Address at the Forrestal Memorial Award Dinner of the National Security Industrial Association.

Mr. Chairman, Mr. Folsom, Mr. Chief Justice, my fellow Americans:

It is indeed a high honor that you pay me. I am touched by the terminology in which you have seen fit to commend me, and though I shall be somewhat embarrassed each time I read it, I assure you that my pride will be equal to my embarrassment, and I will read it often.

Moreover, to receive an award bearing the name of James Forrestal is indeed a great distinction. I am deeply grateful to. all of you, and to the National Security Industrial Association.

I was privileged to be associated closely with James Forrestal during the final years of his life. He was devoted to the public good. There has been no stauncher patriot nor anyone more far-sighted in perceiving the evil designs of Communist imperialism. At my first meeting with him, during World War II, he expressed his grave fear that Communist Russia would emerge from the war as a threat to individual liberty and freedom. To these he was completely dedicated.

Now, central among the many concerns of his sweeping mind was the great free economy of America. He knew that in peace and war, this economy is the source of our military strength. He knew that unless this economy were kept healthy, strong, and expanding, there would be for the free world neither victory in war nor security in peace.

In the vitality of this system, James Forrestal had complete faith. He did not mistakenly think of our economy merely in terms of broad acres and mighty industries, of railroads and ships, and mines and factories. Though all these we have, he clearly saw that it is America's people-farmers, teachers, shipbuilders, scientists, executives, machinists, truck drivers, all living under a system that encourages individualism--who are directly responsible for the near miracle of our great productivity.

Consequently, he was skeptical of excessive governmental interference with our economy in times of peace. He well recognized the need for the Government to prevent or correct monopolistic concentrations, as well as unemployment and agricultural dislocations. Yet he saw just as clearly the evils of regimentation.

His faith in America was rooted in his conviction that, by and large, and over the long pull, we could and would cooperate, one with another, for the benefit of all. He believed that in an America at peace, a combination of private citizen and local and Federal Government, operating together under wise regulatory laws and accepted practices, would sustain our priceless liberties and rights, while producing for each of us an ever-rising prosperity and standard of living.

Of this economy that so engaged the study and interest of James Forrestal, I shall speak tonight. More specifically, I shall speak of certain functions that, I believe, our Government must perform to keep our economy growing, stable and strong.

It has been truly said that the state of our economy is largely a national state of mind.

For 20 long years, somewhere in the world there has been war--up until a few months ago. Thus, for almost a generation, tragedy and happiness--waste and plenty--foxholes and jobs--have been tightly joined together in people's minds. Many came to believe that these had to live together or not at all--that, without war, without the mountainous demands of the battlefield, modern industrial America would always overproduce, forcing unemployment and a downward economic spiral, and ultimately cascading all of us into the terrible pit of depression.

As war year succeeded war year, this attitude toward our Nation's economy exacted a heavy toll. It stunted growth. It warped economic behavior. It blighted confidence and discouraged needed investments that thrive on confidence. Many of our people were frightened into grasping more for security and protection than for new opportunity and a fuller life.

But, in the past 2 years, there have been heartening events. They should release tremendous economic energies and, for all of us, open the door to a happier future. For, in 2 years, we have again demonstrated that America's prosperity does not necessarily depend on war's sacrifice.

Without war, our economy is working at near record levels. Over 62 million people have jobs. The number is steadily increasing. The hours of work are getting longer. Consumers are spending at a higher rate than ever before. Construction records are being broken month by month. Wage rates are at their all time peak. Weekly earnings in manufacturing are again on the rise. Our people have more personal income after taxes than ever before. Our national production surpasses even the war peak of 1944. It is far above the levels of 1945 through 1952.

We know that, if we act wisely, before us is continuing expansion, with a steady rise in the living standards of all our people.

To foster this expanding economy must be our Government's domestic goal.

In so conducting our affairs, we must never lose sight of the fundamental fact that our economy succeeds only as our people succeed. On the release of the treasure house of energy, brains, and confidence of all 163,000,000 of our people, depends our economic future.

Drawing on the richly varied abilities of our entire citizenry, we can foresee that in less than a decade the national output will increase from today's $356 billion to $500 billion. This would equal an average increase of more than $3,000 for every American family of today. And these can be real dollars--dollars of stable buying power, not simply more dollars of cheapened value.

And while our people in their daily tasks are bringing this about, Government must intelligently and vigorously do its part.

Government must work to stabilize the buying power of the dollar, else the value of the pension, the insurance policy, and the savings bond is eroded away.

