To the Congress of the United States:

The opening of this new year must arouse in us all grateful thanks to a
kind Providence whose protection has been ever present and whose bounty has
been manifold and abundant. The State of the Union today demonstrates what
can be accomplished under God by a free people; by their vision, their
understanding of national problems, their initiative, their self-reliance,
their capacity for work--and by their willingness to sacrifice whenever
sacrifice is needed.

In the past three years, responding to what our people want their
Government to do, the Congress and the Executive have done much in building
a stronger, better America. There has been broad progress in fostering the
energies of our people, in providing greater opportunity for the
satisfaction of their needs, and in fulfilling their demands for the
strength and security of the Republic.

Our country is at peace. Our security posture commands respect. A spiritual
vigor marks our national life. Our economy, approaching the 400 billion
dollar mark, is at an unparalleled level of prosperity. The national income
is more widely and fairly distributed than ever before. The number of
Americans at work has reached an all-time high. As a people, we are
achieving ever higher standards of living--earning more, producing more,
consuming more, building more and investing more than ever before.

Virtually all sectors of our society are sharing in these good times. Our
farm families, if we act wisely, imaginatively and promptly to strengthen
our present farm programs, can also look forward to sharing equitably in
the prosperity they have helped to create.

War in Korea ended two and a half years ago. The collective security system
has been powerfully strengthened. Our defenses have been reinforced at
sharply reduced costs. Programs to expand world trade and to harness the
atom for the betterment of mankind have been carried forward. Our economy
has been freed from governmental wage and price controls. Inflation has
been halted; the cost of living stabilized.

Government spending has been cut by more than ten billion dollars. Nearly
three hundred thousand positions have been eliminated from the Federal
payroll. Taxes have been substantially reduced. A balanced budget is in
prospect. Social security has been extended to ten million more Americans
and unemployment insurance to four million more. Unprecedented advances in
civil rights have been made. The long-standing and deep-seated problems of
agriculture have been forthrightly attacked.

This record of progress has been accomplished with a self imposed caution
against unnecessary and unwise interference in the private affairs of our
people, of their communities and of the several States.

If we of the Executive and Legislative Branches, keeping this caution ever
in mind, address ourselves to the business of the year before us--and to
the unfinished business of last year--with resolution, the outlook is
bright with promise.

Many measures of great national importance recommended last year to the
Congress still demand immediate attention legislation for school and
highway construction; health and immigration legislation; water resources
legislation; legislation to complete the implementation of our foreign
economic policy; such labor legislation as amendments of the
Labor-Management Relations Act, extension of the Fair Labor Standards Act
to additional groups not now covered, and occupational safety legislation;
and legislation for construction of an atomic-powered exhibit vessel.

Many new items of business likewise require our attention-measures that
will further promote the release of the energies of our people; that will
broaden opportunity for all of them; that will advance the Republic in its
leadership toward a just peace; measures, in short, that are essential to
the building of an everstronger, ever-better America.

Every political and economic guide supports a valid confidence that wise
effort will be rewarded by an even more plentiful harvest of human benefit
than we now enjoy. Our resources are too many, our principles too dynamic,
our purposes too worthy and the issues at stake too immense for us to
entertain doubt or fear. But our responsibilities require that we approach
this year's business with a sober humility.

A heedless pride in our present strength and position would blind us to the
facts of the past, to the pitfalls of the future. We must walk ever in the
knowledge that we are enriched by a heritage earned in the labor and
sacrifice of our forebears; that, for our children's children, we are
trustees of a great Republic and a time-tested political system; that we
prosper as a cooperating member of the family of nations.

In this light the Administration has continued work on its program for the
Republic, begun three years ago. Because the vast spread of national and
human interests is involved within it, I shall not in this Message attempt
its detailed delineation. Instead, from time to time during this Session,
there will be submitted to the Congress specific recommendations within
specific fields. In the comprehensive survey required for their
preparation, the Administration is guided by enduring objectives. The first
is:

THE DISCHARGE OF OUR WORLD RESPONSIBILITY

Our world policy and our actions are dedicated to the achievement of peace
with justice for all nations.

With this purpose, we move in a wide variety of ways and through many
agencies to remove the pall of fear; to strengthen the ties with our
partners and to improve the cooperative cohesion of the free world; to
reduce the burden of armaments, and to stimulate and inspire action among
all nations for a world of justice and prosperity and peace. These national
objectives are fully supported by both our political parties.

In the past year, our search for a more stable and just peace has taken
varied forms. Among the most important were the two Conferences at Geneva,
in July and in the fall of last year. We explored the possibilities of
agreement on critical issues that jeopardize the peace.

The July meeting of Heads of Government held out promise to the world of
moderation in the bitterness, of word and action, which tends to generate
conflict and war. All were in agreement that a nuclear war would be an
intolerable disaster which must not be permitted to occur. But in October,
when the Foreign Ministers met again, the results demonstrated conclusively
that the Soviet leaders are not yet willing to create the indispensable
conditions for a secure and lasting peace.

