Address in Philadelphia at the American Legion Convention.

Mr. Commander, members of the Auxiliary, comrades of the American Legion:

I am happy to be here with the American Legion again at their annual convention.

At the Legion convention last year, I talked to you about your Government's efforts to achieve world peace based on freedom and justice. Today, I am going to talk to you again about peace, because I think that is the most important thing in the world, and I know that you agree with me.

Last week at Miami, before another convention of veterans, I discussed our efforts to protect nations against aggression and to preserve the principles of the United Nations. I talked about our collective security agreements and the necessity of providing military aid to other countries to support those agreements.

Today, I would like to talk about another equally important aspect of our efforts to achieve a lasting peace--that is, our international economic policy.

I find that there is a good deal of misunderstanding and misinformation about our international economic policy. Some of this is deliberately stirred up by certain newspapers and politicians strictly for political reasons. Some of it is due to the fact that the economic problems of the world seem to be distant from our daily lives and hard to understand.

World economic problems are undoubtedly complex. But their importance to us is very clear. World prosperity is necessary to world peace. Furthermore, world prosperity is necessary to our own prosperity here in the United States. If these facts are kept in mind, it will be easier to understand what this country is trying to do.

In working for prosperity in the postwar world, the nations of the world face new problems--and greater ones than they have ever faced before. They are suffering from the terrible after-effects of the war, which caused an almost complete breakdown of European industry and of world trade. There is also the rising demand of men all over the world for independence, and for a greater share of the good things of life which only a restored and expanding economic system can bring. Added to these two problems there is a third. This is the attempt of organized communism to achieve economic and political domination of the world through the misuse of the desires and aspirations of mankind.

These problems require the combined efforts of the free nations. Together, we must repair the damage of war, complete the restoration of the economy of Europe, and revive world trade. We must go forward to establish an expanding world economy in which men everywhere can work to satisfy their desire for freedom and a better life. We must demonstrate that the economic system of the free nations is better than the system of communism.

The free nations are determined to avoid the mistakes of the past. The roots of the present economic problems go back to the First World War. After that war, the nations of the world made the mistake of following narrow and shortsighted policies of economic nationalism. Each country, working for its own selfish interest, tried to get the best of the others. Each nation erected trade barriers to keep out the products of other nations. You all remember Hawley-Smoot and what it did to the country eventually. Each nation tried to dump its own products in foreign markets.

These policies were self-defeating. They achieved neither national nor international prosperity. Instead, they helped to bring on the worst depression the world has ever seen.

Factories dosed down all over the world. Ships lay idle in harbors. Surplus crops rotted in the fields. Unemployment grew and hunger became widespread.

In every country, there were hundreds of thousands of young men and women without jobs and without hope for the future. Many of these young people became the prey of unscrupulous demagogues. They joined the Black Shirts of Italy and the Storm Troopers of Germany. They were the tools of the Japanese militarists. In the end, they marched to war under the bloody banners of those dictatorships.

Before the end of World War II, we resolved that the international economic chaos which had led to war should not occur again. We knew that permanent peace could not exist if the nations of the world resumed the policy of dog-eat-dog.

Consequently, the United States joined with other nations to prepare for a peaceful economic world. The International Monetary Fund was set up to deal with exchange and monetary problems among nations. The International Bank was established to provide investment capital for reconstruction and development. In our proposals for a world trade organization, the United States outlined a method for breaking down the trade barriers which had strangled world commerce in the period between the two wars. As the war ended, we made billions of dollars available to relieve suffering and repair the damage of war. We are proud of that accomplishment.

These were good beginnings. Never before in history had nations made such careful, long-range plans for a better economic future. For the first time in the history of the world the victors attempted to bring the vanquished back to life and to prevent their people from starving to death. It has never been done before in the history of the world. And I am proud we did it.

Shortly after the war ended, however, it became apparent that the economic life of the world was more badly disrupted than anyone had expected.

Still further difficulties were created when it became clear that the Soviet Union would not join in working for world economic recovery. Russia was hostile to European economic cooperation. Russia refused to join in the European recovery program, and prevented its satellites from joining. Russia's aggressive foreign policy created alarms and fears that hampered recovery. On every hand, there was evidence that the policy of the Soviet Union was aimed at prolonging the distress and suffering of free nations.

If we had been discouraged by these difficulties and had abandoned our efforts, the results would have been disastrous. Once again the streets of Europe would have been filled with crowds of hungry and hopeless men and women. Once again, unscrupulous agitators would have used these angry millions to create tyranny and slavery.

But the nations did not let this happen. The free nations went ahead with our recovery programs. As a result, production has risen greatly in Europe. Men and women there have jobs and food and a hope for the future. They know that the democratic way is the way of hope.

The free nations have overcome the danger of immediate postwar collapse, but we have yet to achieve the sound and expanding world economy that is necessary for a lasting prosperity and peace.

This larger task is the one that now confronts us.

The free nations have the resources and the means to accomplish that task.

Together, they have most of the industrial capacity of the world. They have vast supplies of raw materials. They have industrious and skillful populations. The free nations together have all the elements necessary to provide a better way of life for mankind. What is needed is to draw these elements together into a continually expanding and productive international economy.

Such a world economy is vital, not only to the cause of world peace, but also to our own national prosperity and security. We in the United States depend upon foreign countries for many vital minerals and other raw materials. Without foreign trade, many of our industries would suffer. Without foreign trade, for example, it would be difficult, if not impossible, for us to develop atomic energy. Moreover, we need to sell many things abroad. Our cotton, our wheat, our tobacco, for example, must have foreign markets. Our prosperity would be seriously damaged if the export of our products were cut off.