Government, through social security and by fostering applicable insurance plans, must help protect the individual against hardship and help free his mind from anxiety.

Government must use its full powers to protect its citizens from depression, unemployment, and economic distress.

Government, my friends, must have a heart as well as a head. It must encourage, guide, backstop, and supplement--but never dominate or attempt to regiment our people.

Events of recent months provide lessons we must not ignore.

A year ago, inflation was halted. Defense expenditures were being reduced. Wartime economic stilts that many thought were essential props for business were being cut down. New floods of automobiles, appliances, and other products had swept away civilian market shortages. We were shifting from the shortage economy of war to the plenty of peace.

And why wasn't the result chaos and economic despair, as many feared?

First, because taxes were cut. Citizens could devote fewer hours to meeting governmental obligations and more to their own living requirements. Seven billion four hundred million tax dollars are being left with our people to spend at a time when their buying power needs to be sustained. This saving is evident every time a citizen opens a pay envelope, goes to the movies, takes a train or a bus trip, buys a refrigerator. For all of our citizens--from working mothers with dependents in their homes, to wage earners with heavy medical bills, to business needing to expand and thereby to create more jobs--the tax burden has been reduced. Thus our national adjustment from wartime to peacetime was eased. And our economy was given added strength.

Now, second, government powers over money and credit were used to stabilize the buying power of the dollar. They were used in January 1953 to stop the spiraling inflation which could have resulted in serious unemployment and depression. Later, as this risk diminished, the process was gradually reversed to ease credit markets and encourage economic expansion. This helped people to buy homes, automobiles, and household appliances. It encouraged them to construct new plants, manufacture equipment, build new shopping centers. It stimulated State and local public works. In these ways, our Nation avoided liquidations which in the past brought on panics, widespread unemployment, and despair.

The objective of these measures, I repeat, was to release individual enterprise and initiative--to maintain confidence among consumers and investors, among businessmen and working people.

Other measures also have helped to sustain our economic strength.

Social security was extended to 10,400,000 more people, including, for the first time more than 5 million farmers. Thus hundreds of millions were added to the buying power of our elderly people.

The protection of unemployment insurance was extended to some 4 million workers not previously covered.

A new housing law helped our people acquire new homes and encouraged building throughout the country.

In carrying out farm laws still in effect, basic crops were supported by loans and purchases amounting to $1,646,000,000 in the current fiscal year. At the same time, a new farm program was carefully evolved to attack the problems of markets, production, and surpluses which, for 7 years, have forced a steady decline in farm income.

Strategic materials, essential to our military strength, are being purchased in an amount of $900,000,000.

A new multi-million dollar program of shipbuilding and repair is keeping in operation needed shipbuilding facilities and creating many jobs.

In these and many other ways, Government has helped to keep our Nation's economy on an even keel. And the result? This year 1954 is our most prosperous peacetime year in all our history.

This picture is marred, of course, by the fact that in certain industries and localities unemployment still exists as the aftermath of war and inflation. It is a matter of deep concern to all of us when people, looking for work, cannot find it. Unemployment figures are far more than statistics. They reflect heartache--anxiety--hardship--and ultimately, loss of confidence in our country's future. It is not only in the interests of the jobless workmen but for the benefit of all of us, that the problem be solved.

It is essential to create more jobs and to ease these war-born hardships. Good progress is being made. Since last spring unemployment has been steadily declining. Still more progress is needed. There is certainly no comfort for us in the mere fact that the unemployment level is much lower today than during the recession of 1949 and 1950, or in the fact that unemployment today is less than one-third its level in the years 1933 to 1940, when as many as 10,000,000 Americans were out of jobs and couldn't find them.

I should like to interrupt myself here, to give you a report that reached me just late this afternoon. It came from the Secretary of Commerce and the Secretary of Labor jointly. It is the latest report on unemployment. In this month, it has been reduced by 400 thousand jobs.

In that period, unemployment has fallen from 3,100,000 to 2,700,000. I have asked the Secretary of Labor, incidentally, in a nationwide telecast tomorrow night, to give to the public all of the facts that we have on this employment and unemployment situation.

Incidentally, I might remark, as I look at this head table, this seems to me, or feels to me like the second Cabinet meeting I have had since 7 o'clock this evening.

I sincerely hope that most if not all of you got to hear the report from Secretary Dulles, a report that carries for all of us so much of promise, because of its evidence of growing strength in Western Europe.

I repeat that a central reason for our overall economic growth is confidence that the American economy will meet the tests of peace.

