The President's News Conference

THE PRESIDENT. First of all, ladies and gentlemen, let me assure you that I welcome this opportunity to meet with representatives of the radio and press, many of them old friends of mine, and to continue the kind of relationship that I have had in the past with them. I look forward to many of these meetings during the ensuing 4 years.

Now, one of the topics that made an interesting subject for speculation during the past few months was a thought that I would develop a great deal of antagonism for the press. I wouldn't know why. I feel that no individual has been treated more fairly and squarely over the past many years now, that I have been dealing with them, than I have by the press. Through the war years and ever since, I have found nothing but a desire to dig at the truth, so far as I was concerned, and be open-handed and forthright about it. That is the kind of relationship I hope we can continue.

Now, of course, you know we can talk here all day. There are a lot of things in a big country such as ours, and the kind of world we are living in, that make interesting subjects for conversation. My next appointment is in my office at 11 o'clock. This morning I have chosen four subjects that I think are of immediate interest, both in the domestic scene and in the international scene, that can stand a little bit of discussion. Thereafter, we will use such time as you might want, to ask questions on these subjects, and then if there is a little time left, why we can extend it even wider and see if there are other questions of which you might like to inquire.

The first one that I want to talk about is farm prices. I want to read to you a sentence from the Republican Platform: "A prosperous agriculture, with free and independent farmers, is fundamental to the national interest."

Now, that is a simple generalization that involves a terrific amount of work, a terrific amount of planning and study; and much of it has been going on for the past 20 years or more--a great deal of it on a bipartisan basis. But the point I want to emphasize is this: just simple control of an industry through arbitrary governmental power is easy, but it means control clear across the board. And that is something we neither want in our national life as a system or as a practice, nor will the farmers, the most independent, I think, of all of our citizens, stand it for a minute.

So the programs that we devise must have at their basis--one of their fundamentals--this retention of this right of freedom on the part of the farmer.

Now, we have had, for the past 2 years, falling prices. Manifestly, every problem that I can talk to you about today is an inherited problem. These Republicans have been in office, you will recall, only since January 20, and we have scarcely had time to do more than to begin earnest study of these problems. And they, in a complex society such as ours, go slowly, ordinarily.

We have had falling farm prices for 2 years. In January 1952, that late, beef was $34.22 a hundred pounds, and the peak had been passed a year earlier than that, in February 1951. By November that price had fallen to $31.00, by January 24 of this year, $25.51. It continued to fall down to approximately $24.00--$23.90. But since the removal of controls on the price of beef--something that was earnestly requested by the beef growers, let me assure you--beef has gone up a bit, and started back up the other way.

In addition, this removal of price controls has had one effect that the beef growers thought it would, which was narrowing the gap between the amount that the farmer received on the farm and the amount you were paying at the meat market. The reason for that was because the regulation required a very severe gradation of beef. Those restrictions have been removed, and the gap has been somewhat narrowed, so that while the retail prices are still down at their lowest point, the other prices have started up a little bit.

In addition to this, of course, the second the problem first arose, we urged upon and directed the armed services--the procurement agencies of the armed services--to procure and maintain a maximum supply of beef. They can usually carry a 120-day supply very easily with no danger of spoilage. They have been going up in their reserves, in order to help in the support of this beef price.

Now let me point out that this whole farm program is a serious thing. Beef prices are an immediate and interesting thing, and have occasioned quite a bit of discussion in the press and in governmental circles. But all the way through--today we are buying butter at a million pounds a day, and that butter, of course, in time grows rancid. We have other stocks in storage, altogether I think--of farm products--there is something over a billion dollars' worth of these stocks in storage.

What I am pointing out again is that even those stocks would be vastly increased except for two things: the subsidization we give to exports through this wheat distribution pool--I forget its exact name, but you people will know it, so we won't worry about it.¹ It's a big pool now meeting in which we subsidize our wheat exports to the tune of about 70 cents a bushel. Then, on top of that, the different kinds of aid we give abroad, which provide the dollars so that the wheat can be bought. If it weren't for those two features, our surpluses would be very much greater.

1 The President referred to the Commodity Credit Corporation Wheat and Flour Export Program which facilitated exports to member nations of the International Wheat Agreement.