We cannot, therefore, fall back into economic isolationism. Instead, we must take every action we can to bring about more trade, expanding markets, and growth and development in other countries as well as our own.

One of the most serious difficulties we face is the fact that, at present, foreign nations need to buy more things from us than we need to buy from them. They have called upon us for food and raw materials in unprecedented amounts. Furthermore, many countries need equipment and machinery, which only we can supply, if they are to develop their own resources and raise their own standards of living.

The urgent demand which foreign countries have for these things far exceeds their present ability to pay for them. As a result, world trade is now seriously out of balance.

We have both short-range and long-range plans for meeting these difficulties. We will continue the European recovery program as our principal means of meeting emergency needs in the next 3 years. At the same time, we are moving ahead with long-range measures.

We are encouraging American business to make productive investments abroad in increasing volume. Through such investments, foreign countries--especially underprivileged areas--will be able to obtain the equipment that they so desperately need.

We are also planning to help the people in underprivileged areas to learn modern industrial and agricultural methods. By this means, they will be able to double and redouble their production. By this means, they will be able to make an increased contribution to an expanding world economy and a balanced world trade.

In addition, we must continue our well established policy of negotiating reciprocal trade agreements in order to reduce barriers to international trade. These agreements enable us to buy more from other nations at the same time that they help to maintain markets abroad for our own products. We must increase our buying abroad if we are to achieve a balanced world trade.

Furthermore, we are encouraging closer regional ties among nations in order to lower trade barriers and increase .production.

The nations of Europe, under the stimulus of our aid, are working toward closer ties of economic union. Already, through the Organization for European Economic Cooperation, they have begun to make joint decisions that affect their basic economic policies. In the Council of Europe, now meeting at Strasbourg, more far-reaching measures of European union are being considered.

Closer economic union means a difficult period of transition for the countries that enter into it, but it is essential for a better world. The United States will do what it can to aid the European nations to achieve greater unity.

As we go ahead with these long-range measures for a stable and growing world economy, we shall have to adjust our actions to changing conditions. We shall need to be alert to new developments, and turn to advantage every possible resource.

We shall be concerned in the months immediately ahead with certain special and urgent problems arising out of the present unbalanced state of world trade. Representatives of the United Kingdom and Canada will soon be here to discuss some of these problems. We look upon these talks as discussions among friends about problems which affect us all, and in the solution of which we all have a common interest. The people of this country are well aware of what the war meant to Great Britain and of the stresses and strains which have been laid upon the British people in recent years. The representatives of the United Kingdom will find here a warm personal welcome and may be assured that these mutual problems will be examined by us in a spirit of friendliness and helpfulness.

In our discussions with the representatives of the United Kingdom and Canada, as in our approach to problems with other nations, we must keep clearly in mind the basic underlying principles upon which the economic policy of the free nations must be based.

The first principle which we should clearly understand is that a sound and expanding world economy is essential to world peace. International economic discussions revolve around such prosaic things as tobacco and rubber and rates of interest and the value of currencies. But, behind all these, lie the great objectives of satisfying the material and spiritual needs of mankind and preserving democratic freedom.

The second principle which should be clearly understood is that we are trying to expand the exchange of goods and services among nations. Sound and prosperous relations among nations rest upon the exchange of goods and services on a business basis. We are not engaged in a charitable enterprise. We are not looking for trick solutions to deep-seated problems.

The third principle is that we cannot succeed in creating a sound and expanding world economy unless we keep everlastingly at it. There are times, no doubt, when we shall become impatient or annoyed by delays and obstacles. But we cannot throw in our hand and walk out of the game. Nor can any other nation afford to do that. The path of mutual adjustment and combined economic effort is not an easy one. The economic interests of nations are not easily reconciled. No group can get all it wants. But there is no other way to the solution of our difficulties than the way of mutual concession and cooperation.

The fourth principle is that the democratic nations are not proposing to interfere in one another's internal politics. We know very well how we would feel if some foreign nation tried to tell us how to vote. We recognize that each nation has its own political problems and that it uses different political labels and different slogans from those we use at home. In the same way, nations have different business practices and different governmental devices for achieving the same economic ends.

A community of democratic nations cannot insist on uniformity in matters of politics or business. The only uniformity on which they can insist--and this is what binds them together as free nations--is a firm adherence to democracy--true democracy, not the fake kind put out by the Communists-coupled with a common desire to improve the standard of living of all of their citizens.

On the basis of these four principles, the free nations of the world can solve the difficulties which confront them. On the basis of these principles, they can achieve their goal of a sound and expanding world economy.

There is one more thing for us, as Americans, to remember. Our country is the most important economic unit in the world today. The future of the world depends upon the continuation of our own economic growth and development. If we can continue to increase our national income, and to raise our standards of living, the solution of international economic problems will be far less difficult.

Every one of us has a responsibility in building a peaceful world, and I am very sure that there is not a man here who does not want to see that peace in the world in the future. We can contribute to that cause in our daily lives, in our jobs, in our thinking. We contribute to peace when we work for the prosperity and growth of the United States. We contribute to peace when we reject the claims of those selfish interests, here and abroad, that would turn us against the cause of international cooperation. We contribute to peace when we ask for Divine guidance and help for the efforts of mankind to establish understanding and good will among the nations of the world.