Harry S Truman
State of the Union Address
January 5, 1949
Mr. President, Mr. Speaker, Members of the Congress:
I am happy to report to this 81st Congress that the state of the Union
is good. Our Nation is better able than ever before to meet the needs of
the American people, and to give them their fair chance in the pursuit
of happiness. This great Republic is foremost among the nations of the
world in the search for peace.
During the last 16 years, our people have been creating a society which
offers new opportunities for every man to enjoy his share of the good things
In this society, we are conservative about the values and principles
which we cherish; but we are forward-looking in protecting those values
and principles and in extending their benefits. We have rejected the discredited
theory that the fortunes of the Nation should be in the hands of a privileged
few. We have abandoned the "trickledown" concept of national prosperity.
Instead, we believe that our economic system should rest on a democratic
foundation and that wealth should be created for the benefit of all.
The recent election shows that the people of the United States are in
favor of this kind of society and want to go on improving it.
The American people have decided that poverty is just as wasteful and
just as unnecessary as preventable disease. We have pledged our common
resources to help one another in the hazards and struggles of individual
life. We believe that no unfair prejudice or artificial distinction should
bar any citizen of the United States of America from an education, or from
good health, or from a job that he is capable of performing.
The attainment of this kind of society demands the best efforts of every
citizen in every walk of life, and it imposes increasing responsibilities
on the Government.
The Government must work with industry, labor, and the farmers in keeping
our economy running at full speed. The Government must see that every American
has a chance to obtain his fair share of our increasing abundance. These
responsibilities go hand in hand.
We cannot maintain prosperity unless we have a fair distribution of
opportunity and a widespread consumption of the products of our factories
Our Government has undertaken to meet these responsibilities.
We have ,made tremendous public investments in highways, hydroelectric
power projects, soil conservation, and reclamation. We have established
a system of social security. We have enacted laws protecting the rights
and the welfare of our working people and the income of our farmers. These
Federal policies have paid for themselves many times over. They have strengthened
the material foundations of our democratic ideals. Without them, our present
prosperity would be impossible.
Reinforced by these policies, our private enterprise system has reached
new heights of production. Since the boom year of 1929, while our population
has increased by only 20 percent, our agricultural production has increased
by 45 percent, and our industrial production has increased by 75 percent.
We are turning out far more goods and more wealth per worker than we have
ever done before.
This progress has confounded the gloomy prophets--at home and abroad
who predicted the downfall of American capitalism. The people of the United
States, going their own way, confident in their own powers, have achieved
the greatest prosperity the world has even seen.
But, great as our progress has been, we still have a long way to go.
As we look around the country, many of our shortcomings stand out in
We are suffering from excessively high prices.
Our production is still not large enough to satisfy our demands.
Our minimum wages are far too low.
Small business is losing ground to growing monopoly.
Our farmers still face an uncertain future. And too many of them lack
the benefits of our modern civilization.
Some of our natural resources are still being wasted.
We are acutely short of electric power, although the means for developing
such power are abundant.
Five million families are still living in slums and firetraps. Three
million families share their homes with others.
Our health is far behind the progress of medical science. Proper medical
care is so expensive that it is out of the reach of the great majority
of our citizens.
Our schools, in many localities, are utterly inadequate.
Our democratic ideals are often thwarted by prejudice and intolerance.
Each of these shortcomings is also an opportunity-an opportunity for
the Congress and the President to work for the good of the people.
Our first great opportunity is to protect our economy against the evils
of "boom and bust."
This objective cannot be attained by government alone. Indeed, the greater
part of the task must be performed by individual efforts under our system
of free enterprise. We can keep our present prosperity, and increase it,
only if free enterprise and free government work together to that end.
We cannot afford to float along ceaselessly on a postwar boom until
it collapses. It is not enough merely to prepare to weather a recession
if it comes. Instead, government and business must work together constantly
to achieve more and more jobs and more and more production--which mean
more and more prosperity for all the people.
The business cycle is man-made; and men of good will, working together,
can smooth it out.
