Mr. President, Mr. Speaker, Members of the Congress:

A year ago I reported to this Congress that the state of the Union was
good. I am happy to be able to report to you today that the state of the
Union continues to be good. Our Republic continues to increase in the
enjoyment of freedom within its borders, and to offer strength and
encouragement to all those who love freedom throughout the world.

During the past year we have made notable progress in strengthening the
foundations of peace and freedom, abroad and at home.

We have taken important steps in securing the North Atlantic community
against aggression. We have continued our successful support of European
recovery. We have returned to our established policy of expanding
international trade through reciprocal agreement. We have strengthened our
support of the United Nations.

While great problems still confront us, the greatest danger has
receded--the possibility which faced us 3 years ago that most of Europe and
the Mediterranean area might collapse under totalitarian pressure. Today,
the free peoples of the world have new vigor and new hope for the cause of
peace.

In our domestic affairs, we have made notable advances toward broader
opportunity and a better life for all our citizens.

We have met and reversed the first significant downturn in economic
activity since the war. In accomplishing this, Government programs for
maintaining employment and purchasing power have been of tremendous
benefit. As the result of these programs, and the wisdom and good judgment
of our businessmen and workers, major readjustments have been made without
widespread suffering.

During the past year, we have also made a good start in providing housing
for low-income groups; we have raised minimum wages; we have gone forward
with the development of our natural resources; we have given a greater
assurance of stability to the farmer; and we have improved the organization
and efficiency of our Government.

Today, by the grace of God, we stand a free and prosperous nation with
greater possibilities for the future than any people ever had before in the
history of the world.

We are now, in this year of 1950, nearing the midpoint of the 20th
century.

The first half of this century will be known as the most turbulent and
eventful period in recorded history. The swift pace of events promises to
make the next 50 years decisive in the history of man on this planet.

The scientific and industrial revolution which began two centuries ago has,
in the last 50 years, caught up the peoples of the globe in a common
destiny. Two world-shattering wars have proved that no corner of the earth
can be isolated from the affairs of mankind.

The human race has reached a turning point. Man has opened the secrets of
nature and mastered new powers. If he uses them wisely, he can reach new
heights of civilization. If he uses them foolishly, they may destroy him.

Man must create the moral and legal framework for the world which will
insure that his new powers are used for good and not for evil. In shaping
the outcome, the people of the United States will play a leading role.

Among all the great changes that have occurred in the last 50 years, none
is more important than the change in the position of the United States in
world affairs. Fifty years ago we were a country devoted largely to our own
internal affairs. Our industry was growing, and we had new interests in the
Far East and in the Caribbean, but we were primarily concerned with the
development of vast areas of our own continental territory.

Today, our population has doubled. Our national production has risen from
about $50 billion, in terms of today's prices, to the staggering figure of
$255 billion a year. We have a more productive economic system and a
greater industrial potential than any other nation on the globe. Our
standard of living is an inspiration for all other peoples. Even the
slightest changes in our economic and social life have their effect on
other countries all around the world.

Our tremendous strength has brought with it tremendous responsibilities. We
have moved from the outer edge to the center of world affairs. Other
nations look to us for a wise exercise of our economic and military
strength, and for vigorous support of the ideals of representative
government and a free society. We will not fail them.

Our objective in the world is peace. Our country has joined with others in
the task of achieving peace. We know now that this is not an easy task, or
a short one. But we are determined to see it through. Both of our great
political parties are committed to working together--and I am sure they
will continue to work together--to achieve this end. We are prepared to
devote our energy and our resources to this task, because we know that our
own security and the future of mankind are at stake.

Right here, I want to say that no one appreciates more than I the
bipartisan cooperation in foreign affairs which has been enjoyed by this
administration.

Our success in working with other nations to achieve peace depends largely
on what we do at home. We must preserve our national strength. Strength is
not simply a matter of arms and force. It is a matter of economic growth,
and social health, and vigorous institutions, public and private. We can
achieve peace only if we maintain our productive energy, our democratic
institutions, and our firm belief in individual freedom.

Our surest guide in the days that lie ahead will be the spirit in which
this great Republic was rounded. We must make our decisions in the
conviction that all men are created equal, that they are equally entitled
to life, liberty, and the pursuit of happiness, and that the duty of
government is to serve these ends.

This country of ours has experienced many blessings, but none greater than
its dedication to these principles. At every point in our history, these
ideals have served to correct our failures and shortcomings, to spur us on
to greater efforts, and to keep clearly before us the primary purpose of
our existence as a nation. They have enshrined for us, a principle of
government, the moral imperative to do justice, and the divine command to
men to love one another.