I believe that it is high time, in this great, growing, productive land of ours, to put behind us the rash of fears that for so long have haunted some among us--fear of war, fear of unemployment, fear of ourselves--fear of the future. Certainly, we know now that one such fear--the fear of paralyzing depression--can be safely laid away.

But we must not rest. In our economy, to stand still is to fall behind. Our labor force is growing. Productivity is rising. We must do more than simply to plan against trouble or accept unemployment at its present level. Rather, we must advance toward and beyond the goal I mentioned earlier--within 10 years, a national production of 500 billion dollars.

This means that we must do a number of things.

First, we must develop a foreign economic program that will expand trade, encourage investment, help bring about currency convertibility, and reduce the need for direct aid to other countries. This program will expand markets for our goods abroad. It will help improve our standard of living, as well as the security and solidarity of the entire free world. Our economy can grow only as part, though a vastly important part, of a growing free world economy. Just as there is no security for America in isolation, neither is there durable prosperity.

Second, we must continue to reduce the cost of Government, so we can have more tax cuts. Already in 2 years we have cut Federal costs by 11 billion dollars. To the limit that national security will permit, we must make more savings and return them, in the form of lower taxes, to the American people. Tax cuts will add still more to private income and expenditure. They will stimulate the continued growth of the economy. For every dollar cut down on Federal expenditures, I believe we can, with reasonable assurance, expect a two-dollar expansion in our private economy.

Third, we must give America a modern highway system. In addition to easing the Nation's traffic problems, we will, by this great program, powerfully stimulate healthy economic growth and strengthen the Nation's security.

Fourth, we must continue to improve our farm program. As the American farmer keeps on increasing his productivity--already the highest in the world--he must be helped to gain his fair share of the steady increase in our national income.

Fifth, we must speed the conversion of the atom to the peaceful service of mankind--incidentally, a program on which we never give up for one minute. We proceed with all of our friends in working out ways and means for doing this.

Sixth, we must work for more and better schools and homes. We must improve opportunities for teachers. We must further improve our social security system. We must provide better protection against the hardships of old age, ill health, poverty, and unemployment.

Seventh, in partnership with States, local communities, and private citizens, we must develop the water, power, and soil resources of our great river valleys.

In these and other ways, we shall continue economic progress for all America in a world at peace. Thus we shall assure every citizen of maximum opportunity to enjoy good health and a good job, a good home and a good education, and a rising standard of living.

Three basic facts are important in this forecast.

First, of course, is our free way of life.

Second is our rapidly growing population.

Third is the amazing variety of new products of our technology.

Our population grows at a rate of five new Americans every minute. We have grown by 20 million in the past 10 years. By 1970 we will number 200 million souls. Simply to keep up with our needs for homes, and factories, and schools, and roads, and goods for all these additional Americans will powerfully stimulate expansion of our economy. And, to provide us a higher standard of living, it must expand even more.

This expansion is entirely within our power. Doubters need only to look at some of the new frontiers science opens to us almost daily--in plastics, new metals, peacetime atomic developments, antibiotics, television, aeronautics. Today more than twice as many of our people work in research and development as were so working a dozen years ago. America now invests four billion dollars a year in scientific research and development. No money is better invested in our Nation's future.

In my own lifetime, from my boyhood in Kansas to this day, I have seen automobiles, radio, television, telephones, electricity, tractors, power machinery, new insecticides, fertilizers, good roads, and modern schools all come to rural America. If in this time--because I'm not so awful old--so much could be done, I know that America's tomorrow will be still more exciting, still more productive, filled with more and better things for all our people.

We must, therefore, encourage our economy along the ways of healthy expansion and be vigilant to keep it vigorous and free.

My friends, there remains one thought, the most important of all, that I must leave with you. It is that only when we win the struggle for permanent peace can we devote the full power of this mighty country of ours to the advancement of human happiness.

America's greatest hope and opportunity is to make strong and lasting the present uneasy peace that has so lately come to the world. With our great economic strength, we have no reason for fear. If we exercise wisdom, if we maintain our faith in the genius and energy of our people, if we avoid the centralization that is the refuge of fear, our economy will remain healthy and growing and strong.

With this strength, with this confidence, our Nation will be fortified in its quest for world peace--a quest that must never cease, never slacken, until the final goal has been attained.

This, our deepest aspiration, a precious dream that was shared by James Forrestal, will, with God's help, one day be realized. Then the true road to enduring happiness and prosperity will open to us and to all the world.

My friends, again permit me to express my very great pride in this award and in the compliment that I have been paid by this entire gathering.

Thank you.