Evening star., 1950-07-26
FOLLOWING is a partial tert OF
President Trumdn'S nlidyeGr
economic report to Congress-:

To the Congress of the United
Sta ,es:
Recent international events make
it more important now than ever be-
fore that we maintain and expand
our strength on the home front.
For the sinews of all our strength,
everywhere in the world, are found
in what we achieve here at home.
We must make full use of our
great productive resources, our ever
improving industrial and scientific
techniques, and our growing labor
force. We must redirect part of
these resources to the task of resist
ing aggression. And in doing this,
we must not let imitation undermine
our efforts.
The world responsibilities of the
United States have become heavy.
Clearly, they will become still heav-
Ter before the united efforts of the
free nations of the world produce a
lasting peace. The American people
know how much is at stake. They
are prepared to shoulder their tasks
without f1inching.
The facts should warn us equally
against easy indifference and sensa-
tional alarm. This is not the time.
for business as usual. We are not
now living under peaceful world
conditions. But neither are we en-
gagged in general widespread war.
We are in a situation between these
opposite extremes, and economic
policy should be guided accordingly.
1t is urgent to make some shifts
In economic policy now. We must
also speed up our preparation now
to take more drastic action later if
1t should become necessary to do so.
Economic policy, to the best of
our ability and foresight, should
proceed in line with our appraisal
of the developing situation. While it
should not lag behind, it should
not run blindly ahead.
Following Only Course.
The international policy of the
United States is directed toward
averting full-scale war. We are
following the only course open to a
free and strong nation in the face
OF the challenge confronting us. We
are acting together with other free
peoples, through the United Nations,
to put down the aggression in Korea
and to build the combined strength
needed to deter aggression else
where
The response of the whole Nation
to developments in the Far East has
already provided an overwhelming |
demonstration of unity in the con-
duct Of our international policy
This has lifted the spirits of our
friends all over the world. In these
dlf1icult times, there is the same
need for unity on the economic
front here at home.
IT our economy should fail to
realize its full potential, our inter-
national strength and our domestic
strength would both be affected.
We cannot afford division en- the
nome front, when some of our young
men are fighting overseas. We can
not afford an economy which per-
forms below its best, when nothing
but the best will assure the triumph
OF freedom and of right.
This unity in our economic affairs
Is attainable.
We must expand the area of
agreement in the trying times
ahead. And trying times they will
be. We must enlarge our military
outlays and related programs, when
we had hoped to be able to reduce
them further. We must realize that
the engagement in Korea will be |
costly and may not be short. We
must prepare against the possibility
that other crises may arise else
where. We must continue to recog-
nlze that both economic and mill
tary aid will be required for the
further strengthening of the free
peoples of the world.
All of this means new problems
for our economy-s soluble problems,
but not easy ones.
Our economy has the human and
material resources to do the Job
ahead-if we achieve the unity
which will enable us to do our best.
Production and Supply.
The productive strength OF the
American economy is basic to our
domestic well-being and our inter-
national security. Under current
conditions, We face a twofold task:
f1rSt, to get as much total produc-
ton as we can; and second, to en-
phasize the right kind of produc-
ton and the best utilization of the
product.
Increased production of the right |,
kind of goods will lessen inflation-
airy strains. If we allow imitation to
develop by failing to take adequate
measures, it will cost more to meet
our military requirements, and it ,
Will be more difficult to maintain
the smooth functioning of the eco
nomic machine and the high civil
ian efficiency and morale which
are foundations of our military
strength.
Some sacrifice (of domestic con-
sumption is called for, and I am
confident that the American people
are ready to do their part. But in
determining sound policy at this
time, we should measure the re-
Quirements of the present world
situation against the recent growth
and productive power of our eco
nomy, and its capacity for further
growth
Our total output of goods and
services, measured in constant dol
lars (1949 price leveD, was about |
ISL billion in 1929. BY 1899, it was
about 100 billion. In 1916, the first
full year after the war, it was about |
248 billion. Two years later, in 194S,
it was about 256 billion.
Despite the moderate recession in
1949, our total output is now run
ming at an annual rate of about 267
billion dollars. This rate is about
13 billion dollars higher than year
ago, and about billion higher than
In the peak quarter of 1948. It is
more than 100 billion dollars higher
than in 1889. All of these figures are
stated in terms of the 1949 price
level, and, therefore, reflect real
changes.