These principles give meaning to all that we do.

In foreign policy, they mean that we can never be tolerant of oppression or
tyranny. They mean that we must throw our weight on the side of greater
freedom and a better life for all peoples. These principles confirm us in
carrying out the specific programs for peace which we have already begun.

We shall continue to give our wholehearted support to the United Nations.
We believe that this organization can ultimately provide the framework of
international law and morality without which mankind cannot survive. It has
already set up new standards for the conduct of nations in the Declaration
of Human Rights and the Convention on Genocide. It is moving ahead to give
meaning to the concept of world brotherhood through a wide variety of
cultural, economic, and technical activities.

The events of the past year again showed the value of the United Nations in
bringing about the peaceful adjustment of tense international
controversies. In Indonesia and in Palestine the efforts of the United
Nations have put a stop to bloodshed and paved the way to peaceful
settlements.

We are working toward the time when the United Nations will control weapons
of mass destruction and will have the forces to preserve international law
and order. While the world remains unsettled, however, and as long as our
own security and the security of the free world require, we will maintain a
strong and well-balanced defense organization. The Selective Service System
is an essential part of our defense plans, and it must be continued.

Under the principles of the United Nations Charter we must continue to
share in the common defense of free nations against aggression. At the last
session this Congress laid the basis for this joint effort. We now must put
into effect the common defense plans that are being worked out.

We shall continue our efforts for world economic recovery, because world
prosperity is the only sure foundation of a permanent peace.

As an immediate means to this end we must continue our support of the
European recovery program. This program has achieved great success in the
first 2 years of its operation, but it has not yet been completed. If we
were to stop this program now, or cripple it, just because it is
succeeding, we should be doing exactly what the enemies of democracy want
us to do. We should be just as foolish as a man who, for reasons of false
economy, failed to put a roof on his house after building the foundation
and the walls.

World prosperity also requires that we do all we can to expand world trade.
As a major step in this direction we should promptly join the International
Trade Organization. The purpose of this organization, which the United
States has been foremost in creating, is to establish a code of fair
practice, and an international authority for adjusting differences in
international commercial relations. It is an effort to prevent the kind of
anarchy and irresponsibility in world trade which did so much to bring
about the world depression of the 1930's. An expanding world economy
requires the improvement of living standards and the development of
resources in areas where human poverty and misery now prevail. Without such
improvement the recovery of Europe and the future of our own economy will
not be secure. I urge that the Congress adopt the legislation now before it
to provide for increasing the flow of technical assistance and capital
investment in underdeveloped regions.

It is more essential now than ever, if the ideals of freedom and
representative government are to prevail in these areas, and particularly
in the Far East, that their peoples experience, in their own lives, the
benefits of scientific and economic advances. This program will require the
movement of large amounts of capital from the industrial nations, and
particularly from the United States, to productive uses in the
underdeveloped areas of the world. Recent world events make prompt action
imperative.

This program is in the interest of all peoples-and has nothing in common
with either the old imperialism of the last century or the new imperialism
of the Communists.

Our aim for a peaceful, democratic world of free peoples will be achieved
in the long run, not by force of arms, but by an appeal to the minds and
hearts of men. If the peace policy of the democratic nations is to be
successful, they must demonstrate that the benefits of their way of life
can be increased and extended to all nations and all races.

In the world today we are confronted with the danger that the rising demand
of people everywhere for freedom and a better life may be corrupted and
betrayed by the false promises of communism. In its ruthless struggle for
power, communism seizes upon our imperfections, and takes advantage of the
delays and setbacks which the democratic nations experience in their effort
to secure a better life for their citizens. This challenge to us is more
than a military challenge. It is a challenge to the honesty of our
profession of the democratic faith; it is a challenge to the efficiency and
stability of our economic system; it is a challenge to the willingness to
work with other peoples for world peace and for world prosperity.

For my part I welcome that challenge. I believe that our country, at this
crucial point in world history, will meet that challenge successfully. I
believe that, in cooperation with the other free nations of the world, we
shall extend the full benefits of the democratic way of life to millions
who do not now enjoy them, and preserve mankind from dictatorship and
tyranny.

I believe that we shall succeed in our struggle for this peace, because I
have seen the success we have had in our own country in following the
principles of freedom. Over the last 50 years, the ideals of liberty and
equal opportunity to which this Nation is dedicated have been increasingly
realized in the lives of our people.

