Remarks at 14th Annual Washington Conference of the Advertising Council.

Mr. Cutler and My friends:

It seems to have become an annual habit for me to come over to meet the members of the Advertising Council. for my part, it has been a pleasure. At least, it gives me an opportunity not only to welcome you back again in the Capital for your deliberations here, but to thank you for the great work you have done on behalf of the public and on behalf of America.

I notice, too, that in my discussions with you, I have constantly referred to the world situation, starting with the need of our country and the need of all civilization for peace, talking about the situation as we see it now and what are some of the important tasks we have to get done if we are going to get even one tiny step further toward that objective.

I see no reason this year for changing the pattern. Our prime need is still peace. Our great threat is still a dictatorship that is insensitive to human values, that is tyrannical and will not give up its publicly announced purpose of subjugating the world by one means or another--in other words, to bring about the so-called "revolution of the proletariat" and establish the world under a Communist philosophy under the control of the Kremlin.

This threat of theirs, of course we know, is no idle boast. They have built a tremendous military machine and they have shown a very great skill in inventing, developing and using weapons of the most destructive power the world has known.

Now, all of this, combined with their readiness and their skill in using propaganda, and its political and economic penetration, poses for us a broader threat than we pictured even just one year ago.

While we believed then they were concentrating more on the military threat, yet now we see the Soviets at least partially blocked in their readiness to threaten weaker nations with military power and to bring about an uneasiness and unstable political situation in neighboring smaller countries. They turn more and more to the economic, the political, the propaganda types of invasion of these other countries.

Now for ourselves we know that the basis of our defense is a highly efficient and strong military force. Without going into details of that type of force--I am certain that several of these panels, as a matter of fact the one I see now here before you, have given you a very clear concept of the types and characters of weapons, and therefore the formations and methods that must be used--I want to talk just a little bit about the organization of the defense force itself.

I have a friend--all of you know him, he is the head of one of our greatest corporations--and he gave me a bit of an analogy the other day that struck me forcibly. And each time I have tried its use upon a business man, he has acknowledged with a smile that he believed he saw a need for military modernization more keenly and clearly than he before had done.

The analogy of this one, my friend said, is that most people know how a good business is conducted--a corporation with its Board of Directors and it Chief Executive and the channeling of instructions of the Board and the policies it adopts through that Executive Officer's order. It gives to him a great wide latitude in his operational plan which in its broad outlines is approved by the Board. In all, little changes he has to make--sometimes they are financial, sometimes they are in other different programs that don't seem to be moving--are always within the limits of policies established by the Board, but the Board clearly recognizes not only his right but also his duty to do these things to keep ahead of their competition.

Now, he said, "This is the thing I would like to put before you. Let's assume that this Board of Directors does not hold the Chief Executive so responsible as I have just pictured. Instead, the Board brings before them the heads of the several functional divisions of the corporation and the heads of those groups that are subsidiaries or wholly-owned subsidiaries. They talk about how to go about their plans and programs and give them certain general instructions, even to the extent of giving them general guidance or even specific guidance for their budgets." He said, "Well now, in any kind of competition such a company would be bankrupt. The profit and loss sheet very quickly would show it to be a very weak sort or organization, and the Board of Directors would either have to reform or to just get out of business." "Now," he said, "that is the only thing, as far as I can see, that the Defense Department needs--to get responsible executive authority, clearly established in the Secretary of Defense."

And I believe this is the nub of the thing we are talking about.

Now he is not a czar! He does not get authority because he likes it. He does not get authority merely because he happens to be commanding three million people in our Services. He gets authority from the Congress, which constitutionally establishes armies and establishes policies for their conduct, and all the rest of it. But it must be recognized that this rapidly changing technology of ours--with the power of weapons, with the speed with which destructive force can be brought against us-does not give an opportunity for the military forces to be commanded or controlled by pre-conceived directives and detailed directives that are not in themselves unified by the authority of a single individual who is responsible for operations.

This is what we are talking about. To state it very clearly: the strategic plan that our country uses to control or to defend itself against a threat--if such a threat would eventuate--is the business of one authority, because it can be a single plan. It must be a single plan. You cannot be fighting in the South Pacific when you think and the government thinks you should be fighting in the Noah Atlantic. It is a single strategic plan, and it is controlled and directed and operated by a single authority: the Secretary of Defense and the Commander-in-Chief.

Now, the only additional power that this Secretary needs is that supervisory control over all parts of the Defense Department that allows him to say, "You, you and you will give such and such logistic, administrative and supply support to these people who are fighting under my direction." He must have that authority or he cannot operate a unified defense of our country. And so I say in this whole business there are two words that describe our purposes: safety and solvency.

The reason I go to the side of solvency is this. Over the past five years, only for our defense establishment we have spent something like two hundred billion dollars. If, in a peaceful world, we could have used those two hundred billions through private spending or public service, we can scarcely imagine the United States that we now could have. With all of our schools built, all of our roads built and all of our hospitals built that we would need for the next ten years with every one of them splendidly equipped, there would still be ten billion dollars rather than forty for the defense establishment. We still would have something like fifty billion dollars to retire some of our public debt. But if we take this forty or more billion dollars now that we are planning annually to spend--and remember, every cent of it comes from the clothing you wear, the food you eat, the shelter you have--this goes right on down to the last person in the United States. We recognize that this sum is one that must be treated seriously, and with its effect upon our economy and on our people's welfare must be carefully studied so as to minimize its economic impact on each family in the country.

