FACING 1946 CONFIDENTLY

Ashburton Guardian, Volume 66, Issue 86, 22 January 1946, Page 3

FACING 1946 CONFIDENTLY

President Truman said that American foreign policy was designed to preserves peace on the basis of “justice, no less than power,” but the United States would refuse to sacrifice its ideals or vital interests should difficulties arise among the United Nations. He described the first United Nations General Assembly as “the real beginning of our -bold adventure toward the preservation of world peace.” However, the United Nations organisation was only the minimum essential beginning toward the goal. Economic collaboration must be carried on as carefully and comprehensive as political and security measures. The President emphasised that United States diplomatic policy must be linked with its foreign and economic policy, with three goals —the promotion of United States prosperity, the aiding of restoration, and the expansion of world markets —thereby contributing to world peace. President Truman said that extensions of the 3,750,000,000 dollar credit to Britain would “ease the transition problem for one of our major war partners and enable the United Kingdom to avoid discriminatory trade arrangements of a type which destroyed the freedom of trade during the 1930’5.” President Truman promised that the United States would support the smaller nations in international councils, particularly in writing the peace treaties with German, Japan, Italy, Rumania, Bulgaria, Hungary, and Finland. Additional States He asked Congress to admit Hawaii and Alaska as additional States of the Union, requesting a greater measure of self-government for the Virgin Islanders, and legislation to speed the economic rehabilitation of the Philippines. President Truman said that American occupation policy was designed to ensure that neither Germany nor Japlan would; again be in a position to wage aggressive warfare. Their armament making potential was being dismantl- » ed, fundamental changes in social political structures were being effected, and democratic systems were being fostered so that the voice of the common man might be heard in the councils of his Government. Although the Allied Control Council in Germany had not met with unqualified success, it had made encouraging progress in the face of serious difficulties. At the earliest practical date the control of American-occupied territory would be transferred from military to civilian personnel. “At the same time effective control will be maintained in Germany until we are satisfied that the German people have regained the right to a place of honour and respect,” he said. He pointed out that in Japan, the United States, with the full approval of its partners, had retained primary authority and responsibility which would continue until the • Japanese people chose their own form of government. The Far East He added: “Our basic policy in the Far East is to encourage the development of a strong, independent, united and democratic China. General Marshall is ably executing a, policy designed to end Chinese civil strife and broaden the basis of representation of the Central Government.” President Truman declared that demobilisation was proceeding as quickly as was possible, and consistent with military needs. He said that by July 1, 1946, nine out of every ten men serving in the armed forces on V-E Day would be released, but a year from

PRESIDENT TRUMAN ON U.S. J* r POLICY ■ r> Warning Against Danger of Inflation \ ■ [ > (N.Z. Press Association—Copyright.) WASHINGTON, January 21. “The United States strongly and confidently faces 1946, the year of decision ’ in international affairs, aware of its great responsibilities to all the peoples of the world,’ said President Truman in a combined 25,000-word national and Budget message. President Truman expressed optimism over domestic business and job potentialities, but warned anew against the danger of inflation. He expressed concern regarding the wave of major strikes, pointing out that the establishment of a fair wage structure was the most serious difficulty in the path of reconversion. He said that in his opinion most industries and companies had an adequate leeway .in which to grant substantial wage increases. President Trumans Budget recommendations called for a total expendiure of 35,860,000,000 dollars, as compared with 67,394,000,000 dollars in the present fiscal year. He advocated drawing on the Treasury’s cash balance to reduce the national debt for the first time in 17 years from an estimated 275,000,000,000 dollars to 271,000,000,000 dollars.

now the United States would still need about 2,000,000 officers and men in the armed forces. If volunteers were insufficient, it would lie necessary to extend the Selective Service Act I beyond the expiration date, May 16, :1946. Domestic Affairs Turning to domestic affairs, President Truman emphasised the need for full employment and greater production. He observed that most companies could afford to grant substantial wage increases. “Good wages mean good markets, and good business means more jobs and better wages,” he said. “Substantial wage increases are good business for business, because they assure a large market for products. They ara also good business for labour, because they "increase labour’s standard of living. They are good business for the country as a whole, because capacity production means an active, healthy, and friendly citizenry enjoying the benefits of democracy under the free enterprise system.” President Truman asserted that the establishment of a fair wage structure was the most serious difficulty in the way of reconversion and expansion. “The ability of labour and management to work together, and the wage and price policies which they develop are social and economic issues of the first importance,” he said. “Labour and management must establish bettei human relationship. No Government policy can make men understand each other and get along unlessf they conduct themselves in a way to foster mutual respect and goodwill. However, the Government can help, develop machinery to assist in solving disagreements peacefully and so reduce the number and duration of strikes.. Industrial peace will have to be achieved through collective bargaining with Government assistance, not Government compulsion.” President Truman asked Congress for new legislation extending price and rent controls, continuing food subsidies, and creating a permanent housing agency to encourage better housing for low income earners. Danger of Inflation He said inflation was still the country's chief worry, and, because of its dangerously powerful pressures, and also because of future Governmental costs, it called for large revenues. He was unable to recommend a further tax reduction at present. Thei tola, estimated expenditure for thefiscal year 1947 was just over 35 -SOO,OOO 000 dollars. Net receipts, were 31,500,000,000 dollar,a The estimated difference, 4,300,000,000 dollars, would he met by a reduction in a very substantial Treasury balance. The annual rate of expenditure had been reduced by 32.000,000,000 dollars. The drastic cut in the war programme had thrown the nation s economy into lower gear, continued the President, hut it had not thrown it out of gear. War expenditure in the fiscal vear 1945 amounted to 90,500,000,000 dollars, compared with the expenditure for war liquidation, occupation, and national defence for the fiscal year estimated at 15,000,000,000 dollars. President Truman said that war veterans’ pensions and benefits had become one of the largest categories' in the Budget. He recommended appropriations of 4,787,000,000 dollars for that purpose. “We cannot shrink the Government to pre-war dimensions unless we slough off new responsibilities resulting from the war, but we cannot do that without paying an excessive price in terms of national wel- 1 ’fare,” he said.