The ideal of equal opportunity no longer means simply the opportunity which
a man has to advance beyond his fellows. Some of our citizens do achieve
greater success than others as a reward for individual merit and effort,
and this is as it should be. At the same time our country must be more than
a land of opportunity for a select few. It must be a land of opportunity
for all of us. In such a land we can grow and prosper together.

The simple truth that we can all go forward together is often questioned by
selfish or shortsighted persons. It is strange that this is so, for this
proposition is so clearly demonstrated by our national history. During the
last 50 years, for example, our Nation has grown enormously in material
well-being. This growth has come about, not by concentrating the benefits
of our progress in the hands of a few, but by increasing the wealth of the
great body of our Nation and our citizens.

In the last 50 years the income of the average family has increased so
greatly that its buying power has doubled. The average hours of work have
declined from 60 to 40 a week, the whole hourly production of the average
worker has tripled. Average wages, allowing for price changes, have
increased from about 45 cents an hour to $1.40 an hour.

We have accomplished what to earlier ages of mankind would have been a
miracle--we work shorter hours, we produce more, and we live better.

Increasing freedom from poverty and drudgery has given a fuller meaning to
American life. Our people are better educated; we have more opportunities
for travel and recreation and enjoyment of the arts. We enjoy more personal
liberty in the United States today than ever before.

If we can continue in the spirit of cooperative adventure which has marked
the recent years of our progress, we can expect further scientific
advances, further increases in our standard of living, and a still wider
enjoyment of democratic freedom.

No one, of course, can foretell the future exactly. However, if we assume
that we shall grow as fast in the future as we have grown in the past, we
can get a good idea of how much our country should grow in the next 50
years.

At present our total national production is $255 billion a year. Our
working population and our output per worker are increasing. If our
productive power continues to increase at the same rate as it has increased
over the past 50 years, our total national production 50 years from now
will be nearly four times as much as it is today. Allowing for the expected
growth in population, this would mean that the real income of the average
family in the year 2000 A.D. would be about three times what it is today.

These are estimates of what we can do in the future, but we can reach these
heights only if we follow the right policies. We have learned by bitter
experience that progress is not automatic--that wrong policies lead to
depression and disaster. We cannot achieve these gains unless we have a
stable economy and avoid the catastrophes of boom and bust that have set us
back in the past.

These gains cannot be achieved unless our businessmen maintain their spirit
of initiative and enterprise and operate in a competitive economy. They
cannot be achieved unless our workingmen and women and their unions help to
increase productivity and obtain for labor a fair share of the benefits of
our economic system. They cannot be achieved unless we have a stable and
prosperous agriculture. They cannot be achieved unless we conserve and
develop our natural resources in the public interest. Our system will not
work unless our people are healthy, well-educated, and confident of the
future. It will not work unless all citizens can participate fully in our
national life.

In achieving these gains the Government has a special responsibility to
help create and maintain the conditions which will permit the growth we
know is possible. Foremost among these conditions is the need for a fair
distribution of our increasing prosperity among all the great groups of our
population who help to bring it about-labor, business, agriculture.

Businessmen must continue to have the incentives necessary for investment
and for the development of new lines of enterprise. In the future growth of
this country, lie possibilities for hundreds of thousands of new and
independent businesses. As our national production increases, as it doubles
and redoubles in the next 50 years, the number of independent and competing
enterprises should also increase. If the number does not increase, our
constantly growing economy will fall under the control of a few dominant
economic groups whose powers will be so great that they will be a challenge
to democratic institutions.

To avoid this danger, we must curb monopoly and provide aids to independent
business so that it may have the credit and capital to compete in a system
of free enterprise. I recommend that the Congress complete action at this
session on the pending bill to close the loopholes in the Clayton Act which
now permit monopolistic mergers. I also hope before this session is over to
transmit to the Congress a series of proposals to strengthen the
antimonopoly laws, to assist small business, and to encourage the growth of
new enterprises.

In the case of labor, free collective bargaining must be protected and
encouraged. Collective bargaining is not only a fundamental economic
freedom for labor. It is also a strengthening and stabilizing influence for
our whole economy.

The Federal statute now governing labor relations is punitive in purpose
and one-sided in operation. This statute is, and always has been,
inconsistent with the practice of true and effective collective bargaining.
It should be repealed and replaced by a law that is fair to all and in
harmony with our democratic ideals.

