The Wilmington morning star., 1947-04-22
Text of Truman; s Speech

5 stops; production drops; unem-
oloyment sets in; prices collapse;
profits vanish; businessmen fail.
That formula was tried after
the First World War. And we paid
for it. Between 1920 and 1921, an
t 1ual national income fell by Is
5 billion dollars. Industrial produc =
5 lion dropped % per cent. Unem-
ployment increased by more than
four million. Business failures
more than doubled. Farm losses
were appalling.
} We must not choose that formu-
la again.
If we are to avoid a recession
we must act before it starts.
Prices must be brought down.
1 speak first to those business
men who have it within their pow
er to reduce heir prices.
Price reductions will bring
more prosperity and profits in the
long run. Lower prices will sus-
tain and further increase the pre-
sent high volume of sales and
stimulate greater production. This
ration will grow only through in
creased productivity and more
and more production. Hig
prices for the same amount OF
goods will lead only to an arti-
ficially : inflated economy, not a
sound economy.
Present business conditions per-
mit-in fact, they require-lower
prices in many important fields.
Profits in the aggregate r
breaking all records although pro-
fit margins vary greatly in indi-
vidual cases. In 1916, corporate
profits, after taxes, were 80 per
cent higher than in 1945. In the
first euarte~ of 1947, they ran
even higher. These figures are
total t>ures and do not, of course,
apply to every industry or every
business.
I do not have to name the par
ticular industries or the particu-
lar businesses. The men who run
them know exactly which are in
Guided and which r not.
Our private enterprise system
now has the responsibility for
prices. During the war the gov
eminent shared that responsible
ty through the mechanism of
price control. In the spring of 1916
I strongly recommended the con-
tinuation of price control so that
we could attain an orderly with
drawal from control of prices as
supply approached demand. A
group saw fit to sabotage price
control and represented to the
public that prices would come
down in a free market.
This has not taken place. On the
contrary, prices rose sharply af-
ter controls were taken off and
they have continued to rise. Pri-
waite enterprise must display the
leadership to make our free eco
nomys work by arresting this
trend. Some price reductions have
already shown that this leadership
does exist. l commend what has
been accomplished. l ask other
business leaders to step forward
in the same direction.
In the present economic situa-
ton, labor also has a response :
bility.
1 said, in January of this year,
that excessive wage demands
would aten h e r
inflationary wage-price spiral. l al
SO said that some moderate wage
increases were justified by eco
nomic or equitable considerations.
Since then, this counsel of mod
Grafton has generally been follow
ed by wage earners and their
leaders.
Some moderate wage adjust
ments have already been made
this year peacefully. Some
others may be expected. Price
adjustments and wage adjust :
ments have been the traditional
method of sustaining mass buying
power and sharing the benefits of
our increasing wealth. In u i'm
mensely productive economy, fair
prices and good wages are the
earmarks of American prosperity.
To wage earners and their lead
ers | repeat nv counsel of moder-
alton.
But it does not require much
foresight to see that, if the cost
of living does not come down, the
size of wage demands might be
magnified. Peaceful management
labor relations would be jeopar :
died. Bitterness and strife would
become harder to avert.
This is another reason - and a
most compelling n - for bring
ing prices and the cost of living
down. This will help wage negoti-
atoms to proceed toward peaceful
adjustments beneficial to all. An
other important contribution in
bringing about lower prices is in
creased productivity on the part
of labor. Higher productivity re =
suits in greater production, which
in turn leads to lower prices to
the public.
After war and postwar infla.
ton, it is difficult to find solu.
tons fair to the consumer, fair to
the worker, and fair to business.
Employers and workers must
both give to this task all their
energies. good will, and under.