Fellow Americans:
As you all know, it is the constitutional duty of the President to report to the Congress annually on the state of the union. That regular report will be made to the Congress soon after it reconvenes.
Tonight, I am speaking directly to you – the American people – on issues which will be the subject of debate when Congress returns.
1946 is our year of decision. This year we lay the foundation of our economic structure which will have to serve for generations. This year we must decide whether or not we shall devote our strength to reaching the goal of full production and full employment. This year we shall have to make the decisions which will determine whether or not we gain that great future at home and abroad which we fought so valiantly to achieve.
I wish I could say to you that everything is in perfect order – that we are on the way to eternal prosperity. I cannot.
The months ahead will be difficult. We are well along the road toward our goal, but at every turn we run the risk of coming upon a barrier which can stop us.
In the message to the Congress on September 6, 1945, and in other messages, I have outlined legislative proposals to meet the problems which lie ahead. Many of these proposals are pending before the Congress. A few have been adopted. Progress on most of them has been distressingly slow. Now, at the beginning of this new year, is a good time to take stock.
First, I can say with emphasis that the legislative branch of our government has done its full share toward carrying out its responsibility in foreign affairs.
The Congress has approved the Charter of the United Nations Organization. It has provided for full participation by the United States. It has continued the program of reciprocal trade agreements. It has approved participation in the United Nations Food Organization. It has passed legislation carrying out the Bretton Woods Agreement. It has provided support for the United Nations Relief and Rehabilitation Administration.
The Congress is indeed to be congratulated by the people on all that it has contributed toward cooperation among the nations of the world in their search for peace and security. I shall have more to say about the foreign policy of the United States in the annual message to the Congress.
When we turn to our domestic problems, we do not find a similar record of achievement and progress in the Congress.
And yet our domestic postwar problems are just as serious and, in many ways, just as difficult as our international problems. Unless we can soon meet the need of obtaining full production and full employment at home, we shall face serious consequences. They will be serious not only in what they mean to the American people as such, but also in what they can do to our position as a leader among the nations of the world.
With the surrender of Japan last August, we set certain domestic goals to be attained. The tasks before us were clear then; they are clear now.
We had to reconvert our economy from war to peace – as rapidly as possible. We had to keep employment and wages and purchasing power on a high level during the changeover.
We had to keep the prices of commodities from going up too high. We had to get civilian goods produced and put upon the market promptly.
In other words, our primary aim was to bring about an expanded production and steady, well-paid jobs and purchasing power for all who wanted to work – we had to maintain high farm income – and good profits based on big volume.
Reaching that goal means better homes, better food, better health, better education, and security for every citizen of the United States. It means bigger and steadier markets for business. It means world confidence in our leadership.
We had gone a long way in getting our workers and factories back on a peacetime basis. War plants have been cleared in large numbers, and their war contracts settled. Men, machines, and raw materials are already back in peacetime production in greater numbers, and are producing more goods, than any one of us had dared to expect a few months ago.
But we are a long way from our goal. The return of the United States to a peacetime economy in 1946 requires the same cooperation that we had during the war years. Industry, labor, agriculture, the Congress, the President – each one of these – is called upon to do certain things. None of them can do the job alone. Together they can.
There is one vast difference, however, between 1941 and 1946. While we were producing to meet the needs of war, we had the great stimulus of the war itself. That stimulus is now gone. The cooperation and teamwork in some quarters, I am sorry to say, have suffered proportionately.
The reconversion period through which we are now passing has as many elements of danger to our economy as the war period. Whether we fall into a period of great deflation because of unemployment and reduced wages and purchasing power, or whether we embark upon a period of great inflation with reduced production and spiraling prices – the result will be equally disastrous.
Immediately after the surrender of Japan, in the full flush of our victory, representatives of the Congress, of industry, of labor, and of farm organizations called upon me. From them I received promises of cooperation and teamwork during this reconversion period.
I regret to say that those promises have not all been kept. As a result, many obstacles have been thrown in our path as we have tried to avert the dangers of inflation and deflation.
First among those obstacles have been labor-management disputes.