A full understanding of the problems of modern labor relations is of such
importance that I recommend the establishment of a labor extension service
to encourage educational activities in this field.

Another essential for our continued growth is a stable and prosperous
agriculture. For many years we have been building a program to give the
farmer a reasonable measure of protection against the special hazards to
which he is exposed. That program was improved at the last session of the
Congress. However, our farm legislation is still not adequate.

Although the Congress has properly declared as a matter of national policy
that safeguards must be maintained against slumps in farm prices, there are
serious shortcomings in the methods now available for carrying out this
policy. Mandatory price supports should be provided for the commodities not
now covered which are major sources of farm income.

Moreover, we should provide a method of supporting farm income at fair
levels which will, at the same time, avoid piling up unmanageable surpluses
and allow consumers to obtain the full benefit of our abundant agricultural
production. A system of production payments gives the greatest promise of
accomplishing this purpose. I recommend that the use of such a system be
authorized.

One of the most important factors in our continued growth is the
construction of more good, up-to-date housing. In a country such as ours
there is no reason why decent homes should not be within the reach of all.
With the help of various Government programs we have made great progress in
the last few years in increasing the number of homes.

Despite this increase, there is still an acute shortage of housing for the
lower and middle-income groups, especially in large metropolitan areas. We
have laid the groundwork for relieving the plight of lower-income families
in the Housing Act of 1949. To aid the middle-income families, I recommend
that the Congress enact new legislation authorizing a vigorous program to
help cooperatives and other nonprofit groups build housing which these
families can afford.

Rent control has done a great deal to prevent the housing shortage from
having had worse effects during this postwar period of adjustment. Rent
control is still necessary to prevent widespread hardship and sharp
curtailment of the buying power of millions of consumers in metropolitan
areas. I recommend, therefore, that rent control be continued for another
year.

If we are to achieve a better life for all, the natural resources of the
country must be regarded as a public trust. We must use our precious assets
of soil, water, and forest, and grassland in such a way that they become
constantly more productive and more valuable. Government investment in the
conservation and development of our resources is necessary to the future
economic expansion of the country.

We need to enlarge the production and transmission of public power. That is
true not only in those regions which have already received great benefits
from Federal power projects, but also in regions such as New England where
the benefits of large-scale public power development have not yet been
experienced.

In our hydroelectric and irrigation undertakings, as well as in our other
resource programs, we must continue policies to assure that their benefits
will be spread among the many and not restricted to the favored few.

Important resource legislation which should be passed at this session
includes the authorization of the St. Lawrence seaway and power project and
the establishment of the Columbia Valley Administration--the establishment
of the Columbia Valley Administration, I don't want you to miss that.

Through wise Government policies and Government expenditures for the
conservation and development of our natural resources, we can be sure of
transmitting to our children and our children's children a country far
richer and more productive than the one we know today.

The value of our natural resources is constantly being increased by the
progress of science. Research is finding new ways of using such natural
assets as minerals, sea water, and plant life. In the peaceful development
of atomic energy, particularly, we stand on the threshold of new wonders.
The first experimental machines for producing useful power from atomic
energy are now under construction. We have made only the first beginnings
in this field, but in the perspective of history they may loom larger than
the first airplane, or even the first tools that started man on the road to
civilization.

To take full advantage of the increasing possibilities of nature we must
equip ourselves with increasing knowledge. Government has a responsibility
to see that our country maintains its position in the advance of science.
As a step toward this end, the Congress should complete action on the
measure to create a National Science Foundation.

Another duty of the Government is to promote the economic security, the
health, and the education of its citizens. By so doing, we strengthen both
our economy and the structure of our society. In a nation as rich as ours,
all citizens should be able to live in decency and health.

Our Social Security System should be developed into the main reliance of
our people for basic protection against the economic hazards of old-age,
unemployment, and illness. I earnestly hope that the Congress will complete
action at this session on legislation to increase the benefits and extend
the coverage of old-age and survivors' insurance. The widespread movement
to provide pensions in private industry dramatizes the need for
improvements in the public insurance system.

I also urge that the Congress strengthen our unemployment compensation law
to meet present-day needs more adequately. The economic downturn of the
past year was the first real test that our system of unemployment insurance
has had to meet. That test has proved the wisdom of the system, but it has
also made strikingly apparent the need for improving its operation and
increasing its coverage and its benefits.

In the field of health there are immense opportunities to extend to more of
our people the benefits of the amazing advances in medical science. We have
made a good beginning in expanding our hospitals, but we must also go on to
remedy the shortages of doctors, nurses, and public health services, and to
establish a system of medical insurance which will enable all Americans to
afford good medical care.

