MR TRUMAN SPEAKS TO CONGRESS

Press, Volume LXXXIII, Issue 25345, 19 November 1947, Page 6

MR TRUMAN SPEAKS TO CONGRESS

Foreign Aid And Home Controls

LEGISLATIVE PROGRAMME OUTLINED

(N.Z. Press Association—Copyright) WASHINGTON, November 17. Authority to ration scarce commodities and reimpose Control of prices, wages, and rents was sought by President Truman in his speech at the opening of the special session of Congress to-day. He said that such authority was essential to halt “alarming” inflation. He coupled his appeal with a formal request for 590,000,000 dollars for stop-gap aid to Europe in the next four months and a half. “The future of the world’s free nations hangs in the balance. The future of our own economy is in jeopardy. The action which you take will be written large in the history of this nation and of the world,” said the President. The importance of the occasion was emphasised by the fact that it was only the twenty-sixth special session of Congress since the Federal Government was established in 1789. The most recent session was that converted on September 21, 1939, by President Roosevelt to repeal the Neutrality Act at the outbreak of the second world warj After describing the steps taken in drawing up the plans for interim aid for Europe, Mr Truman said that Austria needed 42,000,000 dollars,* Italy 227,000,000 dollars, and France 328,000,000 dollars to« buy food, fuel, and other essential goods during the next four months and a half. Additional funds would also be required to maintain the American position in the occupied areas. “Emergency assistance, by itself, will not solve European problems,” he said. “Emergency aid is not a substitute for a long-range recovery programme, but It is a vital prerequisite to such a programme.” The President added: “If the western European natioris should collapse this winter as a result of our failure to bridge the gap between their resources and their needs, there would be no chance for them—or us—to look forward to their economic recovery. The provision of interim aid will give us time to plan our part in an economic recovery programme. I shall shortly submit to Congress my recommendations concerning the long-range programme. “It is a tribute to * the strength of our democracy. that we are able to make so great a contribution to the freedom and welfare of other nations. This nation is strong both in material resources and in the spirit of its people. Power and Responsibility “I refer to this nation’s strength with humility, for it is an awe-in-spiring truth that the manner in which we exert our strength now and in the future, will have a decisive effect on the course of .civilisation. This is a truth, the significance of which grows with the experience of each passing day. The American people are becoming more and more deeply aware of their world position. They are learning that great responsibility goes with great power. We . are convinced that the best way to prevent future wars is to work for the independence and well-being of all nations. This conviction guides our present efforts and it will guide our future decision. “We have participated fully in the growth of the United Nations, and we seek now to strengthen it and to improve it.

“We are assisting free nations who have sought our aid in maintaining their independence. • We have contributed large sums to help rebuild countries devastated by war. We have taken the lead in breaking down barriers to world trade. “In our efforts, however, to achieve the conditions of peace, we have encountered unforeseen and unwelcome obstacles. We have found that not all nations seem to share our aims or approve our methods. We regret the differences which have arisen and the criticisms so loudly expressed. And yet we cannot afford, and we do not intend to let current differences with some nations deter our efforts to cooperate in a friendly fashion, and to assist other nations who. like us, cherish freedom and seek to promote world peace and stability.” Domestic Economy After appealing for prompt action on the interim aid programme, Mr Truman turned to the domestic econnomic situation in the United States. “On several occasions during the past year I have reported*to Congress on our general economic . situation,” he said. “These reports have told of new high levels of production and employment. Farmers are producing 37 per cent, more than in 1929 and industry is producing 65 per cent. more. In terms of actual purchasing power the average income of individuals, after deductions for taxes, has risen 39 per cent. In each of my reports, however. I have had to warn of the dangers which lie ahead. To-day inflation stands as an ominous threat to the prosperity which we have achieved. We already have an alarming degree of inflation and. even more alarming, its getting worse. “Since the middle of 1946 fuel has gone up 13 per cent., clothing prices 19 per cent., and retail food prices 40 per cent. The average for all tost-of-living items has risen 23 per cent., and the cost of living is still climbing. In the past four months it has risen at the rate of 16 per cent, yearly. Wholesale prices are rising, too. They affect every industry and trade, and are soon translated into retail prices. Since the middle of 1946, wholesale textile prices have gone up 32 per cent., metals 36 per cent., and building materials 42 per cent., and the average increase has been 40 per cent.”

After referring to the disastrous effects of inflation on every section of the community. Mr Truman said it also threatened the American foreign aid programme. “We cannot abandon foreign aid. nor can we abandon our own people to the ravages of unchecked inflation.” he said. “We cannot allow this nation’s strength to be wasted and our people’s confidence in our free institutions to be shaken by an economic catastrophe. We shall be inviting that catastrophe unless we take steps now to halt runaway prices." Measures Recommended The immediate approach to the problems of high prices and inflation m the United States should consist of three types of measures, said Mr Truman. He enumerated these measures as follows: (1) To relieve monetary pressures. (2) To channel scarce goods into the most essential uses. (3) To deal directly with specific high prices. Mr Truman then outlined the following legislative programme: (1) The restoration of control over hire purchase and the restraint of inflationary bank credit. (2) The regulation of speculative trading on grain and other commodity exchanges. (3) The extension and strengthening of export controls which, under the present legislation, are due to expire in March, 1948. (4) The extension of the Government’s authority to allocate transport facilities and equipment to ensure delivery of goods for export. (5) Measures to control the marketing of livestock and poultry to conserve grain. (6) Empowering the Department of Agriculture to expand its programme for encouraging conservation practices and authorising measure® ‘‘designed to increase the production of foods in foreign countries.” (7) Control of allocations and inventories, control of scarce commodities

basically affecting the cost of living and industrial production. (8) The extension and strengthening of rent control. (9) Consumer rationing of scarce products basically affecting the cost of living. (10 The reimposition of price and wage ceilings. Mr Truman said he believed there should be few occasions on which wage ceilings would be necessary. Discussing price ceilings, Mr Truman said his plan did not mean that controls could be imposed on all items, but only those in short supply. This selective treatment of a relatively few danger, spots was very different from the all-embracing war-time price controls. “Even should the shortages of a few commodities at the consumer level remain serious for a time, I believe that a fair distribution of such commodities can be largely accomplished without consumer rationing,” he said. “But no one can foretell how serious some shortages may become next year. I therefore recommend that authority be granted, as a preparedness measure, to ration the basic cost-of-living items on a highly selective basis. “I am well aware that some of my proposals are drastic measures, but if we face the facts squarely it is ap- 1 parent that no other methdds can safely be counted on to protect our people from the dangers of excessively high prices and ruihous inflation.” Mr Truman concluded: “If we neglect our economic ills at home, and if we fail to halt the march of inflation, we may bring on a depression from which ouf economic system, as we know it, might not recover. And if we turn our backs on the nations still struggling to recover from the agony of war, we may lose for all time the chance to obtain a world where free peoples can live in enduring peace.”