Nevertheless, it is clear that the conflict between international communism
and freedom has taken on a new complexion.

We know the Communist leaders have often practiced the tactics of retreat
and zigzag. We know that Soviet and Chinese communism still poses a serious
threat to the free world. And in the Middle East recent Soviet moves are
hardly compatible with the reduction of international tension.

Yet Communist tactics against the free nations have shifted in emphasis
from reliance on violence and the threat of violence to reliance on
division, enticement and duplicity. We must be well prepared to meet the
current tactics which pose a dangerous though less obvious threat. At the
same time, our policy must be dynamic as well as flexible, designed
primarily to forward the achievement of our own objectives rather than to
meet each shift and change on the Communist front. We must act in the firm
assurance that the fruits of freedom are more attractive and desirable to
mankind in the pursuit of happiness than the record of Communism.

In the face of Communist military power, we must, of course, continue to
maintain an effective system of collective security. This involves two
things--a system which gives clear warning that armed aggression will be
met by joint action of the free nations, and deterrent military power to
make that warning effective. Moreover, the awesome power of the atom must
be made to serve as a guardian of the free community and of the peace.

In the last year, the free world has seen major gains for the system of
collective security: the accession to the North Atlantic Treaty
Organization and Western European Union of the sovereign Federal German
Republic; the developing cooperation under the Southeast Asia Collective
Defense Treaty; and the formation in the Middle East of the Baghdad Pact
among Turkey, Iraq, Iran, Pakistan and the United Kingdom. In our own
hemisphere, the inter-American system has continued to show its vitality in
maintaining peace and a common approach to world problems. We now have
security pacts with more than 40 other nations.

In the pursuit of our national purposes, we have been steadfast in our
support of the United Nations, now entering its second decade with a wider
membership and ever-increasing influence and usefulness. In the release of
our fifteen fliers from Communist China, an essential prelude was the world
opinion mobilized by the General Assembly, which condemned their
imprisonment and demanded their liberation. The successful Atomic Energy
Conference held in Geneva under United Nations auspices and our Atoms for
Peace program have been practical steps toward the world-wide use of this
new energy source. Our sponsorship of such use has benefited our relations
with other countries. Active negotiations are now in progress to create an
International Agency to foster peaceful uses of atomic energy.

During the past year the crucial problem of disarmament has moved to the
forefront of practical political endeavor. At Geneva, I declared the
readiness of the United States to exchange blueprints of the military
establishments of our nation and the USSR, to be confirmed by reciprocal
aerial reconnaissance. By this means, I felt mutual suspicions could be
allayed and an atmosphere developed in which negotiations looking toward
limitation of arms would have improved chances of success.

In the United Nations Subcommittee on Disarmament last fall, this proposal
was explored and the United States also declared itself willing to include
reciprocal ground inspection of key points. By the overwhelming vote of 56
to 7, the United Nations on December 16 endorsed these proposals and gave
them a top priority. Thereby, the issue is placed squarely before the bar
of world opinion. We shall persevere in seeking a general reduction of
armaments under effective inspection and control which are essential
safeguards to ensure reciprocity and protect the security of all.

In the coming year much remains to be done.

While maintaining our military deterrent, we must intensify our efforts to
achieve a just peace. In Asia we shall continue to give help to nations
struggling to maintain their freedom against the threat of Communist
coercion or subversion. In Europe we shall endeavor to increase not only
the military strength of the North Atlantic Alliance but also its political
cohesion and unity of purpose. We shall give such assistance as is feasible
to the recently renewed effort of Western European nations to achieve a
greater measure of integration, such as in the field of peaceful uses of
atomic energy.

In the Near East we shall spare no effort in seeking to promote a fair
solution of the tragic dispute between the Arab States and Israel, all of
whom we want as our friends. The United States is ready to do its part to
assure enduring peace in that area. We hope that both sides will make the
contributions necessary to achieve that purpose. In Latin America, we shall
continue to cooperate vigorously in trade and other measures designed to
assist economic progress in the area.

Strong economic ties are an essential element in our free world
partnership. Increasing trade and investment help all of us prosper
together. Gratifying progress has been made in this direction, most
recently by the three-year extension of our trade agreements legislation.

I most earnestly request that the Congress approve our membership in the
Organization for Trade Cooperation, which would assist the carrying out of
the General Agreement on Tariffs and Trade to which we have been a party
since 1948. Our membership in the OTC will provide the most effective and
expeditious means for removing discriminations and restrictions against
American exports and in making our trade agreements truly reciprocal.
United States membership in the Organization will evidence our continuing
desire to cooperate in promoting an expanded trade among the free nations.
Thus the Organization, as proposed, is admirably suited to our own
interests and to those of like-minded nations in working for steady
expansion of trade and closer economic cooperation. Being strictly an
administrative entity, the Organization for Trade Cooperation cannot, of
course, alter the control by Congress of the tariff, import, and customs
policies of the United States.

