Remarks to the National Advisory Council of the Small Business Administration.

I WANT to express my appreciation to all of you for coming here, m have a chance to discuss with you those governmental policies which can be of assistance to small business--over 4 million of them in this country--and they provide a very important element of the free enterprise system.

The free enterprise system, the whole presumption, really the whole theory has been an opportunity for men to go to the market and, if they can meet the competition, to maintain themselves. This is primarily a system which depends upon the judgment of the private citizens of this country, their judgment in the market, the businessmen, the workingmen, all the rest, but the Federal Government does have, though it seems to be regarded as somewhat controversial, an important role to play.

The monetary and fiscal policy of the Federal Government can influence the economy up or down. The tax policy of the Federal Government can either stimulate or retard the economy, and we have spent a good deal of time in this administration in the last 2 years attempting to develop a coordinated policy to provide a stimulation to this country's economy in those areas where the Federal Government actions do affect the economy.

I think that we learned from the experience at the end of the fifties, where we had two recessions in 3 years, that the Federal Government's role dealing with interest rates, tax policy, the amount of surplus or deficit that may be in the budget, all these things have an effect upon an economy which is rather finely balanced. We are not satisfied.

I saw in yesterday morning's paper where the growth of the countries in Eastern Europe had been nearly 11 percent in the last decade; in Western Europe, 5 1/2 to 6 percent; and in the United States, 3 percent. So we have a major job to do to provide jobs for about a million and a half people coming into the labor market every year and a million more people who are displaced by automation.

So I want you to know that we are very much interested in your views.

The Employment Act of 1946 placed clear responsibility upon the Government to do what it could to assist the economy to move forward. We intend to carry out that injunction. We operate under that statute. We are doing everything we can to be of assistance, and the tax program is particularly beneficial to small business. It carries with it several provisions which I supported as a Member of the Senate, which Senator Fulbright, I remember, introduced and offered and, in fact, it was defeated by a narrow vote in the Senate in the fifties, which give particular advantages to businessmen, the first $25,000. It also has advantages to partnerships and all the rest. So I think that this will be of measurable assistance to you. It provides a $10 l/2 billion reduction over a period of 18 months, but that by the multiplier of economics can move, according to the Joint Committee on the Economic Report, to between $30 billion and $40 billion in the economy.

So I think we have a good chance to move ahead if we carry out our policies and learn something from the past.

Your views, your judgments are very helpful because I would like to see this country's small businessmen improve and expand and not have the control over economic life in either the hands of the Government or a few larger groups. You represent a good deal of what this system is all about. So I am very glad to have you here.