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PUBLIC PAPERS OF THE OF TH E UN ITED PRESIDEN TS STATES Harry S. Truman Containing the Public Messages, Speechesj and Statements of the President JANUARY I TO DECEMBER 31, I949 19 4 9 UNITED STATES GOVERNMENT WASHINGTON : PRINTING I 964 OFFICE Harry S. Truman, July 19/f.g 13 [154] your side o f dispute to the board I am ap present yo u r side o f dispute to the board I pointing in order that recom m endations as am app ointin g. to fair and equitable terms o f settlem ent m ay be made. I hope these recom m endations can form the basis fo r fin al agreem en t be tween the parties. H arry S. Truman Ben Moreell, President, Jones and Laughlin Steel Corporation. T h an k you fo r yo u r telegram o f July 12 and for your w illin gn ess to cooperate in the public interest. I hope and believe final agreement can be reached w ith in the sixty day period. H arry S. Truman Philip Murray, President, United Steelworkers of America. T h an k you fo r yo u r telegram in fo rm in g me of the action o f yo u r p olicy com m ittee in accepting m y proposal to continue w o r k and H arry S. Truman n o t e : In response to the President’s telegrams of July 12 and 13, the presidents of the U.S. Steel Corporation, the Republic Steel Corporation, and the Bethlehem Steel Corporation sent telegrams in which they stated strong objections to the appoint ment of a board with power to make recommenda tions as opposed to a board appointed under the TaftHartley Act, which would be limited to factfinding. However, the three companies agreed to cooperate with the President’s board with the understanding that there would be no obligation on their part to accept any recommendations which the board might make. The presidents of the Youngstown Sheet and Tube Company and of the Wheeling Steel Corpora tion expressed similar objections but stated that they would continue operations. The president of the Jones and Laughlin Steel Corporation merely stated that he would continue operations for a period of 60 days as requested by the President. The president of the United Steelworkers stated that the union would continue operations during the period in which the collective bargaining agreements were in cffect and that he would cooperate with the board appointed by the President. 154 Radio and Television Report to the American People on the State of the National Economy. July 13, 1949 [ D elivered fro m the W h ite H o u se at 10:30 p.m . ] report, and also abou t the F ed eral budget, My fellow citizens: I w an t to ta lk to y o u to n ig h t about our country, about its fu tu re, and about its im portance to the hopes and aspirations o f all con cern in g w h ich there has recently been m u ch discussion. T h e history o f the U n ited States is a story o f constant econom ic g ro w th and expansion. mankind. It is a good th in g to stop and th in k about W h e n I w as a y o u n g m an, the p opu lation o f where w e are, w h ere w e are g o in g , and the U n ited States w as betw een 90 and 100 what our national aim s and objectives should m illion people. be. lion. T h e elected representatives o f the peo T o d a y it is n early 150 m il F o rty years ago, the national incom e— ple, and p articularly their President, have the total o f all the incom e received by all the a duty to report fro m tim e to tim e on these people o f the U n ited States— w as in the basic questions. n eighborhood o f $30 billion. O n M on day I sent the M id year E con om ic Report to the C on gress. T o n ig h t I w an t to tell you som ethin g about w h a t w as in that T o d a y , the national incom e is w ell over $200 billion. It has increased m ore than 10 tim es as fast as the population. 369 [154] Public Papers of the Presidents July 13 T h e se figu res are a m easure o f o u r risin g people w ith o u t jobs is substantially larger standard o f liv in g — our in creasin g freedom than it w as a year ago. fro m toil and poverty. T h e y are the result tim e, the n um ber o f people o u t o f w o r k was o f constant expansion in agricu ltu re and as lo w as w e can expect it to be in peacetim e. in dustry. It w as a little o ver 2 m illio n . In fact, unless w e d o exp and our produc tion steadily, w e ru n into econom ic diffi culties. W e cannot stand still. W e m ust L a st year at this N o w , the n um ber out o f w o r k is alm ost 4 m illion. W h ile m u ch o f this un em ploym en