I merely show--and I must emphasize here--that it is a very complicated problem. But above all things, let me emphasize this: all through the campaign I stated--and promised--to the farmers of America: we will support the present law which goes, as you know, to December 1954, and in the meantime, we will convene commissions. We have one now--the Advisory Commission, Department of Agriculture, has on it representatives of all branches of agriculture, and we try, of course, to put on people representing the public. So, any plan devised to take effect after the expiration of the current law, will represent the thinking of America--not only of the producers but of the consumers and everybody else--so as to get as broadly based a program as it is possible to get.

Everybody, of course, sympathizes with the farmer's plight, with the special difficulties he has in his industry; and I refer you again to that sentence of the Republican Platform, which I certainly intend to do my best to carry out.

The second point I want to raise, and very briefly, is this thing of secret agreements. By no means do I assume that it is either feasible or desirable that the United States Government should take any action, just saying everything t. hat was agreed to at such and such a place, or such and such a spot, or at such and such a time, is repudiated; by no manner of means.

I do believe this: it is necessary that this Government make clear that never has the heart of America agreed to the enslavement of any people. And in the proper way--the thing is still under study as to the exact, proper, way--we are going to make clear that determination with some kind of pronouncement that can leave no doubt that it means exactly what it says.

Another subject that has occupied some space in the newspapers is price controls. We, of course, are moving in the direction of attempting to unshackle the economy and to allow it to operate so as to keep up standards of living--in the belief that, with many of our peak problems in wartime production already solved, the workings of the economic laws will keep prices in their proper relationship one to the other.¹

¹On February 6 the White House announced two major actions in the direction of eliminating wage and price controls. These actions included (1) immediate suspension by Executive order of all wage and salary controls, and (2) issuance by the Office of Price Stabilization of orders removing from price control a wide and varied list of consumer goods, including all meat products, all furniture, all apparel, and many other items. The release stated that this was the first of a series of orders under which all prices would be decontrolled.

Now, we had a situation that was very difficult to meet, and no one would attempt to minimize the problem that past officials working on these problems had to solve. We went in June 1950 into a situation that did not call for total mobilization, the kind of a situation in which we have come to expect full controls. But neither was it peace. We had a war production problem thrown on our economy that threw things out of balance. It was difficult to get control of such a situation and keep it in balance. And finally, these prices did get pretty badly disarranged.

If what we are now trying to do cannot accommodate the situation, and a bad result is obtained, I have no hesitation in saying I will go right back to Congress and ask for whatever we believe to be necessary.

We do think that the present situation calls for this removal of controls which is going on, as you know, now, gradually; and as a result we believe that the situation will take care of itself very definitely. Some prices will go up. Many will go down. But in any event, people will be free of the threat and continued annoyance of governmental interference in everything that they do.

Of course, such a decision represents something of my faith that American business leaders, American labor leaders, and others will face this problem as I am trying to face it, honestly and fairly, and will remember that it is not well to try to gouge or do anything unreasonable in this situation that would create the kind of economic emergency that would demand a further action by the Congress--further price control system.

Now I realize that when you say that, you are saying quite a bit. I am talking by and large about the mass of these people. And I must say I could have no greater disappointment than to be forced to go back to Congress and say: "Well, this just won't work; we have got again to our price controls."

I want to say just a word about this matter of the atom bomb. I am going to read to you a statement that you probably have all read. I want to read this statement again, merely to announce that every bit of evidence leads me to say I agree with this statement, by the Chairman of the Atomic Energy Commission, absolutely.

It starts: "The U.S.S.R. has produced fissionable materials in quantity. With fissionable materials in hand, it is not a difficult technical job to make workable atomic weapons. The U.S.S.R. has exploded three--one in the late summer of 1949, two in 1951. On the basis of the above facts, and other scientific and technical evidence, there is no doubt of the existence of a supply of atomic weapons."

I have been asked that question so often, ladies and gentlemen, I merely want to say that so far as I am concerned, that is absolutely true--word for word.

And now, our last subject: taxes. In spite of some things that I have seen in the papers over the past 8 or 9 months, I personally have never promised a reduction in taxes. Never.

What I have said is, reduction of taxes is a very necessary objective of government--that if our form of economy is to endure, we must not forget private incentives and initiative and the production that comes from it. Therefore, the objective of tax reduction is an absolutely essential one, and must be attained in its proper order.

But I believe, and I think this can be demonstrated as fact by economists, both on the basis of history and on their theoretical and abstract reasoning, that until the deficit is eliminated from our budget, there is no hope of keeping our money stable. It is bound to continue to be cheapened, and if it is cheapened, then the necessary expenses of government each year cost more because the money is worth less. Therefore, there is no end to the inflation; there is finally no end to taxation; and the eventual result would, of course, be catastrophe.