We need to encourage investment overseas by avoiding unfair tax
duplications, and to foster foreign trade by further simplification and
improvement of our customs legislation.

We must sustain and fortify our Mutual Security Program. Because the
conditions of poverty and unrest in less developed areas make their people
a special target of international communism, there is a need to help them
achieve the economic growth and stability necessary to preserve their
independence against communist threats and enticements.

In order that our friends may better achieve the greater strength that is
our common goal, they need assurance of continuity in economic assistance
for development projects and programs which we approve and which require a
period of years for planning and completion. Accordingly, I ask Congress to
grant limited authority to make longer-term commitments for assistance to
such projects, to be fulfilled from appropriations to be made in future
fiscal years.

These various steps will powerfully strengthen the economic foundation of
our foreign policy. Together with constructive action abroad, they will
maintain the present momentum toward general economic progress and vitality
of the free world.

In all things, change is the inexorable law of life. In much of the world
the ferment of change is working strongly; but grave injustices are still
uncorrected. We must not, by any sanction of ours, help to perpetuate these
wrongs. I have particularly in mind the oppressive division of the German
people, the bondage of millions elsewhere, and the exclusion of Japan from
United Nations membership.

We shall keep these injustices in the forefront of human consciousness and
seek to maintain the pressure of world opinion to fight these vast wrongs
in the interest both of justice and secure peace.

Injustice thrives on ignorance. Because an understanding of the truth about
America is one of our most powerful forces, I am recommending a substantial
increase in budgetary support of the United States Information Agency.

The sum of our international effort should be this: the waging of peace,
with as much resourcefulness, with as great a sense of dedication and
urgency, as we have ever mustered in defense of our country in time of war.
In this effort, our weapon is not force. Our weapons are the principles and
ideas embodied in our historic traditions, applied with the same vigor that
in the past made America a living promise of freedom for all mankind.

To accomplish these vital tasks, all of us should be concerned with the
strength, effectiveness and morale .of our State Department and our Foreign
Service.

Another guide in the preparation of the Administration's program is:

THE CONSTANT IMPROVEMENT OF OUR NATIONAL SECURITY

Because peace is the keystone of our national policy, our defense program
emphasizes an effective flexible type of power calculated to deter or
repulse any aggression and to preserve the peace. Short of war, we have
never had military strength better adapted to our needs with improved
readiness for emergency use. The maintenance of this strong military
capability for the indefinite future will continue to call for a large
share of our national budget. Our military programs must meet the needs of
today. To build less would expose the nation to aggression. To build
excessively, under the influence of fear, could defeat our purposes and
impair or destroy the very freedom and economic system our military
defenses are designed to protect.

We have improved the effectiveness and combat readiness of our forces by
developing and making operational new weapons and by integrating the latest
scientific developments, including new atomic weapons, into our military
plans. We continue to push the production of the most modern military
aircraft. The development of long-range missiles has been on an accelerated
basis for some time. We are moving as rapidly as practicable toward
nuclear-powered aircraft and ships. Combat capability, especially in terms
of firepower, has been substantially increased. We have made the
adjustments in personnel permitted by the cessation of the Korean War, the
buildup of our allies and the introduction of new weapons. The services are
all planning realistically on a long-term basis.

To strengthen our continental defenses the United States and Canada, in the
closest cooperation, have substantially augmented early warning networks.
Great progress is being made in extending surveillance of the Arctic, the
Atlantic and the Pacific approaches to North America.

In the last analysis our real strength lies in the caliber of the men and
women in our Armed Forces, active and Reserve. Much has been done to
attract and hold capable military personnel, but more needs to be done.
This year, I renew my request of last year for legislation to provide
proper medical care for military dependents and a more equitable survivors'
benefit program. The Administration will prepare additional recommendations
designed to achieve the same objectives, including career incentives for
medical and dental officers and nurses, and increases in the proportion of
regular officers.

Closely related to the mission of the Defense Department is the task of the
Federal Civil Defense Administration. A particular point of relationship
arises from the fact that the key to civil defense is the expanded
continental defense program, including the distant early warning system.
Our Federal civil defense authorities have made progress in their program,
and now comprehensive studies are being conducted jointly by the Federal
Civil Defense Administration, the States, and critical target cities to
determine the best procedures that can be adopted in case of an atomic
attack. We must strengthen Federal assistance to the States and cities in
devising the most effective common defense.

We have a broad and diversified mobilization base. We have the facilities,
materials, skills and knowledge rapidly to expand the production of things
we need for our defense whenever they are required. But mobilization base
requirements change with changing technology and strategy. We must maintain
flexibility to meet new requirements. I am requesting, therefore, that the
Congress once again extend the Defense Production Act.