t is tem porary and is part o f the n orm al process o f ch a n g in g jobs, there are substantial num bers exp and if w e are to stay prosperous. A little m ore than 10 years a go President o f people w h o have been o u t o f w o rk for R oosevelt called fo r a national in com e o f som e tim e, and $100 billion a year. hardship. T h is w as a surprisin g who are now suffering fig u re w h e n he m entioned it, but w e have A s to p roduction, the o u tp ut o f all goods fa r surpassed it in the space o f 10 years. O u r and services declined sligh tly d u rin g the first national in com e last year w as $225 billion. h a lf o f this year. I f w e could m ake such progress in the past, w e can g o on m a k in g it in the fu tu re. Be fo re lo n g, o u r national in com e should reach a total o f $300 billion or m ore. In som e types o f business, there has been n o decline at all. In others there have been sligh t increases. In m anu factu rin g, h o w ever, the o u tp u t in June had dropped 13 percent fro m the h ig h point of B u t i f w e w a n t to reach that go a l, w e all last N o vem b er. h ave to have som e hard w o rk ahead o f us. In the E con om ic M essage in January, I W e shall have to m ake w ise decisions about said that w e should strive fo r a 3 or 4 percent o u r national policies. increase in total o u tp u t this year if w e were A n d w e shall have to be sure that the selfish interests do not to m aintain m a xim u m production and em d rive us into the ditch, as they have done ploym en t. before. w h at b elo w last year’s level. A t the present tim e, there is a drop in em ploym ent and in production in certain lines. I have been concerned about this and I have studied the facts carefu lly. I w an t to tell you w h at those facts are. A s to em ploym ent, w e have n ow m ore Instead, w e have fallen some T h e se are the facts. I am not coloring them one w a y o r the other. N o w , som e people are sayin g, and saying very lo u d ly, that these facts m ean that w e are in a depression. M a n y o f these people, fo r p olitical reasons, w o u ld lik e to have a than 59^4 m illio n people w o r k in g in civilian depression. jobs. T h is is a trem endous n um ber, but n o th in g to w o rry about, and that an increase last year at this tim e w e had a little over 61 in the n um ber lo o k in g fo r w o r k is a good m illio n em ployed . F u rth erm o re, there are m ore people lo o k in g fo r jobs this year, be cause about a m illio n y o u n g people and vet th in g . O th ers are sayin g that there is T h is attitude ign ores the human su fferin g caused by un em ploym en t. B o th groups are w ro n g . W e are not in erans have becom e available fo r em ploym ent a depression. fo r the first tim e. o f people out o f w o rk is so m eth in g to w orry B u t an increase in the number C o n sequen tly, a lth ou gh the n um ber o f about, and is so m eth in g that m ust be cured. people w ith jobs is ve ry h ig h , the n um ber of I f w e w ere in a depression, I w ou ld be http://fraser.stlouisfed.org/ 370 Federal Reserve Bank of St. Louis July Harry S. Truman, ig^g 13 [154] the first person to tell you, and I w o u ld call passed, have proved their value in protectin g upon all the resources o f this N a tio n to th e econom y. stop it. F urth erm ore, all gro u p s in the N a tio n W h at w e face today is not a depression, h ave gain ed a better un derstan din g o f eco and if w e fo llo w the rig h t course, it w ill not nom ic problem s since the 1920’$, and this become a depression. We are g o in g un derstan din g, on the part o f businessm en, th rou gh an econom ic change w h ich is the result o f the inflationary spiral that w e w ere in un til a fe w m onths ago. I w arn ed repeatedly against the dan consum ers, and labor, has helped to cushion the process o f price change. N o w all o f us— business, labor, agricu ltu re, and G o vern m en t— m ust take positive action gers o f this inflation, and I asked the C o n together to restore the u p w ard trend. gress tim e and tim e again to take steps to decisions w e m ake in the n ext fe w m onths curb the excessive rise in prices. I did this because I k n e w that if prices w en t too h ig h , they w ou ld topple o ver and b rin g about a decline in p roduction and em ploym ent. not accepted. can p ro lo n g the present decline, or they can turn it in to an u p sw in g. O u r go al is m a xim u m em