As the year 1947 begins, the state of our national economy presents great
opportunities for all. We have virtually full employment. Our national
production of goods and services is 50 percent higher than in any year
prior to the war emergency. The national income in 1946 was higher than in
any peacetime year. Our food production is greater than it has ever been.
During the last 5 years our productive facilities have been expanded in
almost every field. The American standard of living is higher now than ever
before, and when the housing shortage can be overcome it will be even
higher.
During the past few months we have removed at a rapid rate the emergency
controls that the Federal Government had to exercise during the war. The
remaining controls will be retained only as long as they are needed to
protect the public. Private enterprise must be given the greatest possible
freedom to continue the expansion of economy.
In my proclamation of December 31, 1946 I announced the termination of
hostilities. This automatically ended certain temporary legislation and
certain executive powers.
Two groups of temporary laws still remain: the first are those which by
Congressional mandate are to last during the "emergency"; the second are
those which are to continue until the "termination of the war,"
I shall submit to the Congress recommendations for the repeal of certain of
the statutes which by their terms continue for the duration of the
"emergency." I shall at the same time recommend that others within this
classification be extended until the state of war has been ended by treaty
or by legislative action. As to those statutes which continue until the
state of war has been terminated, I urge that the Congress promptly
consider each statute individually, and repeal such emergency legislation
where it is advisable.
Now that nearly all wartime controls have been removed, the operation of
our industrial system depends to a greater extent on the decisions of
businessmen, farmers, and workers. These decisions must be wisely made with
genuine concern for public welfare. The welfare of businessmen, farmers,
and workers depends upon the economic well-being of those who buy their
products.
An important present source of danger to our economy is the possibility
that prices might be raised to such an extent that the consuming public
could not purchase the tremendous volume of goods and services which will
be produced during 1947.
We all know that recent price increases have denied to many of our workers
much of the value of recent wage increases. Farmers have found that a large
part of their increased income has been absorbed by increased prices. While
some of our people have received raises in income which exceed price
increases, the great majority have not. Those persons who live on modest
fixed incomes--retired persons living on pensions, for example--and workers
whose incomes are relatively inflexible, such as teachers and other civil
servants--have suffered hardship.
In the effort to bring about a sound and equitable price structure, each
group of our population has its own responsibilities.
It is up to industry not only to hold the line on existing prices, but to
make reductions whenever profits justify such action.
It is up to labor to refrain from pressing for unjustified wage increases
that will force increases in the price level.
And it is up to Government to do everything in its power to encourage
high-volume Production, for that is what makes possible good wages, low
prices, and reasonable profits.
In a few days there will be submitted to the Congress the Economic Report
of the President, and also the Budget Message. Those messages will contain
many recommendations. Today I shall outline five major economic policies
which I believe the Government should pursue during 1947. These policies
are designed to meet our immediate needs and, at the same time, to provide
for the long-range welfare of our free enterprise system:
First, the promotion of greater harmony between labor and management.
Second, restriction of monopoly and unfair business practices; assistance
to small business; and the promotion of the free competitive system of
private enterprise.
Third, continuation of an aggressive program of home construction.
Fourth, the balancing of the budget in the next fiscal year and the
achieving of a substantial surplus to be applied to the reduction of the
public debt.
Fifth, protection of a fair level of return to farmers in post-war
agriculture.