Of great importance to our nation's security is a continuing alertness to
internal subversive activity within or without our government. This
Administration will not relax its efforts to deal forthrightly and
vigorously in protection of this government and its citizens against
subversion, at the same time fully protecting the constitutional rights of
all citizens.

A third objective of the Administration is:

FISCAL INTEGRITY

A public office is, indeed, a public trust. None of its aspects is more
demanding than the proper management of the public finances. I refer now
not only to the indispensable virtues of plain honesty and trustworthiness
but also to the prudent, effective and conscientious use of tax money. I
refer also to the attitude of mind that makes efficient and economical
service to the people a watchword in our government.

Over the long term, a balanced budget is a sure index to thrifty
management--in a home, in a business or in the Federal Government. When
achievement of a balanced budget is for long put off in a business or home,
bankruptcy is the result. But in similar circumstances a government resorts
to inflation of the money supply. This inevitably results in depreciation
of the value of the money, and an increase in the cost of living. Every
investment in personal security is threatened by this process of inflation,
and the real values of the people's savings, whether in the form of
insurance, bonds, pension and retirement funds or savings accounts are
thereby shriveled.

We have made long strides these past three years in bringing our Federal
finances under control. The deficit for fiscal year 1953 was almost 9-1/2
billion dollars. Larger deficits seemed certain--deficits which would have
depreciated the value of the dollar and pushed the cost of living still
higher. But government waste and extravagance were searched out.
Nonessential activities were dropped. Government expenses were carefully
scrutinized. Total spending was cut by 14 billion dollars below the amount
planned by the previous Administration for the fiscal year 1954.

This made possible--and it was appropriate in the existing circumstances of
transition to a peacetime economy--the largest tax cut in any year in our
history. Almost 7-1/2 billion dollars were released and every taxpayer in
the country benefited. Almost two-thirds of the savings went directly to
individuals. This tax cut also helped to build up the economy, to make jobs
in industry and to increase the production .of the many things desired to
improve the scale of living for the great majority of Americans.

The strong expansion of the economy, coupled with a constant care for
efficiency in government operations and an alert guard against waste and
duplication, has brought us to a prospective balance between income and
expenditure. This is being done while we continue to strengthen our
military security.

I expect the budget to be in balance during the fiscal year ending June 30,
1956.

I shall propose a balanced budget for the next fiscal year ending June 30,
1957.

But the balance we are seeking cannot be accomplished without the
continuing every-day effort of the Executive and Legislative Branches to
keep expenditures under control. It will also be necessary to continue all
of the present excise taxes without any reduction and the corporation
income taxes at their present rates for another year beyond next April
1st.

It is unquestionably true that our present tax level is very burdensome
and, in the interest of long term and continuous economic growth, should be
reduced when we prudently can. It is essential, in the sound management of
the Government's finances, that we be mindful of our enormous national debt
and of the obligation we have toward future Americans to reduce that debt
whenever we can appropriately do so. Under conditions of high peacetime
prosperity, such as now exist, we can never justify going further into debt
to give ourselves a tax cut at the expense of our children. So, in the
present state of our financial affairs, I earnestly believe that a tax cut
can be deemed justifiable only when it will not unbalance the budget, a
budget which makes provision for some reduction, even though modest, in our
national debt. In this way we can best maintain fiscal integrity.

A fourth aim of our program is:

TO FOSTER A STRONG ECONOMY

Our competitive enterprise system depends on the energy of free human
beings, limited by prudent restraints in law, using free markets to plan,
organize and distribute production, and spurred by the prospect of reward
for successful effort. This system has developed our resources. It has
marvelously expanded our productive capacity. Against the record of all
other economic systems devised through the ages, this competitive system
has proved the most creative user of human skills in the development of
physical resources, and the richest rewarder of human effort.

This is still true in this era when improved living standards and rising
national requirements are accompanied by swift advances in technology and
rapid obsolescence in machines and methods. Typical of these are the
strides made in construction of plants to produce electrical energy from
atomic power and of laboratories and installations for the application of
this new force in industry, agriculture and the healing arts. These
developments make it imperative--to assure effective functioning of our
enterprise system--that the Federal Government concern itself with certain
broad areas of our economic life. Most important of these is:

Agriculture

Our farm people are not sharing as they should in the general prosperity.
They alone of all major groups have seen their incomes decline rather than
rise. They are caught between two millstones--rising production costs and
declining prices. Such harm to a part of the national economy so vitally
important to everyone is of great concern to us all. No other resource is
so indispensable as the land that feeds and clothes us. No group is more
fundamental to our national life than our farmers.

In successful prosecution of the war, the nation called for the utmost
effort of its farmers. Their response was superb, their contribution
unsurpassed. Farmers are not now to be blamed for the mountainous,
price-depressing surpluses produced in response to wartime policies and
laws that were too long continued. War markets are not the markets of
peacetime. Failure to recognize that basic fact by a timely adjustment of
wartime legislation brought its inevitable result in peacetime--surpluses,
lower prices and lower incomes for our farmers.

