problem is the Department's fiscal
plight. It now faces an annual deficit of one-half billion dollars.

Recommendations on postal facilities and on additional postal
revenues will be submitted to the Congress.

A final consideration in our program planning is:

THE RESPONSE TO HUMAN CONCERNS

A fundamental belief shines forth in this Republic. We believe in the
worth and dignity of the individual. We know that if we are to govern
ourselves wisely--in the tradition of America--we must have the
opportunity to develop our individual capacities to the utmost.

To fulfill the individual's aspirations in the American way of life,
good education is fundamental. Good education is the outgrowth of
good homes, good communities, good churches, and good schools. Today
our schools face pressing problems--problems which will not yield to
swift and easy solutions, or to any single action. They will yield
only to a continuing, active, informed effort by the people toward
achieving better schools.

This kind of effort has been spurred by the thousands of conferences
held in recent months by half a million citizens and educators in all
parts of the country, culminating in the White House Conference on
Education. In that Conference, some two thousand delegates, broadly
representative of the nation, studied together the problems of the
nation's schools.

They concluded that the people of the United States must make a
greater effort through their local, State, and Federal Governments to
improve the education of our youth. This expression from the people
must now be translated into action at all levels of government.

So far as the Federal share of responsibility is concerned, I urge
that the Congress move promptly to enact an effective program of
Federal assistance to help erase the existing deficit of school
classrooms. Such a program, which should be limited to a five-year
period, must operate to increase rather than decrease local and State
support of schools and to give the greatest help to the States and
localities with the least financial resources. Federal aid should in
no way jeopardize the freedom of local school systems. There will be
presented to the Congress a recommended program of Federal assistance
for school construction.

Such a program should be accompanied by action to increase services
to the nation's schools by the Office of Education and by legislation
to provide continuation of payments to school districts where Federal
activities have impaired the ability of those districts to provide
adequate schools.

Under the 1954 Amendments to the old-age and survivors' insurance
program, protection was extended to some 10 million additional
workers and benefits were increased. The system now helps protect 9
out of 10 American workers and their families against loss of income
in old age or on the death of the breadwinner. The system is sound.
It must be kept so. In developing improvements in the system, we must
give the most careful consideration to population and social trends,
and to fiscal requirements. With these considerations in mind, the
Administration will present its recommendations for further expansion
of coverage and other steps which can be taken wisely at this time.

Other needs in the area of social welfare include increased child
welfare services, extension of the program of aid to dependent
children, intensified attack on juvenile delinquency, and special
attention to the problems of mentally retarded children. The training
of more skilled workers for these fields and the quest for new
knowledge through research in social welfare are essential. Similarly
the problems of our aged people need our attention.

The nation has made dramatic progress in conquering disease--
progress of profound human significance which can be greatly
accelerated by an intensified effort in medical research. A
well-supported, well-balanced program of research, including basic
research, can open new frontiers of knowledge, prevent and relieve
suffering, and prolong life. Accordingly I shall recommend a
substantial increase in Federal funds for the support of such a
program. As an integral part of this effort, I shall recommend a new
plan to aid construction of non-Federal medical research and teaching
facilities and to help provide more adequate support for the training
of medical research manpower.

Finally, we must aid in cushioning the heavy and rising costs of
illness and hospitalization to individuals and families. Provision
should be made, by Federal reinsurance or otherwise, to foster
extension of voluntary health insurance coverage to many more
persons, especially older persons and those in rural areas. Plans
should be evolved to improve protection against the costs of
prolonged or severe illness. These measures will help reduce the
dollar barrier between many Americans and the benefits of modern
medical care. The Administration health program will be submitted to
the Congress in detail.

The response of government to human concerns embraces, of course,
other measures of broad public interest, and of special interest to
our working men and women. The need still exists for improvement of
the Labor Management Relations Act. The recommendations I submitted
to the Congress last year take into account not only the interests of
labor and management but also the public welfare. The needed
amendments should be enacted without further delay.

We must also carry forward the job of improving the wage-hour law.
Last year I requested the Congress to broaden the coverage of the
minimum wage. I repeat that recommendation, and I pledge the full
resources of the Executive Branch to assist the Congress in finding
ways to attain this goal. Moreover, as requested last year,
legislation should be passed to clarify and strengthen the eight-hour
laws for the benefit of workers who are subject to Federal wage
standards on Federal and Federally-assisted construction and other
public works.

The Administration will shortly propose legislation to assure
adequate disclosure of the financial affairs of each employee pension
and welfare plan and to afford substantial protection to their
beneficiaries in accordance with the objectives outlined in my
message of January 11, 1954. Occupational safety still demands
attention, as I pointed out last year, and legislation to improve the
Longshoremen's and Harbor Workers' Compensation Act is still needed.
The improvement of the District of Columbia Unemployment Insurance
Law and legislation to provide employees in the District with
non-occupational disability insurance are no less necessary now than
12 months ago. Legislation to apply the principle of equal pay for
equal work without discrimination because of sex is a matter of
simple justice. I earnestly urge the Congress to move swiftly to
implement these needed labor measures.

In the field of human needs, we must carry forward the housing
program, which is contributing so greatly to the well-being of our
people and the prosperity of our economy. Home ownership is now
advanced to the point where almost three of every five families in
our cities, towns, and suburbs own the houses they live in.

For the housing program, most of the legislative authority already
exists. However, a firm program of public housing is essential until
the private building industry has found ways to provide more adequate
housing for low-income families. The Administration will propose
authority to contract for 35 thousand additional public housing units
in each of the next 2 fiscal years for communities which will
participate in an integrated attack on slums and blight.