ploym en t and p roduction . U n fortun ately, m y recom m endations w ere Prices continued to clim b. The T h e only w a y to reach this goal is to increase o u r econom ic activity. T h e needs o f o u r people are constantly g ro w A s the m ost u rgen t needs o f the people and in g . of industry w ere satisfied, these h ig h prices year brin gs fo rth n ew in ventions and tech cut d o w n the sale o f goods. niques, n e w opportunities fo r im p rovem en t production declined. A s a result, Prices are n o w fin d in g more reasonable levels— a fact w h ich should stimulate sales and p roduction again. O ur skills in creasin g. E ve ry and developm ent. T h e tools are at han d fo r con tin ued eco nom ic expansion. In this period o f chan ge, o u r national are A ll w e need is the cour age to use them . economy is protected by im portan t econom ic Businessm en should take advan tage n o w reforms w h ich the G o vern m en t has adopted o f opportunities fo r m o d e rn izin g their plants over the last 16 years. U n em p lo ym en t in and fo r n ew business investm ent, and to surance and social security are h e lp in g people geth er w ith labor should cooperate in ach iev w ho are o u t o f w o rk , and are h e lp in g to in g maintain consum er p urch asin g p ow er. F arm production should con tin ue at h ig h The farm price support p ro gram is k e ep in g a g ri culture on a fairly even keel. h ig h er production and em ploym ent. levels. T h e insur T h e G o vern m en t likew ise m ust direct its ance o f b a n k deposits protects us against policies to w ard continued econom ic exp an bank runs. sion. O u r controls over the m ark etin g and exch an ge o f securities prevent w ild speculative sprees and stock m a rk et crashes. T h e coun try is g r o w in g and w e need to preserve and develop our n atural resources fo r this generation and the next. W e m ust Because o f these and other G o vern m en t therefore press fo rw ard w ith p rogram s o f policies, w e have suffered far less in this soil conservation, and riv er valley develop period o f d eclin in g prices than w e ever have m ent, and other p u blic w o rk s. in a sim ilar period before. T h e se G o ve rn E con om ic expansion requires constandy m ent m easures, all o f w h ich w ere bitterly risin g liv in g standards fo r o u r people. opposed by selfish interests w h en they w ere m ust therefore expand o u r program s o f so 371 We [154] Public Papers of the Presidents July 13 cial security, education, health, and housin g. I f w e exam in e the item s in the budget, we W e m ust bu ild , as w e are b u ild in g, fo r the see, in dollar figures, the m a gn itu d e o f the fu tu re. task w h ich confronts this N a tio n in pro T h e re are m en o f little vision w h o say w e ou g h t not to g o on d o in g these thin gs. say they cost too m u ch . They T h e y say w e are O v e r three-fourths o f the b u d g et is due to international events. L ess than one-fourth arises fro m the dom estic fun ction s o f the w a stin g m on ey. T h e tru th is that an in vestm ent in the fu tu re o f this great N a tio n is not a w aste o f m on ey. tectin g the cause o f peace and freedom . T h e dollars w e put in to o u r rivers G o vern m en t. L e t m e exp lain to yo u w h y this is so. T h e total o f the w h o le b u d g et today is and o u r p ow erp lan ts w ill be repaid to us in about $42 billio n . fru itfu l valleys and prosperous com m unities. is the result o f either past w ars or our efforts O f this total, $32 billion E xpen ditu res fo r the health and education to prevent another w ar. o f o u r ch ild ren w ill yield us un told dividen ds m a k e u p this $32 billion. in h u m an happiness. T h r e e b ig items T h e first is national defense. B u t, say those w h o object, lo o k at the size o f the bu d get. counts fo r over $14 billion. T h a t ac T h e armed services, at the start o f this year, w anted a A ll rig h t, let’s lo o k at the budget. m u ch b ig g er sum than that, bu t I cut it down T h e b u d get includes the cost o f alm ost eve ry th in g the G o vern m en t does. It is not to th e m in im u m necessary fo r o u r protec tion an d fo r the preservation o f peace in this sim p ly the p ayroll o f F ed eral em ployees, as troubled w o rld . som e people appear to th in k . In fact, the the forces necessary to prevent w ar, but in p ay o f F ed eral civilian em ployees is only