The dimensions of government responsibility are as broad and complex as the
farm problem itself. We are here concerned not only with our essential
continuing supplies of food and fiber, but also with a way of life. Both
are indispensable to the well-being and strength of the nation.
Consideration of these matters must be above and beyond politics. Our
national farm policy, so vital to the welfare of farm people and all of us,
must not become a field for political warfare. Too much is at stake.

Our farm people expect of us, who have responsibility for their government,
understanding of their problems and the will to help solve them. Our
objective must be to help bring production into balance with existing and
new markets, at prices that yield farmers a return for their work in line
with what other Americans get.

To reach this goal, deep-seated problems must be subjected to a stepped-up
attack. There is no single easy solution. Rather, there must be a
many-sided assault on the stubborn problems of surpluses, prices, costs,
and markets; and a steady, persistent, imaginative advance in the
relationship between farmers and their government.

In a few days, by special message, I shall lay before the Congress my
detailed recommendations for new steps that should be taken promptly to
speed the transition in agriculture and thus assist our farmers to achieve
their fair share of the national income.

Basic to this program will be a new attack on the surplus problem-for even
the best-conceived farm program cannot work under a multi-billion dollar
weight of accumulated stocks.

I shall urge authorization of a soil bank program to alleviate the problem
of diverted acres and an overexpanded agricultural plant. This will include
an acreage reserve to reduce current and accumulated surpluses of crops in
most serious difficulty, and a conservation reserve to achieve other needed
adjustments in the use of agricultural resources. I shall urge measures to
strengthen our surplus disposal activities.

I shall propose measures to strengthen individual commodity programs, to
remove controls where possible, to reduce carryovers, and to stop further
accumulations of surpluses. I shall ask the Congress to provide substantial
new funds for an expanded drive on the research front, to develop new
markets, new crops, and new uses. The Rural Development Program to better
the lot of low-income farm families deserves full Congressional support.
The Great Plains Program must go forward vigorously. Advances on these and
other fronts will pull down the pricedepressing surpluses and raise farm
income.

In this time of testing in agriculture, we should all together, regardless
of party, carry forward resolutely with a sound and forward looking program
on which farm people may confidently depend, now and for years to come.

I shall briefly mention four other subjects directly related to the
well-being of the economy, preliminary to their fuller discussion in the
Economic Report and later communications.

Resources Conservation

I wish to re-emphasize the critical importance of the wise use and
conservation of our great natural resources of land, forests, minerals and
water and their long-range development consistent with our agricultural
policy. Water in particular now plays an increasing role in industrial
processes, in the irrigation of land, in electric power, as well as in
domestic uses. At the same time, it has the potential of damage and
disaster.

A comprehensive legislative program for water conservation will be
submitted to the Congress during the Session. The development of our water
resources cannot be accomplished overnight. The need is such that we must
make faster progress and without delay. Therefore, I strongly recommend
that action be taken at this Session on such wholly Federal projects as the
Colorado River Storage Project and the Fryingpan-Arkansas Project; on the
John Day partnership project, and other projects which provide for
cooperative action between the Federal Government and non-Federal
interests; and on legislation, which makes provision for Federal
participation in small projects under the primary sponsorship of agencies
of State and local government.

During the past year the areas of our National Parks have been expanded,
and new wildlife refuges have been created. The visits of our people to the
Parks have increased much more rapidly than have the facilities to care for
them. The Administration will submit recommendations to provide more
adequate facilities to keep abreast of the increasing interest of our
people in the great outdoors.

Disaster Assistance

A modern community is a complex combination of skills, specialized
buildings, machines, communications and homes. Most importantly, it
involves human lives. Disaster in many forms--by flood, frost, high winds,
for instance--can destroy on a massive scale in a few hours the labor of
many years.

Through the past three years the Administration has repeatedly moved into
action wherever disaster struck. The extent of State participation in
relief activities, however, has been far from uniform and, in many cases,
has been either inadequate or nonexistent. Disaster assistance legislation
requires overhauling and an experimental program of flood-damage
indemnities should be undertaken. The Administration will make detailed
recommendations on these subjects.

Area Redevelopment

We must help deal with the pockets of chronic unemployment that here and
there mar the nation's general industrial prosperity. Economic changes in
recent years have been often so rapid and far-reaching that areas committed
to a single local resource or industrial activity have found themselves
temporarily deprived of their markets and their livelihood.

Such conditions mean severe hardship for thousands of people as the slow
process of adaptation to new circumstances goes on. This process can be
speeded up. Last year I authorized a major study of the problem to find
additional steps to supplement existing programs for the redevelopment of
areas of chronic unemployment. Recommendations will be submitted, designed
to supplement, with Federal technical and loan assistance local efforts to
get on with this vital job. Improving such communities must, of course,
remain the primary responsibility of the people living there and of their
States. But a soundly conceived Federal partnership program can be of real
assistance to them in their efforts.

