Evening star., 1951-01-12


economic problems, as TRANSMIT
this fifth annual Economic Re
port. than at any time since tn
end of World War II. Although
our economic strength is nov
greater than ever before, yer,
large new burdens of long dura
ton are now being imposed upon il
The United States is pledge.
and determined. along with othe
free peoples, to check aggression
and to advance freedom. w
invite disaster if We underesti
mate the forces working agains
us.
Unity is imperative on tht
economic front. On this front
under the American system
everybody is involved - ever!
businessman, worker and farmer
every banker and scientist ano
housewife; every man and WON.
an. We can win our way
through to ultimate triumph Il
we all pull together. Decisive
action, essential to our safety
should not be halted by contro.
versy now.
Nature of the Task.
We must understand the nature
of our defense effort here al
home. Our job has three parts
In the first place, we must
achieve a large and very rapid
increase in our armed strength
while helping to strengthen our
allies. This means more trained
men in uniform. and more planes
tanks. ships. and other military
supplies. Second, we must achieve,
as rapidly as possible, an expan-
sion of our capacity for producing
military supplies. And third, we
must maintain and expand our
basic economic strength-impor-
tant both to military production
and to our civilian economy-so
that we can continue to grow
stronger rather than weaker if
it should prove necessary to con-
tinue a defense effort of great
size for a number of years.
The first part of this task-the
primary military buildup-im-
poses the major immediate burden
on the economy.
S140 Billion Outlay Seen.
For the fiscal year 1851 and 1852
combined, new obligational au-
thority enacted or anticipated for
our primary national security
programs will probably total
more than S140 billion. Actual
expenditures on these programs in
the fiscal year 1850, the last full
year before the Korean outbreak.
totaled about $18 billion. -.
Current expenditures for these
purposes now represent about
per cent of our total national
output. BY the end of this year,
this proportion may rise to as
much as IS per cent. This COM
pares with the roughly As per
cent of our total output that we
were devoting to defense during
the peak year of World War
II.
In terms of manpower, our
nresent defense targets will re-
ouire an increase of nearly mil
lion men and women in the armed
forces within a few months. ana
probably not less than 4 million
more in defense production by Ine
end of the year. :,
These manpower needs will call
both for increasing our labor
force by reducing unemployment
and drawing in women and older
workers, and for lengthenlng
hours of work in essential indus
tries.
Plant Diversion Seen.
The second part of the job Is
to build up our capacity for pro-
ducing military supplies-our mil
itary production base.
, There are many cases where
our immediate production needs
will require the diversion OF plants
now devoted to civilian produc-
ton. but we cannot be satisfied
with this solution alone. We must
increasingly create new capacity
to meet defense production tar
gets. ...
The third part of the job is to
increase our basic industrial
strength-to build up our facll1-
ties for the production Of steel,
aluminium, power and other basic
commodities and services. -.
Electric power is another field
in which we must expand ca
pacity promptly. In the face
Of this situation, we should plan
to increase our generating ca
pacity by we'll over 20 million
kilowatts during the next three
years. =.
Can Perform Task.
There is no question that our
economy can sustain the great eX-
ertions outlined above, and still
remain strong and grow stronger
In the 10 years since this Ma
ton decided that fascist aggres-
sion had to be stopped. the growth
of our economic power has been
prodigious. Comparing 1850 with
1910, our total output, in actual
units of goods and services, is more
than so per cent higher. Farm
production is up Is per cent. The
total labor supply has increased
by 9 million, and civilian employ
ment by 13 million. >. Steel ca
pacity is up more than 20 per cent;
oil refining capacity up 40 pei
cent; electric power capacity up
70 per cent. 80.
There has been very recent DEM
onstration of our economic power
and of our capacity for further
growth. The total output OF
goods and services during the yeal
1850 was per cent higher, in real
terms, than during the previous
year. 1t is now running at ar
annual rate more than 10 pei
cent above the average for 1949