Immediately after V-J Day, the government announced a policy of taking off the wartime controls which it had exercised over wages and over industrial relations as a whole. It was thought, particularly by labor and management, that through collective bargaining, labor and management would be able to find common ground, that they would be able to agree upon ways to avoid stoppages of work and to continue the production that is so necessary to our economic life.
Unfortunately, industrial disputes soon began, and many strikes were called. Many of these disputes and strikes were settled or conciliated. But there were some strikes of nationwide importance in which collective bargaining and conciliation both failed.
In order to enable management and labor to make a common effort to find means for preventing work stoppages, and to consider many other aspects of industrial relations, the government invited their representatives to meet in a conference of their own, in Washington.
Although it did reach agreement on some matters, and although it did pave the way for future meetings and discussions, the Labor-Management Conference could not agree upon a solution of the most immediate and pressing problem – what to do about strikes when bargaining, conciliation, and arbitration had all broken down.
As industrial strife has increased, with automobile workers out on strike, and with steel workers, electrical workers, and packinghouse workers scheduling strikes very soon, I have been deeply concerned about the future. I am sure that all of us, including these workers themselves, share that concern.
When the Labor-Management Conference ended, it became my responsibility as the President of the United States to recommend a course of action. This I did in a message to the Congress on December 3, 1945.
I recommended certain fact-finding procedures which I believe can go a long way toward meeting these problems.
I had hoped that the Congress either would follow my recommendations or would at least propose a solution of its own. It has done neither.
The purposes of my recommendations have been misrepresented by some of the spokesmen of both labor and management. The recommendations, however, are very clear.
I proposed that in the few nationwide industries where a stoppage of work would vitally affect the national public interest, after all other efforts had failed, the government should step in to obtain all the facts and report its findings to the country.
Experience has repeatedly shown that once the public knows the facts it can make its opinion felt in a practical way. In order to give a fact-finding board a reasonable chance to function before a strike is actually called, I suggested that there be a 30-day “cooling-off period.” I further recommended that the power of subpoena be given to the fact-finding board so that it could get all the pertinent facts.
In the setting up of fact-finding boards, there is nothing harmful to labor. There is no reason why a strike cannot be postponed for 30 days. Nor is there any intention of taking away labor’s right to strike. That right remains inviolate. There is no effort to shackle labor. There is only an effort to find the truth, and to report it.
On the other hand, there is nothing harmful to management in this proposal. No detailed information obtained from the books of any company is to be revealed. It is nothing new to have the government get accurate information from a corporation. It is done now by many federal agencies – by the Bureau of Internal Revenue, by the Securities and Exchange Commission, by the Wage and Hour Division of the Department of Labor, by the Interstate Commerce Commission, and by many others.
Without legislation, fact-finding boards cannot function as effectively as they can under a statute. For example, shortly after I made my recommendation to the Congress, I appointed a fact-finding board in the dispute between the General Motors Corporation and the United Automobile Workers. I thought the matter too urgent to wait upon the passage of legislation. You have seen how the General Motors Corporation has refused to cooperate with this fact-finding board. There is no way that it can be compelled to cooperate, unless a statute is passed giving the board the power of subpoena. That is what is now up to the Congress.
Every day that production is delayed and civilian goods are kept from our markets by strikes or lockouts brings injury to our reconversion program. Already millions of dollars in wages have been lost to workers. Laboring men and women are using up their savings. It is for these reasons that I urged the Congress to pass this legislation without delay. This legislation is still in the Committee on Labor in the House of Representatives, and in the Committee on Education and Labor in the Senate.
I am sure, from all the sources of information which I am able to use, that the American people agree with the necessity for some fact-finding legislation along the lines recommended. The time has come for every citizen of the United States to make his opinion known to his representative in Congress. Once that is done, you may be sure that results will follow.
I was a member of Congress for 10 years, and am familiar with groups of all kinds representing special interests. Some are right; some are wrong. But there are those who, when they decide to make themselves felt, are the most powerful pressure group in the world. I mean the American people – the great mass of our citizens who have no special interests, whose interests are only the interests of the nation as a whole. The only difficulty is that the great public body of American citizens who are not organized find it difficult to make themselves heard.