the lo n g run it could be a lot m ore expensive about 12 percent o f the budget. not to have them . T h e budget includes all F ed eral expenses fo r national It is expensive to keep up T h e second item is the cost o f our inter defense, fo r international aid, and fo r the national program s. con duct o f the affairs o f this N a tio n abroad. about $7 billion, and th ey are w orth every It includes F ed eral aid to the States, for p en n y o f it. roads and health and other p rogram s. the E uropean recovery p ro gram and our It T h e y w ill cost this year T h is sum includes the cost of includes atom ic en ergy, and dam s, and soil occupation conservation and flood control, and m any gram s have kep t W estern E urope out o f the other things essential to the g ro w th o f our hands o f the C o m m u nists, and are helping country. responsibilities. T h e se pro to restore the econom ic and social strength T h e se thin gs are necessary, bu t in the o f the free nations. I f w e w ere to cut present b u d g et w e have not provid ed extrav these program s, it w o u ld w eaken our efforts a ga n tly fo r them . for peace. L e t m e m ake it clear that T h a t i? a risk w e m ust not take. I believe in p rud en t financial m anagem ent. T h e se tw o item s, national defense and T h a t has been rrly rule in m y private life and in tern ation al aid, add up to $21 billion— in m y public life. m ore than h a lf the budget. I am w o r k in g fo r the T h e se are the reo rgan izatio n and better m anagem en t o f expenditures we the G o vern m en t to achieve greater efficiency. fu tu re w ars. If an ybody th in ks it extrava I believe in the econom ical use o f the p u b lic’s gan t to m aintain the peace, let him remem are m a k in g to prevent m on ey— and the bu d get is based on that ber that it cost us not $21 billion a year but principle. $100 billion a year to con duct the last war. http://fraser.stlouisfed.org/ 372Bank of St. Louis Federal Reserve July H a rry S. Trum an, 1949 I do n ot believe that o u r defense and 13 [154] so that w e could have a sm all b u d g et again. international expenditures w ill have to re T h e leaders o f the un lam en ted 80th C o n m ain at their present h ig h level indefinitely. gress th o u gh t that they could w ish the facts I hope that they m ay be reduced as our pro aw ay. gram fo r peace takes effect. duction against m y advice and over m y veto. B ut, as o f to T h e y insisted on passing a tax re day, I regard these expenditures as the m ost I w arn ed that this tax cut o f $5 billion w as valuable insurance w e can take out against alm ost certain to produce a deficit. the enorm ous expense and the terrible loss produce a deficit. o f another w ar. 1, 1949, the deficit w as $1,800 m illio n . T h e third b ig item includes interest on It did F o r the year e n d in g July T h e econom y w as ru n n in g at a h ig h level G overn m en t bonds and benefits fo r veterans. w h en T o geth er these expenses People then could pay the taxes necessary to billion. total about $11 I d o n ’t believe anybody has sug this u n tim ely tax cut w as m ade. balance the bu d get and to provid e a surplus gested that w e d efau lt on our G o vern m en t fo r debt reduction. bonds or that w e default on our obligations and incom es have fallen, taxes b rin g in less to our veterans by cu ttin g this item . m on ey. T h ese are the costs o f past w ars. T o d a y , because profits A n increase in taxes n o w m ig h t To bear too heavily on business and discourage gether w ith the $21 billion fo r p reven tin g the investm ent necessary to fu ll production future w ars, they add u p to $32 billion, m ore and fu ll em ploym ent. than three-fourths o f the budget. A t this tim e, therefore, I am not recom T h e rem ain in g $10 billion o f the budget m e n d in g n ew taxes to m a k e u p the deficit. provides fo r all other fun ction s o f the G o v I do not lik e to have a G o vern m en t deficit. ernm ent. B u t still less do I w a n t to in ju re the eco T h e m ajor item s in this category are public w o rk s, farm price supports, e d u cation, h o u sin g p rogram s, and for health and social security. paym ents F o r a coun n om ic health o f this country. Selfish interests w ere behin d the tax re duction o f the 80th C on gress. T h e y w ere try the size o f ours, w ith a $200 billion also behind the failu re to provid e authority econom y, $10 billion