To meet the needs of the growing number of older people, several
amendments to the National Housing Act will be proposed to assist the
private homebuilding industry as well as charitable and non-profit
organizations.

With so large a number of the American people desiring to modernize
and improve existing dwellings, I recommend that the Title I program
for permanent improvements in the home be liberalized.

I recommend increases in the general FHA mortgage insurance
authority; the extension of the FHA military housing program; an
increase in the authorization for Urban Planning grants; in the
special assistance authority of the Federal National Mortgage
Association; and continued support of the college housing program in
a way that will not discourage private capital from helping to meet
the needs of our colleges.

The legislation I have recommended for workers in private industry
should be accompanied by a parallel effort for the welfare of
Government employees. We have accomplished much in this field,
including a contributory life insurance program; equitable pay
increases and a fringe benefits program, covering many needed
personnel policy changes, from improved premium pay to a meaningful
incentive award program.

Additional personnel management legislation is needed in this
Session. As I stated last year, an executive pay increase is
essential to efficient governmental management. Such an increase,
together with needed adjustments in the pay for the top career
positions, is also necessary to the equitable completion of the
Federal pay program initiated last year. Other legislation will be
proposed, including legislation for prepaid group health insurance
for employees and their dependents and to effect major improvements
in the Civil Service retirement system.

All of us share a continuing concern for those who have served this
nation in the Armed Forces. The Commission on Veterans Pensions is at
this time conducting a study of the entire field of veterans' benefits
and will soon submit proposed improvements.

We are proud of the progress our people have made in the field of
civil rights. In Executive Branch operations throughout the nation,
elimination of discrimination and segregation is all but completed.
Progress is also being made among contractors engaged in furnishing
Government services and requirements. Every citizen now has the
opportunity to fit himself for and to hold a position of
responsibility in the service of his country. In the District of
Columbia, through the voluntary cooperation of the people,
discrimination and segregation are disappearing from hotels,
theaters, restaurants and other facilities.

It is disturbing that in some localities allegations persist that
Negro citizens are being deprived of their right to vote and are
likewise being subjected to unwarranted economic pressures. I
recommend that the substance of these charges be thoroughly examined
by a Bipartisan Commission created by the Congress. It is hoped that
such a commission will be established promptly so that it may arrive
at findings which can receive early consideration.

The stature of our leadership in the free world has increased through
the past three years because we have made more progress than ever
before in a similar period to assure our citizens equality in
justice, in opportunity and in civil rights. We must expand this
effort on every front. We must strive to have every person judged and
measured by what he is, rather than by his color, race or religion.
There will soon be recommended to the Congress a program further to
advance the efforts of the Government, within the area of Federal
responsibility, to accomplish these objectives.

One particular challenge confronts us. In the Hawaiian Islands, East
meets West. To the Islands, Asia and Europe and the Western
Hemisphere, all the continents, have contributed their peoples and
their cultures to display a unique example of a community that is a
successful laboratory in human brotherhood.

Statehood, supported by the repeatedly expressed desire of the
Islands' people and by our traditions, would be a shining example of
the American way to the entire earth. Consequently, I urgently
request this Congress to grant statehood for Hawaii.

Also, in harmony with the provisions I last year communicated to the
Senate and House Committees on Interior and Insular Affairs, I trust
that progress toward statehood for Alaska can be made in this
Session.

Progress is constant toward full integration of our Indian citizens
into normal community life. During the past two years the
Administration has provided school facilities for thousands of Indian
children previously denied this opportunity. We must continue to meet
the needs of increased numbers of Indian children. Provision should
also be made for the education of adult Indians whose schooling in
earlier years was neglected.

In keeping with our responsibility of world leadership and in our own
self interest, I again point out to the Congress the urgent need for
revision of the immigration and nationality laws. Our nation has
always welcomed immigrants to our shores. The wisdom of such a policy
is clearly shown by the fact that America has been built by immigrants
and the descendants of immigrants. That policy must be continued
realistically with present day conditions in mind.

I recommend that the number of persons admitted to this country
annually be based not on the 1920 census but on the latest, the 1950
census. Provision should be made to allow for greater flexibility in
the use of quotas so if one country does not use its share, the
vacancies may be made available for the use of qualified individuals
from other countries.

The law should be amended to permit the Secretary of State and the
Attorney General to waive the requirements of fingerprinting on a
reciprocal basis for persons coming to this country for temporary
visits. This and other changes in the law are long overdue and should
be taken care of promptly. Detailed recommendations for revision of
the immigration laws will be submitted to the Congress.

I am happy to report substantial progress in the flow of immigrants
under the Refugee Relief Act of 1953; however, I again request this
Congress to approve without further delay the urgently needed
amendments to that act which I submitted in the last Session. Because
of the high prosperity in Germany and Austria, the number of
immigrants from those countries will be reduced. This will make
available thousands of unfilled openings which I recommend be
distributed to Greece and Italy and to escapees from behind the Iron
Curtain.

Once again I ask the Congress to join with me in demonstrating our
belief in the right of suffrage. I renew my request that the
principle of self-government be extended and the right of suffrage
granted to the citizens of the District of Columbia.

To conclude: the vista before us is bright. The march of science, the
expanding economy, the advance in collective security toward a just
peace--in this threefold movement our people are creating new
standards by which the future of the Republic may be judged.

Progress, however, will be realized only as it is more than matched
by a continuing growth in the spiritual strength of the nation. Our
dedication to moral values must be complete in our dealings abroad
and in our relationships among ourselves. We have single-minded
devotion to the common good of America. Never must we forget that
this means the well-being, the prosperity, the security of all
Americans in every walk of life.

To the attainment of these objectives, I pledge full energies of the
Administration, as in the Session ahead, it works on a program for
submission to you, the Congress of the United States.