So far as business is concerned, it should plan for steady, vigorous
expansion--seeking always to increase its output, lower its prices, and
avoid the vices of monopoly and restriction. So long as business does this,
it will be contributing to continued prosperity, and it will have the help
and encouragement of the Government.
The Employment Act of 1946 pledges the Government to use all its resources
to promote maximum employment, production, and purchasing power. This means
that the Government is firmly committed to protect business and the people
against the dangers of recession and against the evils of inflation. This
means that the Government must adapt its plans and policies to meet changing
At the present time, our prosperity is threatened by inflationary pressures
at a number of critical points in our economy. And the Government must
be in a position to take effective action at these danger spots. To that
end, I recommend that the Congress enact legislation for the following
First, to continue the power to control consumer credit and enlarge
the power to control bank credit.
Second, to grant authority to regulate speculation on the commodity
Third, to continue export control authority and to provide adequate
machinery for its enforcement.
Fourth, to continue the priorities and allocation authority in the field
Fifth, to authorize priorities and allocations for key materials in
Sixth, to extend and strengthen rent control.
Seventh, to provide standby authority to impose price ceilings for scarce
commodities which basically affect essential industrial production or the
cost of living, and to limit unjustified wage adjustments which would force
a break in an established price ceiling.
Eighth, to authorize an immediate study of the adequacy of production
facilities for materials in critically short supply, such as steel; and,
if found necessary, to authorize Government loans for the expansion of
production facilities to relieve such shortages, and to authorize the construction
of such facilities directly, if action by private industry fails to meet
The Economic Report, which I shall submit to the Congress shortly, will
discuss in detail the economic background for these recommendations.
One of the most important factors in maintaining prosperity is the Government's
fiscal policy. At this time, it is essential not only that the Federal
budget be balanced, but also that there be a substantial surplus to reduce
inflationary pressures, and to permit a sizable reduction in the national
debt, which now stands at $252 billion. I recommend, therefore, that the
Congress enact new tax legislation to bring in an additional $4 billion
of Government revenue. This should come principally from additional corporate
taxes. A portion should come from revised estate and gift taxes. Consideration
should be given to raising personal income rates in the middle and upper
If we want to keep our economy running in high gear, we must be sure
that every group has the incentive to make its full contribution to the
national welfare. At present, the working men and women of the Nation are
unfairly discriminated against by a statute that abridges their rights,
curtails their constructive efforts, and hampers our system of free collective
bargaining. That statute is the Labor-Management Relations Act of 1947,
sometimes called the Taft-Hartley Act.
That act should be repealed!
The Wagner Act should be reenacted. However, certain improvements, which
I recommended to the Congress 2 years ago, are needed. Jurisdictional strikes
and unjustified secondary boycotts should be prohibited. The use of economic
force to decide issues arising out of the interpretation of existing contracts
should be prevented. Without endangering our democratic freedoms, means
should be provided for setting up machinery for preventing strikes in vital
industries which affect the public interest.
The Department of Labor should be rebuilt and strengthened and those
units properly belonging within that department should be placed in it.
The health of our economy and its maintenance at high levels further
require that the minimum wage fixed by law should be raised to at least
75 cents an hour.
If our free enterprise economy is to be strong and healthy, we must
reinvigorate the forces of competition. We must assure small business the
freedom and opportunity to grow and prosper. To this purpose, we should
strengthen our antitrust laws by closing those loopholes that permit monopolistic
mergers and consolidations.
Our national farm program should be improved-not only in the interest
of the farmers, but for the lasting prosperity of the whole Nation. Our
goals should be abundant farm production and parity income for agriculture.
Standards of living on the farm should be just as good as anywhere else
in the country.
Farm price supports are an essential part of our program to achieve
these ends. Price supports should be used to prevent farm price declines
which are out of line with general price levels, to facilitate adjustments
in production to consumer demands, and to promote good land use. Our price
support legislation must be adapted to these objectives. The authority
of the Commodity Credit Corporation to provide adequate storage space for
crops should be restored.