fo r such essential pro to stabilize prices. gram s is a reasonable, a very reasonable sum the selfish interests have had un fortun ate indeed. econom ic T o d a y , after a large increase in popula tion and in spite o f risin g prices, this part T h e se tw o blunders o f consequences. They w ill con tinu e to cause us trouble fo r som e tim e. N o w these sam e selfish interests are u rg in g of the b u d g et is o n ly 50 percent greater than us to co m m it a th ird grea t blun der. it w as 10 years a go . are n o w u r g in g drastic cuts in G o vern m en t T h e other part o f the They budget— the cost o f past w ars and o f pre expenditures— cuts w h ich w o u ld fa ll hardest ven tin g fu tu re w ars— is the part that has on those expenditures w h ich are m ost im show n such a trem endous increase. p ortant to our dom estic econom y. T h is part o f the b u d g et is 900 percent greater than it w as 10 years ago. T h e size o f the b u d g et reflects the w o rld w e are liv in g in. M a k in g cuts o f this type in the b u d g et is just the th in g you d o not do if you w a n t to W e have to face the facts of the w o rld o f today. It does no go o d to help the econom y expand. A t a tim e w h en em ploym ent is already lo w er than it should be, cu ttin g G o vern m en t expen ditures w o u ld retire into the w o rld o f the past and to w ish cause that som eh ow the facts w ou ld just g o aw ay, w hen m ore investm ent is needed, it w o u ld m ore un em ploym en t. At a 373 tim e [154] Public Papers of the Presidents July 13 be foolish to cu t d o w n productive G o ve rn try— they are necessary if w e are to balance m en t in vestm ent in national resources and the budget. public w o rk s. To slash G o vern m en t ex p enditures n o w , w o u ld add to the d o w n w ard trend. The very heart o f sound G o vern m en t finance is to m a k e the expenditures th at are necessary to help achieve prosperity and L e t us take p u blic w o rk s, fo r exam ple. It peace. T h e item s in the bu d get are con has been estim ated that every billion dollars sistent w ith this p rin ciple. spent fo r p u blic w o rk s gives em ploym ent to C on gress, in co n sid erin g the details o f the 315,000 people, and adds to the incom e, in budget, has not m ade sign ifican t cuts. directly, o f som e 700,000 m ore. T h e cur has approved the particulars o f the budget, rent b u d g et provides m ore than $3 billion item by item , because the C on gress kn o w s fo r p ublic w o rk s. they are good fo r the country. T h e se p ublic w orks are greatly needed im provem ents. I f w e cut T h a t is w h y the It I achieved a b u d g et surplus— before the them out, w e w o u ld not only ham per the 80th C on gress tax cut— and g ro w th o f the econom y, w e w o u ld also in achieve another b u d g et surplus. I intend to crease u n em p lo ym en t by about a m illion W h e n w e had an excess o f receipts over persons, and w eaken the position o f over 2 expenditures, w e applied it to reduce the m illio n m ore. n ational debt. T h is w o u ld be the m ost ex pensive k in d o f savin g I can th in k of. W e have already paid off m ore o f the debt than the total size o f the T h e people w h o u n w isely u rge that G o v national debt after th e F irst W o r ld W a r. ern m en t expenditures be slashed, are fo r the In fact, w e have paid o ff m o re on the na m ost part the very sam e people w h o have tional lo n g been o p posin g o u r social p rogram s and together! o u r resource developm ent p rogram s. debt than all the Presidents put They B u t yo u cannot achieve a surplus in the have resisted such thin gs as social security, G o vern m en t bu d get w h en you have a de ho usin g, the m in im u m w a g e la w , the public clin in g national econom y. p o w e r developm ent, fro m the ve ry begin surplus and national prosperity g o together. n in g . T h e in com e and the exp en diture o f the G o v T h e y have opposed every im p rove m ent in those program s. A G o vern m en t ernm ent are a very im p ortan t part o f the D u rin g an inflationary period, they are entire national econ om y. I f w e fo llo w the again st these program s because they say w ro n g b u d g et p o licy at this tim e and slash they are inflationary. o u r expenditures, w e w ill decrease em ploy D u rin g a deflationary period, they are against them because they m ent, cut d o w n investm ent, w ea k e n