I hope that the members of the Congress will talk to their constituents while they are at home on a vacation, and that immediately upon their return they will really do something substantial about strikes along the lines I have suggested, instead of merely talking about them.
I have indicated my opposition, and I repeat it now, to the antilabor bills pending in the Congress which seek to deprive labor of the right to bargain collectively, or which seek to deprive a union of its ultimate right to strike. That is why I am so anxious to have on our books an effective statute which will have none of the evil effects of some of the legislation now pending.
Of equal importance with the settlement of management-labor disputes during this reconversion period is the question of keeping prices on an even keel. Here too there are pressure groups at work in the Congress and outside the Congress, constantly pushing, lobbying, arguing to take off price controls and let prices go up without interference.
We cannot keep purchasing power high or business prosperous if prices get out of hand. There is no use talking about the expanded production upon which steady jobs depend, unless we keep prices at levels which the vast majority of the people can afford to pay.
Today the pressures for inflation are many times stronger than those which caused the inflation after World War I and which caused the 1920 depression.
The inflationary pressures now at work can bring an inflation and a crash that will be much more serious than 1920. That is why it is so important to get a high volume of production and a large supply of marketable goods right away. Production is the greatest weapon against inflation.
Until enough goods can be made to supply the demand, the power of the government must be used to keep prices down – or inflation will soon be upon us.
People have a right to protection for their savings. They should be assured that their earnings will give them a decent standard of living. Businessmen who want to plan ahead have the right to know now that the prices of the things they will have to buy in the future will remain predictable. They must have confidence now that the purchasing power upon which their markets depend will be protected.
We are all anxious to eliminate controls just as rapidly as we can do so. The steps that we have already taken show that. But price and rent controls will have to be maintained for many months to come, if we hope to maintain a steady and stable economy. The line must be held. I shall urge the Congress after it reconvenes to renew the act as soon as possible and well in advance of its expiration date, June 30, 1946.
Price control is only one of the war powers which require extension. Another is the Second War Powers Act, recently extended for six months instead of a year as I requested. Since we already know that war-born shortages of certain materials will surely plague us after June 30 of this year, when the extended law will expire, the law should be extended again now. If this is done, all businessmen will know that short materials will continue to be fairly controlled and distributed. Unless we do this now, controls will begin to break down in a short time.
There are other things which should be done by the Congress if it would fulfill its responsibility to the nation. Many of these measures have already been recommended by me, and have been written into proposed legislation by individual congressmen. But the Congress has done little – very little – about them.
One essential part of our program, designed not only to tide us over the reconversion period but also to carry us to our goal of full production and a higher standard of living, is the adoption of full employment legislation. A satisfactory full employment bill was passed by the Senate. Another bill was passed by the House of Representatives which is not at all acceptable, and which does not accomplish any of the purposes sought. These two. bills are now in conference between the Senate and the House of Representatives.
It was my fervent hope, and I am sure that it was the hope of all progressive Americans, that before the recess of the Congress for the Christmas holidays the conferees would have reported a satisfactory full employment bill for adoption by both Houses. No such bill has been reported. It is most important that the conferees report a satisfactory bill immediately upon the reconvening of the Congress.
One of the measures which I have been urging upon the Congress ever since May of last year is that the federal government make provision to supplement the unemployment insurance benefits now provided by the different States.
While unemployment has not reached anything like the level which was feared, there is still need to provide at least some measure of subsistence to those men and women who do lose their jobs by the end of war production.
The Senate has passed an acceptable measure along these lines. But in the House of Representatives the bill is now locked up in the Ways and Means Committee. It will remain locked up in that committee unless you the people of the United States insist that it be reported out and passed.
On several occasions I have also asked that the Congress outlaw by permanent statute un-American discrimination in employment. A small handful of Congressmen in the Rules Committee of the House have prevented this legislation from reaching a vote by the Congress. Legislation making permanent the Fair Employment Practices Committee would carry out a fundamental American ideal. I am sure that the overwhelming mass of our citizens favor this legislation and want their Congressmen to vote for it.
I have also asked that the Congress raise substantially the amount of minimum wages now provided by law. There are still millions of workers whose incomes do not provide a decent standard of living. We cannot have a healthy national economy so long as any large section of our working people receive wages which are below decent standards. Although hearings have been held on this question in the Congress, no action has been taken.