So, whether we are ready to face the job this minute or any other time, the fact is there must be balanced budgets before we are again on a safe and sound system in our economy. That means, to my mind, that we cannot afford to reduce taxes, reduce income, until we have in sight a program of expenditures that shows that the factors of income and of outgo will be balanced. Now that is just to my mind sheer necessity.

I have as much reason as anyone else to deplore high taxes. I certainly am going to work with every bit of energy I have towards their reduction. And I applaud the efforts of the people in Congress that are going in that way. But I merely want to point out that unless we go at it in the proper sequence, I do not believe that taxes will be lowered. We might for the moment lower the "chit" you get for this year, but in the ensuing years, it would be a very different thing.

Now, ladies and gentlemen, I have covered my four subjects, and we will take, first, a period of addressing questions to these. I will see if I can answer any of them. I believe that you are to introduce yourselves to me.

Q. Merriman Smith, United Press: Mr. President, in connection with your farm statement, do you plan to ask Congress for standby control powers?

THE PRESIDENT. On price--did you say price controls?

Q. Mr. Smith: Yes, sir.

THE PRESIDENT. Price controls. On price controls, I do not intend to ask for standby controls. I believe that if any standby control bill is enacted it must be in very general terms. I do not believe that you can, at this moment, foresee the conditions of a future, 3 months or 6 months from now, and write the details of a law that would fit it. Therefore, it would have to be in very general terms, and I will accept that if they do it.

Q. Edward T. Folliard, Washington Post: Mr. President, you are so emphatic in what you said about taxes, that I would gather, sir, that you would veto a tax reduction bill, if one should be passed by Congress?

THE PRESIDENT. Well, you must know, Mr. Folliard, we don't have any item veto authority. In the executive department you have to veto a bill, a total bill--and you never know how a thing like that might come up to you. So I couldn't possibly predict in advance what would be my action. I assure you of this: the simple thoughts I have expressed on the subject this morning will govern me just so far as it is possible to be governed in this line.

Q. Raymond P. Brandt, St. Louis Post-Dispatch: Mr. President, will the administration sponsor a bill to retain the excess profits tax which expires on June 30th?

THE PRESIDENT. I would say this--I can't answer that in exact terms--I shall never agree to the elimination of any tax where reduction in revenue goes along with it. In other words, it would have to be a substitute of some kind in that same area.

Q. Mr. Brandt: Are you thinking along those terms, sir?

THE PRESIDENT. My people are.

Q. Sarah McClendon, Texas papers: Mr. President, are the press conferences in the future to follow along this form?

THE PRESIDENT. Ladies and gentlemen, there are a lot of you that know me, and you know I am rather apt to change a habit at any time. Let's don't take this one as a necessary pattern. If we find some method among us that would be more convenient, an hour, or a day, or anything else, I am certainly open to suggestions; I have never thought I had quite all the answers. So I should say as time goes on we will see what happens, and I would hope that they at least will be friendly. That would be the only basis I would want to retain for certain.

Q. Alan S. Emory, Watertown (N.Y.) Times: Mr. President, this is somewhat allied to the beef problem. There is also a considerable problem in relation to dairy prices these days. I wonder if you would endorse the proposal to keep hearings on problems such as dairy prices, as close to the farmers involved as possible?

THE PRESIDENT. Indeed I do. On that problem, I might tell you that all the representatives of the dairy industry are in the Department of Agriculture this morning, discussing their problem. And I would tell you this: everything that has been said and done in the agricultural field since January 20 has been on the basis of an advisory commission I appointed last December. It has been meeting, and we have brought in different panels on wool, sugar, now dairy, there have been about six different panels, and they cover the industries, so far as I know.

Q. Andrew F. Tully, Jr., Scripps-Howard Newspapers: Mr. President, have you discovered any other secret agreements besides the one signed at Yalta?

THE PRESIDENT. Personally, I have discovered no secret agreements. I use the word "secret" in this respect: when they were made, they were necessarily secret. They remain secret on this basis: they have never been presented to the Senate for their advice and consent, and therefore they never have achieved the standing of public treaties.

So, I am merely talking about those and only those parts of agreements that appeared to help the enslavement of peoples or, you might say, have been twisted by implication to mean that.