o u r de say they are deflationary. fenses, and in ju re o u r efforts fo r peace. R ain or shine, they are just again st ’em . It w as program s lik e these, fo r the bene I f w e fo llo w the rig h t bu d get policy, and support the national econ om y, w e can help fit o f the people, that saved business in the b rin g the coun try back to o u r n orm al rate thirties, o f g ro w th and expansion. that are su p p o rtin g p urchasin g p o w er n ow , that are la y in g a foun dation fo r increased prosperity in the fu tu re. M ost o f Som e o f the m easures w h ich w ill be most effective in the present situation have either the people k n o w this, even if the selfish been enacted or are on their w a y to final interests d o n ’t. passage. In the lo n g ru n, these program s are not o n ly necessary fo r the w elfare o f the coun http://fraser.stlouisfed.org/ 374of St. Louis Federal Reserve Bank They in clude the h o u sin g pro gram , the agricu ltu ral p ro gram , and an in crease in the m in im u m w ag e. July H a rry S. Trum an, 1949 14 [155] In addition , I have proposed to the C o n I have confidence in the un lim ited capacity gress in the E co n om ic R eport that it take and in the un lim ited opportunities o f the added steps at this tim e to keep purchasin g A m erican econom y and the A m erican peo p o w er up , to aid those w h o are suffering ple. fro m un em ploym en t, and to enable us to ter the international problem s w h ic h con m a k e plans so that w e w ill be in a position fron t us and to achieve w o rld peace. to step u p public w o rk s activities if they becom e necessary. I have confidence in our ability to m as I have this confidence because o f o u r achievem ents in the past and because o f the I f these m easures are adopted, the G o v present strength o f our institutions. ern m en t w ill be in an im p roved position to A b o v e all, I am con fiden t because I be p lay its role in o u r e xp a n d in g econom y. lieve th at A lm ig h ty G o d has set before this B u t c h a n g in g the course o f our present eco N a tio n the greatest task in the history o f nom ic situation is also g o in g to require w ise m an k in d , and that H e w ill g iv e us the action by business, labor, and agricu ltu re. w isd o m and the strength to carry it out. I f businessm en, labor, and farm ers base th eir actions n o w on an e xp an d in g econom y, w e w ill w o r k o u r w a y successfully th ro u g h the n o t e : For the President’s message to the Congress on the Midyear Economic Report of July n , 1949, see Item 151. present period o f transition. 155 The President’s News Conference of July 1 4 , 1 9 4 9 I h a ve one short an n oun ce A n d I have asked the A ssistan t to the m en t to m a k e to yo u , because I k n o w yo u President, D r . Steelm an, to assum e respon w ill ask som e questions about it if I d o n ’t sibility an n oun ce it. should appreciate the people to w h o m this t h e p r e s id e n t . [1 .] fo r d irectin g these activities. I [ Reading, not literally]: “ In the goes— all m em bers o f the C abin et, C h a ir recent E co n om ic R eport to C on gress,1 I m an o f the C o u n cil o f E co n om ic A d visers, D irecto r o f the B ureau o f the B u d g et, C h a ir m ade the fo llo w in g statem ent.” T h is w ill be available fo r you in m im eo A d m in istra to r fo r E co n om ic C oop eration, grap hed fo rm w h en you go out. [Continuing reading] “ ‘T h e re m an o f the A to m ic E n e rg y C om m ission , the are a A d m in istrato r fo r G en eral H o u sin g Services, and A d m in istrato r, o r assistance to localities w h ich can be tim ed nance, the C h airm an o f the U n ited States F i and channeled so as to concentrate upon M aritim e areas w h ere un em ploym en t is heavy, w ith D r . Steelm an is g o in g to coordin ate their out sacrifice o f gen eral national objectives. activities. T h is prin ciple o f w ise selectivity is particu larly applicable to the procurem ent and construction activities— ’ ” and so forth. C o m m issio n — and H om e the n um ber o f F ed eral p rogram s o f direct action T h e Secretary o f C o m m erce is m a k in g a special in vestigation n o w o f the various places w h ere there is local un em ploym en t, and this w ill be coordinated 1 See Item 151. others— and w ith these boards and bureaus, and w e are g o in g to see 375
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