Highway Legislation.

Legislation to provide a modern, interstate highway system is even more
urgent this year than last, for 12 months have now passed in which we have
fallen further behind in road construction needed for the personal safety,
the general prosperity, the national security of the American people.
During the year, the number of motor vehicles has increased from 58 to 61
million. During the past year over 38,000 persons lost their lives in
highway accidents, while the fearful toll of injuries and property damage
has gone on unabated.

In my message of February 22, 1955, I urged that measures be taken to
complete the vital 40,000 mile interstate system over a period of 10 years
at an estimated Federal cost of approximately 25 billion dollars. No
program was adopted.

If we are ever to solve our mounting traffic problem, the whole interstate
system must be authorized as one project, to be completed approximately
within the specified time. Only in this way can industry efficiently gear
itself to the job ahead. Only in this way can the required planning and
engineering be accomplished without the confusion and waste unavoidable a
piecemeal approach. Furthermore, as I pointed out last year, the pressing
nature of this problem must not lead us to solutions outside the bounds of
sound fiscal management. As in the case of other pressing problems, there
must be an adequate plan of financing. To continue the drastically needed
improvement in other national highway systems, I recommend the continuation
of the Federal Aid Highway Program.

Aside from agriculture and the four subjects specifically mentioned, an
integral part of our efforts to foster a strong and expanding free economy
is keeping open the door of opportunity to new and small enterprises,
checking monopoly, and preserving a competitive environment. In this past
year the steady improvement in the economic health of small business has
reinforced the vitality of our competitive economy. We shall continue to
help small business concerns to obtain access to adequate financing and to
competent counsel on management, production, and marketing problems.

Through measures already taken, opportunities for smallbusiness
participation in government procurement programs, including military
procurement, are greatly improved. The effectiveness of these measures will
become increasingly apparent. We shall continue to make certain that small
business has a fair opportunity to compete and has an economic environment
in which it may prosper.

In my message last year I referred to the appointment of an advisory
committee to appraise and report to me on the deficiencies as well as the
effectiveness of existing Federal transportation policies. I have commended
the fundamental purposes and objectives of the committee's report. I
earnestly recommend that the Congress give prompt attention to the
committee's proposals.

Essential to a prosperous economic environment for all business, small and
large--for agriculture and industry and commerce-is efficiency in
Government. To that end, exhaustive studies of the entire governmental
structure were made by the Commission on Intergovernmental Relations and
the Commission on the Organization of the Executive Branch of the
Government--the reports of these Commissions are now under intensive review
and already in the process of implementation in important areas.

One specific and most vital governmental function merits study and action
by the Congress. As part of our program of promoting efficiency in
Government and getting the fiscal situation in hand, the Post Office
Department in the past three years has been overhauled. Nearly one thousand
new post offices have been provided. Financial practices have been
modernized, and transportation and operating methods are being constantly
improved. A new wage and incentive plan for the half million postal
employees has been established. Never before has the postal system handled
so much mail so quickly and so economically.

The Post Office Department faces two serious problems. First, much of its
physical plant--post offices and other buildings-is obsolete and
inadequate. Many new buildings and the modernization of present ones are
essential if we are to have improved mail service. The second problem is
the Department's fiscal plight. It now faces an annual deficit of one-half
billion dollars.

Recommendations on postal facilities and on additional postal revenues will
be submitted to the Congress.

A final consideration in our program planning is:

THE RESPONSE TO HUMAN CONCERNS

A fundamental belief shines forth in this Republic. We believe in the worth
and dignity of the individual. We know that if we are to govern ourselves
wisely--in the tradition of America--we must have the opportunity to
develop our individual capacities to the utmost.

To fulfill the individual's aspirations in the American way of life, good
education is fundamental. Good education is the outgrowth of good homes,
good communities, good churches, and good schools. Today our schools face
pressing problems--problems which will not yield to swift and easy
solutions, or to any single action. They will yield only to a continuing,
active, formed effort by the people toward achieving better schools.

This kind of effort has been spurred by the thousands of conferences held
in recent months by half a million citizens and educators in all parts of
the country, culminating in the White House Conference on Education. In
that Conference, some two thousand delegates, broadly representative of the
nation, studied together the problems of the nation's schools.

They concluded that the people of the United States must make a greater
effort through their local, State, and Federal Governments to improve the
education of our youth. This expression from the people must now be
translated into action at all levels of government.

So far as the Federal share of responsibility is concerned, I urge that the
Congress move promptly to enact an effective program of Federal assistance
to help erase the existing deficit of school classrooms. Such a program,
which should be limited to a five-year period, must operate to increase
rather than decrease local and State support of schools and to give the
greatest help to the States and localities with the least financial
resources. Federal aid should in no way jeopardize the freedom of local
school systems. There will be presented to the Congress a recommended
program of Federal assistance for school construction.