Q. Richard Harkness, National Broadcasting Company: Mr. President, we have had in the last 10 days or 2 weeks a welter of statements regarding Korea, statements attributed to Gen. James Van Fleet regarding an offensive, statements attributed to the testimony of Mr. Dulles--supposedly secret testimony, a statement by a Senator that we might use Formosa as an air base to bomb the mainland of China, every conceivable kind of statement. Can you say anything this morning to clarify this situation?

THE PRESIDENT. No, I think I could say very little, except this: let's take General Van Fleet. He will come back--he is my classmate--he will undoubtedly come in to see me. If you people would like to see him, I will ask him, as a favor to me, to have a press conference if you like; because I think the more all of us know about the conditions over there, about how our soldiers are faring, what the situation looks like, the better for all of us. I believe in facts.

Now I don't know about these statements that you talk about, but I have said this publicly time and again: in these matters affecting the broad policy of the United States, and not mere expedients within the proper purview of the responsibilities of a mere Commander in Chief, they will never be undertaken until they are discussed with the proper leaders of the Congress; and if necessary they will have to act on them. I don't believe in doing these things haphazardly and on an individual and arbitrary basis.

Q. Mrs. May Craig, Portland (Maine) Press Herald: If I may go back to the secret agreements a moment, are you aware that many Members of Congress on both sides feel that the agreements were never binding, anyway, because they were not presented to Congress--to the Senate?

THE PRESIDENT. Well, I think there are, in our practice, certain things that are of course binding when the people are acting as proper representatives of the United States--say, in war, as in establishing staffs and commands and that sort of thing. That extends out into some fields that are almost politico-military in nature. I do agree that nothing can have the binding force of a treaty on us until it is submitted to the Senate--that's what I am trying to get at.

Q. Mrs. Craig: Sir, are you aware that many Members of Congress also feel that the President had no right to take us into Korea without consulting Congress, also that he had no right to send troops to Europe without consulting Congress? Now I would like to ask

THE PRESIDENT [interposing]. Mrs. Craig, I want to say this one thing.

Q. Mrs. Craig: Yes sir.

THE PRESIDENT [continuing]. That all took place long before I came to this office. I have a hard time trying to determine my own path and solve my own problems. I am not going back and try to solve those that someone else had.

Q. Mrs. Craig: I wanted to ask you if you had given thought to your relationships with Congress in those fields.

THE PRESIDENT. Mrs. Craig, indeed I have. I don't believe that this Government is set up to be operated by anybody acting alone. I think it is clear what our founding documents mean; and I intend to function, as far as I am concerned, in that way.

Now, we have always demanded that in an emergency where there was no time, not even hours, then someone had to act. In natural disasters--in Corpus Christi, or storms overseas--just this recent storm where our friends suffered such disaster in Holland and other countries--then they expect somebody to do something. But in the normal case, we have our system of consultations laid out, and it will be followed, as far as I am concerned.

Q. Joseph A. Fox, Washington Evening Star: Is it intended eventually, sir, to replace all the Americans in Korea with South Korean troops?

THE PRESIDENT. I don't want to discuss such things in too great detail, but I would say this: I do not believe that as long as the United Nations carries responsibility over there, that they can--as long as there is a dangerous situation--remove themselves completely from the whole area. I do believe this at the same time, which I have stated before publicly: the South Koreans are good soldiers, and they really want the opportunity of defending themselves so far as that is possible--namely, they want to be on the front lines, and it is merely a question of armaments, organization, and the leadership which, of course, is difficult to provide. But as fast as they can go up there, other United Nations troops will be pulled back. The military authority will have to decide how many of those people have to stay in order to make certain of the carrying out of the responsibilities we picked up.

Q. Richard L. Wilson, Cowles Publications: Are you considering recommending an embargo or blockade of any kind against shipments into Red China?

THE PRESIDENT. That has not been discussed with me except in the papers. There has been no study on it that has been brought up yet to me. So personally I am not--the answer is, I have no answer.

Q. Leslie R. Honeycutt, Army Times: Mr. President, does your reorganization plan on the Federal Security Agency contemplate any transfer of VA functions to that department?

THE PRESIDENT. I would be glad to answer you--I think I know it, but I just could be wrong; and I will answer that the next time. I think I know the exact answer, but I don't want to make a mistake.