So reorganization is not only effectiveness in operations, but efficiency in the production of every weapon, every soldier, every unit throughout the whole military establishment so we can keep to the bare minimum these tremendous sums we are called upon to spend.

Because, my friends, we are looking toward an era of some ten, fifteen, twenty--maybe even forty--years ahead. We have got to know how to carry these sums without damaging our economy, without inducing us to go to the easy road of economic controls or price controls and all that sort of thing. We want a free economy, so we have got our own responsibility: that of securing the country, staying solvent, not only in the sense of not becoming bankrupt but staying solvent in our possession of those values that we so treasure.

The word economy, of course, brings to my mind for a moment the state of our economy. I am one of those whose faith in this country is complete--in its readiness, and its power to become constantly more prosperous, more economically strong, and more morally and spiritually strong. I simply believe that no one can ever lose by buying America in any way they want to buy it--with their time, with their effort, with their dedication in public service, with their money--any way. America is the concept that must guide all of us and give to each of us a feeling of tremendous confidence.

As of this moment none of us is going to pretend that everything is going economically as we would like. We are not in one of those periods that we describe either as a boom or as steady progress toward greater prosperity, higher standards and greater fiscal strength in our nation. And there are numbers of things that have been done by the federal Government--and will be done--to inspire this economy of ours to get back on a better road, a road that is leading higher, rather than somewhat downward or crookedly, on to a level of prosperity.

If we are talking about, either in savings or in extra expenditures, of a total, let us say, of 15 billion dollars altogether, we would still be talking about only an infinitesimal part of a 430-billion-dollar GNP (Gross National Product) which this country is bound to have this year, even with all of the downturn in the economy. So it is 430 billion dollars of effort, the most of which is by 173 million separate people. Their work, their desires, the satisfaction of those desires and all of the forces and the economic activity that comes out of the satisfaction of wants is what brings this country along.

Now, the Federal Government can do some part of this--will do some part of it--is doing some part of it. But by and large, ladies and gentlemen, I can't think of any greater opportunity for such a body as this than to make every American understand that if he is not scared, he can go ahead--if he wants to.

And now, I would like to go from the economy to speak of a subject that affects our own economy. The first subject about which I spoke was the measures we take to be safe militarily and economically from the threat that comes from the Kremlin. How, I want to talk for a moment about world trade, to speak of it because of its economic effects upon ourselves.

World trade last year was about one hundred billion dollars. One fifth of that was conducted by our country alone. four and a half million American workers are engaged all the time--full-time jobs--in foreign trade. Our exports, of course, exceed our imports by a very definite measure. We send abroad about ten and a half billion dollars worth of manufactured goods and bring in something a little over three billion from foreign countries. The ratio is more than three to one in our favor, and as I say, four and a half million people are manufacturing these things.

If we were suddenly to cut off that, or stifle it by any unwise action, we would immediately have a tremendous impact on our labor force, and likewise on the materials that come into the country that we need to have. Most of the imports--I think it's something on the order of ten billion dollars--are raw materials that range from everything from rubber to mica, platinum and nickel--you people know what they are. America needs those things to run its business today. We sell so that they can buy our things, and we buy so they can sell. If we don't do it, our economy will be shrunken and shriveled by the measure that is indicated by the figures I have given you.

But, of course, there is a wider implication, a wider meaning of this whole program of freer trade than that of the immediate effect upon our economy. It is the development of peaceful conditions in this world and strengthening our position vis-a-vis the Kremlin. If we can trade with these countries and if they can trade with us, they are bound to us by economic forces that reinforce all of the spiritual unity that we may experience when we stand against tyranny, against dictatorship, against Communism. But if we are not so reinforcing our spiritual and political aspirations among ourselves, then where do these people go to trade? Just one place: the Kremlin.

We cannot possibly afford the economic loss, and above all, we cannot afford the political losses that would be ours if these countries, compelled to go into the Communist orbit by economic requirements, then begin to embrace the economic doctrine as the only thing left for them. I think each of you can see what would happen to our bases, to every single spot on the earth where we are sending aid to help local troops and local populations to stem the tide. You can understand how they would not be able economically to support their own forces. You would see that they could not possibly withstand the political and propaganda pressures that would be brought against them.

Now since this economic invasion of the Soviets has started, we calculate something over two billion dollars has been sent by them in credits abroad, at very low rates of interest--two percent and so on. But more than that, they are showing a greater and greater readiness to indulge just in barter trade. And in barter trade, since they can set their price any way they want, any time they want, and under any conditions, we are handicapped unless we take hold of this problem in the most sensible, logical and comprehensive way we possibly can.

To put on unconscionable tariffs--to establish broadly-based quotas-would be ruinous to America, to America's safety and certainly to its prosperity. This is something, my friends, that I bespeak your consideration for every single waking day. In the government, in the administrative halls of this government, there is not a day when the three subjects that I have suggested to you this morning do not have our undivided attention. They are: (1) the defenses of our country, the character of their reorganization and their proper economical administration; (2) the economy of this country--what can be done--what should not be done, which is just as important; and (3) the helping of our friends in the world to get that economic base for themselves so that they can lead a decent life and stand with us in their belief for the material benefits that come from the kind of spiritual values that our country has always worshipped and followed.

If we can help them establish that economic base, then they, too, can march by our side as sturdy, valued allies. And indeed, if we can do these things across the world and do them well, then I say the threat of Communism will recede--until that day, finally, when we can win a true and real peace.

I have kept you much longer this morning than I intended, but I am a little bit like one of those televisions that run by remote control. Someone pushed the button and I couldn't stop. And I am sorry. Thank you very much and goodbye.