Such a program should be accompanied by action to increase services to the
nation's schools by the Office of Education and by legislation to provide
continuation of payments to school districts where Federal activities have
impaired the ability of those districts to provide adequate schools.

Under the 1954 Amendments to the old-age and survivors' insurance program,
protection was extended to some 10 million additional workers and benefits
were increased. The system now helps protect 9 out of 10 American workers
and their families against loss of income in old age or on the death of the
breadwinner. The system is sound. It must be kept so. In developing
improvements in the system, we must give the most careful consideration to
population and social trends, and to fiscal requirements. With these
considerations in mind, the Administration will present its recommendations
for further expansion of coverage and other steps which can be taken wisely
at this time.

Other needs in the area of social welfare include increased child welfare
services, extension of the program of aid to dependent children,
intensified attack on juvenile delinquency, and special attention to the
problems of mentally retarded children. The training of more skilled
workers for these fields and the quest for new knowledge through research
in social welfare are essential. Similarly the problems of our aged people
need our attention.

The nation has made dramatic progress in conquering disease--progress of
profound human significance which can be greatly accelerated by an
intensified effort in medical research. A well-supported, well-balanced
program of research, including basic research, can open new frontiers of
knowledge, prevent and relieve suffering, and prolong life. Accordingly I
shall recommend a substantial increase in Federal funds for the support of
such a program. As an integral part of this effort, I shall recommend a new
plan to aid construction of non-Federal medical research and teaching
facilities and to help provide more adequate support for the training of
medical research manpower.

Finally, we must aid in cushioning the heavy and rising costs of illness
and hospitalization to individuals and families. Provision should be made,
by Federal reinsurance or otherwise, to foster extension of voluntary
health insurance coverage to many more persons, especially older persons
and those in rural areas. Plans should be evolved to improve protection
against the costs of prolonged or severe illness. These measures will help
reduce the dollar barrier between many Americans and the benefits of modern
medical care.

The Administration health program will be submitted to the Congress in
detail.

The response of government to human concerns embraces, of course, other
measures of broad public interest, and of special interest to our working
men and women. The need still exists for improvement of the Labor
Management Relations Act. The recommendations I submitted to the Congress
last year take into account not only the interests of labor and management
but also the public welfare. The needed amendments should be enacted
without further delay.

We must also carry forward the job of improving the wagehour law. Last year
I requested the Congress to broaden the coverage of the minimum wage. I
repeat that recommendation, and I pledge the full resources of the
Executive Branch to assist the Congress in finding ways to attain this
goal. Moreover, as requested last year, legislation should be passed to
clarify and strengthen the eight-hour laws for the benefit of workers who
are subject to Federal wage standards on Federal and Federally assisted
construction and other public works.

The Administration will shortly propose legislation to assure adequate
disclosure of the financial affairs of each employee pension and welfare
plan and to afford substantial protection to their beneficiaries in
accordance with the objectives outlined in my message of January 11, 1954.
Occupational safety still demands attention, as I pointed out last year,
and legislation to improve the Longshoremen's and Harbor Workers'
Compensation Act is still needed. The improvement of the District of
Columbia Unemployment Insurance Law and legislation to provide employees in
the District with non-occupational disability insurance are no less
necessary now than 12 months ago. Legislation to apply the principle of
equal pay for equal work without discrimination because of sex is a matter
of simple justice. I earnestly urge the Congress to move swiftly to
implement these needed labor measures.

In the field of human needs, we must carry forward the housing program,
which is contributing so greatly to the well-being of our people and the
prosperity of our economy. Home ownership is now advanced to the point
where almost three of every five families in our cities, towns, and suburbs
own the houses they live in.

For the housing program, most of the legislative authority already exists.
However, a firm program of public housing is essential until the private
building industry has found ways to provide more adequate housing for
low-income families. The Administration will propose authority to contract
for 35 thousand additional public housing units in each of the next 2
fiscal years for communities which will participate in an integrated attack
on slums and blight.

To meet the needs of the growing number of older people, several amendments
to the National Housing Act will be proposed to assist the private
homebuilding industry as well as charitable and non-profit organizations.

With so large a number of the American people desiring to modernize and
improve existing dwellings, I recommend that the Title 1 program for
permanent improvements in the home be liberalized.

I recommend increases in the general FHA mortgage insurance authority; the
extension of the FHA military housing program; an increase in the
authorization for Urban Planning grants; in the special assistance
authority of the Federal National Mortgage Association; and continued
support of the college housing program in a way that will not discourage
private capital from helping to meet the needs of our colleges.

The legislation I have recommended for workers in private industry should
be accompanied by a parallel effort for the welfare of Government
employees. We have accomplished much in this field, including a
contributory life insurance program; equitable pay increases and a fringe
benefits program, covering many needed personnel policy changes, from
improved premium pay to a meaningful incentive award program.