Q. Laurence H. Burd, Chicago Tribune: Back to taxes, can you say when you hope to have the budget balanced?

THE PRESIDENT. No, because, as you know, the 1954 budget was prepared and submitted to the Congress before the Cabinet officers that I have appointed came in. They are digging into every obligation, every authority asked for, to try to find those places where savings can be made.¹

¹ On February 3, the White House issued the following release relating to the Budget:

"With the approval of the President and following his State of the Union Message to the Congress, Joseph M. Dodge, the Director of the Bureau of the Budget, has established policies, concurred in by the Cabinet, to be applied in arriving at recommendations for revisions of the fiscal year 1954 Budget.

"These policies today are being transmitted by Mr. Dodge to all Department and Agency heads in the Executive Branch.

"General. It is clear that the Budget will not be brought under control without action to reduce budgetary obligational authority, reduce the level of expenditures, critically examine existing programs, restrain commitments for new programs, and generally drive for greater efficiency and reduced costs.

"Personnel. It is the policy to achieve a progressive reduction of Government personnel. To accomplish this each Department and Agency head shall immediately restrict the hiring of additional personnel. No vacancies shall be filled until it has been determined that the positions represented by vacancies cannot be eliminated; existing employees cannot be shifted to cover the vacancies; and increased efficiency, better utilization of personnel, or changes in standards and policies make the additions unnecessary.

"Construction. It is the policy to proceed only with projects which are clearly essential, and on such projects to employ the strictest standards of economy. "All proposed or authorized construction projects on which work has not yet begun (Footnote continued on following page ) are to be reviewed and construction initiated only on those projects which meet these criteria.

"All going construction projects are to be reviewed according to the same criteria and appropriate action taken, including action to stop the work if this appears advisable.

"Programs. It is the policy to operate at a minimum level of costs and expenditures. This requires that the necessity for all work be questioned and action be taken to eliminate unnecessary programs and hold the remainder to minimum levels.

"The January rate of obligation by the Department or Agency shall not be increased except on complete justification and specific approval, unless such increases are dearly necessary to meet requirements fixed by law.

"There will be an immediate review directed toward recommendations for a downward adjustment of program levels and the probable effect of such adjustments.

"Legislation. Recommendations pertaining to the 1954 Budget are to include the possibilities of making adjustments in subsequent budgets where it appears advisable that legislation now in effect should be amended or repealed.

"New legislative proposals which affect financial requirements are to be reviewed in the light of these budget policies.

"Timing. All proposals for specific revisions of Department and Agency Budgets are expected to be transmitted to the Bureau of the Budget as early as possible in March for the consideration of the President."

Now, already, as you know, in the fiscal year which is now rapidly drawing to a dose, there is a 5.9 [billion dollar] deficit. That can't be closed. That is just too late, although we are closing some, by cutting down deficiency appropriations. Then there is a, I think, 9.9 deficit for 1954 contemplated.

That is what we are working on. When that happens, then I think the United States can heave a sigh of relief and we can begin to look toward tax reduction.

Q. Robert J. Donovan, New York Herald Tribune: Could I ask you, if I understand this right, on the embargo, that the question of an embargo or blockade has not been brought up to you at all?

THE PRESIDENT. It has not been brought up officially to me. Naturally, I discuss these things with a good many people, but there hasn't been a study made in the proper sections of the Government and brought up to me for action and decision.

Q. Mr. Donovan: These are not actively under consideration by you at the present time?

THE PRESIDENT. By me? They are under consideration, I suppose in several departments. Not by me.

Q. G. Gould Lincoln, Washington Evening Star: Mr. President, this is a political question. Mr. Stevenson said in New York he fears that your administration might become a "big deal," because of the businessmen you have appointed to office. Do you have any such fear?

THE PRESIDENT. Do you? [Laughter]

Look--let me make myself clear, and I don't mean to brush off a question that easily. First of all, I am not going to engage in any semantics that are directed toward gaining fancied political advantage. I haven't time. What I should like to point out is this: I have lived with the American people. I have lived very intimately with those people, these youngsters, that we have sent out to fight our battles. I can't conceive of having to answer the accusation that I am not concerned with 158 million Americans.

Now we have a Defense Department that spends two-thirds of all the money we appropriate. And it seems to me if we are going to make a big savings in that place, we have got to get some businesslike practices there. I deliberately went out to find the men that I thought had made the biggest record for efficiency in business, to get into that department.

Now, in the other departments of the Government, I have tried to find people that I thought fitted, and I haven't paid the slightest attention to whether they were in business or not. I have tried to pick people on character, and I think they have character; I think they are going to do a grand job for the United States of America.

And with that little bit of--as he called it--political speech-with that, ladies and gentlemen, for the morning, goodbye; I will see you again.