We must take immediate steps to strengthen our educational system. In many
parts of our country, young people are being handicapped for life because
of a poor education. The rapidly increasing number of children of school
age, coupled with the shortage of qualified teachers, makes this problem
more critical each year. I believe that the Congress should no longer delay
in providing Federal assistance to the States so that they can maintain
adequate schools.

As we go forward in achieving greater economic security and greater
opportunity for all our people, we should make every effort to extend the
benefits of our democratic institutions to every citizen. The religious
ideals which we profess, and the heritage of freedom which we have received
from the past, clearly place that duty upon us. I again urge the Congress
to enact the civil rights proposals I made in February 1948. These
proposals are for the enactment of Federal statutes which will protect all
our people in the exercise of their democratic rights and their search for
economic opportunity, grant statehood to Alaska and Hawaii, provide a
greater measure of self-government for our island possessions, and accord
home rule to the District of Columbia. Some of those proposals have been
before the Congress for a long time. Those who oppose them, as well as
those who favor them, should recognize that it is the duty of the elected
representatives of the people to let these proposals come to a vote.

Our democratic ideals, as well as our best interests, require that we do
our fair share in providing homes for the unfortunate victims of war and
tyranny. In so doing, we shall add strength to our democracy through the
abilities and skills which these men and women will bring here. I urge the
prompt enactment by the Congress of the legislation now before it to extend
and broaden the existing displaced persons law and remove its
discriminatory features.

The measures I am recommending to the Congress concerning both our foreign
and our domestic policies represent a carefully considered program to meet
our national needs. It is a program which necessarily requires large
expenditures of funds. More than 70 percent of the Government's
expenditures are required to meet the costs of past wars and to work for
world peace. This is the dominant factor in our fiscal policy. At the same
time, the Government must make substantial expenditures which are necessary
to the growth and expansion of the domestic economy.

At present, largely because of the ill-considered tax reduction of the Both
Congress, the Government is not receiving enough revenue to meet its
necessary expenditures.

To meet this situation, I am proposing that Federal expenditures be held to
the lowest levels consistent with our international requirements and the
essential needs of economic growth, and the well-being of our people. I
think I had better read that over; you interrupted me in the middle.

To meet this situation, I am proposing that Federal expenditures be held to
the lowest levels consistent with our international requirements and the
essential needs of economic growth, and the well-being of our people. Don't
forget that last phrase. At the same time, we must guard against the folly
of attempting budget slashes which would impair our prospects for peace or
cripple the programs essential to our national strength.

The budget recommendations I shall shortly transmit to the Congress show
that we can expect a substantial improvement in our fiscal position over
the next few years, as the cost of some of our extraordinary postwar
programs declines, and as the Government revenue rises as a result of
growth in employment and national income. To further improve our fiscal
outlook, we should make some changes in our tax system which will reduce
present inequities, stimulate business activity, and yield a moderate
amount of additional revenue. I expect to transmit specific recommendations
to the Congress on this subject at a very early date.

The fiscal policy I am recommending is the quickest and safest way of
achieving a balanced budget.

As we move forward into the second half of the 20th century, we must always
bear in mind the central purpose of our national life. We do not seek
material prosperity for ourselves because we love luxury; we do not aid
other nations because we wish to increase our power. We have not devised
programs for the security and well-being of our people because we are
afraid or unwilling to take risks. This is not the meaning of our past
history or our present course.

We work for a better life for all, so that all men may put to good use the
great gifts with which they have been endowed by their Creator. We seek to
establish those material conditions of life in which, without exception,
men may live in dignity, perform useful work, serve their communities, and
worship God as they see fit.

These may seem simple goals, but they are not little ones. They are worth a
great deal more than all the empires and conquests of history. They are not
to be achieved by military aggression or political fanaticism. They are to
be achieved by humbler means-by hard work, by a spirit of self-restraint in
our dealings with one another, and by a deep devotion to the principles of
justice and equality.

It should make us truly thankful, as we look back to the beginnings of this
country, that we have come so far along the road to a better life for all.
It should make us humble to think, as we look ahead, how much farther we
have to go to accomplish, at home and abroad, the objectives that were set
out for us at the founding of this great Nation.

As we approach the halfway mark of the 20th century, we should ask for
continued strength and guidance from that Almighty Power who has placed
before us such great opportunities for the good of mankind in the years to
come.