Additional personnel management legislation is needed in this Session. As I
stated last year, an executive pay increase is essential to efficient
governmental management. Such an increase, together with needed adjustments
in the pay for the top career positions, is also necessary to the equitable
completion of the Federal pay program initiated last year. Other
legislation will be proposed, including legislation for prepaid group
health insurance for employees and their dependents and to effect major
improvements in the Civil Service retirement system.

All of us share a continuing concern for those who have served this nation
in the Armed Forces. The Commission on Veterans Pensions is at this time
conducting a study of the entire field of veterans' benefits and will soon
submit proposed improvements.

We are proud of the progress our people have made in the field of civil
rights. In Executive Branch operations throughout the nation, elimination
of discrimination and segregation is all but completed. Progress is also
being made among contractors engaged in furnishing Government services and
requirements. Every citizen now has the opportunity to fit himself for and
to hold a position of responsibility in the service of his country. In the
District of Columbia, through the voluntary cooperation of the people,
discrimination and segregation are disappearing from hotels, theaters,
restaurants and other facilities.

It is disturbing that in some localities allegations persist that Negro
citizens are being deprived of their right to vote and are likewise being
subjected to unwarranted economic pressures. I recommend that the substance
of these charges be thoroughly examined by a Bipartisan Commission created
by the Congress. It is hoped that such a commission will be established
promptly so that it may arrive at findings which can receive early
consideration.

The stature of our leadership in the free world has increased through the
past three years because we have made more progress than ever before in a
similar period to assure our citizens equality in justice, in opportunity
and in civil rights. We must expand this effort on every front. We must
strive to have every person judged and measured by what he is, rather than
by his color, race or religion. There will soon be recommended to the
Congress a program further to advance the efforts of the Government, within
the area of Federal responsibility, to accomplish these objectives.

One particular challenge confronts us. In the Hawaiian Islands, East meets
West. To the Islands, Asia and Europe and the Western Hemisphere, all the
continents, have contributed their peoples and their cultures to display a
unique example of a community that is a successful laboratory in human
brotherhood.

Statehood, supported by the repeatedly expressed desire of the Islands'
people and by our traditions, would be a shining example of the American
way to the entire earth. Consequently, I urgently request this Congress to
grant statehood for Hawaii. Also, in harmony with the provisions I last
year communicated to the Senate and House Committees on Interior and
Insular Affairs, I trust that progress toward statehood for Alaska can be
made in this Session.

Progress is constant toward full integration of our Indian citizens into
normal community life. During the past two years the Administration has
provided school facilities for thousands of Indian children previously
denied this opportunity. We must continue to meet the needs of increased
numbers of Indian children. Provision should also be made for the education
of adult Indians whose schooling in earlier years was neglected.

In keeping with our responsibility of world leadership and in our own self
interest, I again point out to the Congress the urgent need for revision of
the immigration and nationality laws. Our nation has always welcomed
immigrants to our shores. The wisdom of such a policy is clearly shown by
the fact that America has been built by immigrants and the descendants of
immigrants. That policy must be continued realistically with present day
conditions in mind.

I recommend that the number of persons admitted to this country annually be
based not on the 1920 census but on the latest, the 1950 census. Provision
should be made to allow for greater flexibility in the use of quotas so if
one country does not use its share, the vacancies may be made available for
the use of qualified individuals from other countries.

The law should be amended to permit the Secretary of State and the Attorney
General to waive the requirements of fingerprinting on a reciprocal basis
for persons coming to this country for temporary visits. This and other
changes in the law are long overdue and should be taken care of promptly.
Detailed recommendations for revision of the immigration laws will be
submitted to the Congress.

I am happy to report substantial progress in the flow of immigrants under
the Refugee Relief Act of 1953; however, I again request this Congress to
approve without further delay the urgently needed amendments to that act
which I submitted in the last Session. Because of the high prosperity in
Germany and Austria, the number of immigrants from those countries will be
reduced. This will make available thousands of unfilled openings which I
recommend be distributed to Greece and Italy and to escapees from behind
the Iron Curtain.

Once again I ask the Congress to join with me in demonstrating our belief
in the right of suffrage. I renew my request that the principle of
self-government be extended and the right of suffrage granted to the
citizens of the District of Columbia.

To conclude: the vista before us is bright. The march of science, the
expanding economy, the advance in collective security toward a just
peace--in this threefold movement our people are creating new standards by
which the future of the Republic may be judged.

Progress, however, will be realized only as it is more than matched by a
continuing growth in the spiritual strength of the nation. Our dedication
to moral values must be complete in our dealings abroad and in our
relationships among ourselves. We have single-minded devotion to the common
good of America. Never must we forget that this means the well-being, the
prosperity, the security of all Americans in every walk of life.

To the attainment of these objectives, I pledge full energies of the
Administration, as in the Session ahead, it works on a program for
submission to you, the Congress of the United States.