The bills are now resting in the Education and Labor Committee of the Senate and in the Labor Committee of the House.
And so it goes with measure after measure now in the Congress. Time is running out. There are also other problems: comprehensive scientific research, universal training, a health and medical care program, an adequate salary scale for federal employees, the presidential succession, river valley development, and others.
Now I intend no blanket criticism of the Congress. Devoted and far-seeing men in both the Senate and the House have labored to make effective a program adequate to our needs. But if they are to succeed, they must be reinforced by you – the people they represent.
And let me make it very clear that when I speak of bills not getting any action, it is not the Congress as a whole which is responsible. All these measures – and many others – have been referred to various committees of the Congress. That is the regular procedure. There they await action. Generally speaking, unless the committees act to report the bills, the members of Congress as a whole never get a chance to vote for or against them.
It is the committees which hold up action on bills. Indeed, it is usually not even the whole committee. On many of these subjects, I personally know that there are individual members of the respective committees who are trying to induce their colleagues to report the bills. But often a bare majority of a committee – a handful of men – can prevent a vote by the whole Congress on those measures of majority policy.
What I am asking is that these various committees at least give the representatives of the people a chance to vote “yes” or “no” on these vital issues – and that they give them that chance soon.
When I speak of my recommendations and proposals, I also want to make it very clear that I have no pride of authorship in them at all. There are, however, such things as “must” objectives. It is my responsibility to outline those objectives to the Congress and to you the people. And to attain those objectives there are certain steps which must be taken, to get us safely over this reconversion period and to establish and maintain a stable economy for the future.
If the measures which I have recommended to accomplish these ends do not meet the approval of Congress, it is my fervent wish – and I am sure it is the wish of my fellow-citizens – that the Congress formulate measures of its own to carry out the desired objectives. That is definitely the responsibility of the Congress. What the American people want is action.
In any discussion of action at this time, housing must be considered. In this field the Congress is cooperating, and there is much to be done.
Of the three major components which make up our standard of living – food, clothing, and housing – housing presents our most difficult problem. As for food, there is every prospect that 1946 will be a peak year of production. As for clothing, it is expected that production will reach a satisfactory level sometime this year. But in housing the situation is different.
We urgently need about five million additional homes. This does not include the replacement of millions of existing substandard dwellings in the cities and on the farms. The greatest number of homes constructed in any one year before the war was less than a million. It is clear, therefore, that this is an emergency problem which calls for an emergency method of solution.
We must utilize the same imagination, the same determination that back in 1941 enabled us to raise our sights to overcome the Nazi and Japanese military might. With that imagination and determination we can mobilize our resources here at home to produce the housing we require.
Because of the critical need, I have appointed an emergency housing expediter. He will be empowered to use every agency of the government and every resource of the government to break the bottlenecks and to produce the materials for housing. The government is determined to give private enterprise every encouragement and assistance to see that the houses are produced – and produced fast. Where private enterprise is unable to provide the necessary housing, it becomes the responsibility of the government to do so. But it is primarily a job for private enterprise to do – a job which is a challenge as stimulating as any goal we set during the war.
The members of the Congress are now at home. During this period they will have the benefit of close contact with you – the people whom they serve.
From personal experience, I know that contact with the people back home helps every public servant. I urge you to tell your public servants your own views concerning the grave problems facing our country. In a free country the voice of the people must be heard.
I fully appreciate the many problems which Congressmen face. They have done a great wartime job under most trying conditions. The complicated return to peacetime has increased their difficulties.
I seek no conflict with the Congress. I earnestly desire cooperation with the Congress. Orderly procedure in the Congress is indispensable to the democratic process. But orderly procedure does not mean needless delay.
Stable world relationships require full production and full employment in the United States.
There are voices of defeat, dismay, timidity among us who say it cannot be done. These I challenge. They will not guide us to success, these men of little faith.
We cannot shirk our leadership in the postwar world. The problems of our economy will not be solved by timid men, mistrustful of each other. We cannot face 1946 in a spirit of drift or irresolution.
The men and women who made this country great and kept it free were plain people with courage and faith.
Let us justify this heritage.