Our program for farm prosperity should also seek to expand the domestic
market for agricultural products, particularly among low-income groups,
and to increase and stabilize foreign markets.
We should give special attention to extending modern conveniences and
services to our farms. Rural electrification should be pushed forward.
And in considering legislation relating to housing, education, health,
and social security, special attention should be given to rural problems.
Our growing population and the expansion of our economy depend upon
the wise management of our land, water, forest, and mineral wealth. In
our present dynamic economy, the task of conservation is not to lockup
our resources but to develop and improve them. Failure, today, to make
the investments which are necessary to support our progress in the future
would be false economy.
We must push forward the development of our rivers for power, irrigation,
navigation, and flood control. We should apply the lessons of our Tennessee
Valley experience to our other great river basins.
I again recommend action be taken by the Congress to approve the St.
Lawrence Seaway and Power project. This is about the fifth time I have
We must adopt a program for the planned use of the petroleum reserves
under the sea, which are--and must remain--vested in the Federal Government.
We must extend our programs of soil conservation. We must place our forests
on a sustained yield basis, and encourage the development of new sources
of vital minerals.
In all this we must make sure that the benefits of these public undertakings
are directly available to the people. Public power should be carried to
consuming areas by public transmission lines where necessary to provide
electricity at the lowest possible rates. Irrigation waters should serve
family farms and not land speculators.
The Government has still other opportunities--to help raise the standard
of living of our citizens. These opportunities lie in the fields of social
security, health, education, housing, and civil rights.
The present coverage of the social security laws is altogether inadequate;
the benefit payments are too low. One-third of our workers are not covered.
Those who receive old-age and survivors insurance benefits receive an average
payment of only $25 a month. Many others who cannot work because they are
physically disabled are left to the mercy of charity. We should expand
our social security program, both as to the size of the benefits and the
extent of coverage, against the economic hazards due to unemployment, old
age, sickness, and disability.
We must spare no effort to raise the general level of health in this
country. In a nation as rich as ours, it is a shocking fact that tens of
millions lack adequate medical care. We are short of doctors, hospitals,
nurses. We must remedy these shortages. Moreover, we need--and we must
have without further delay--a system of prepaid medical insurance which
will enable every American to afford good medical care.
It is equally shocking that millions of our children are not receiving
a good education. Millions of them are in overcrowded, obsolete buildings.
We are short of teachers, because teachers' salaries are too low to attract
new teachers, or to hold the ones we have. All these school problems will
become much more acute as a result of the tremendous increase in the enrollment
in our elementary schools in the next few years. I cannot repeat too strongly
my desire for prompt Federal financial aid to the States to help them operate
and maintain their school systems.
The governmental agency which now administers the programs of health,
education, and social security should be given full departmental status.
The housing shortage continues to be acute. As an immediate step, the
Congress should enact the provisions for low-rent public housing, slum
clearance, farm housing, and housing research which I have repeatedly recommended.
The number of lowrent public housing units provided for in the legislation
should be increased to 1 million units in the next 7 years. Even this number
of units will not begin to meet our need for new housing.
Most of the houses we need will have to be built by private enterprise,
without public subsidy. By producing too few rental units and too large
a proportion of high-priced houses, the building industry is rapidly pricing
itself out of the market. Building costs must be lowered.
The Government is now engaged in a campaign to induce all segments of
the building industry to concentrate on the production of lower priced
housing. Additional legislation to encourage such housing will be submitted.
The authority which I have requested, to allocate materials in short
supply and to impose price ceilings on such materials, could be used, if
found necessary, to channel more materials into homes large enough for
family life at prices which wage earners can afford.
The driving force behind our progress is our faith in our democratic
institutions. That faith is embodied in the promise of equal rights and
equal opportunities which the founders of our Republic proclaimed to their
countrymen and to the whole world.
The fulfillment of this promise is among the highest purposes of government.
The civil rights proposals I made to the 80th Congress, I now repeat to
the 81st Congress. They should be enacted in order that the Federal Government
may assume the leadership and discharge the obligations dearly placed upon
it by the Constitution.
I stand squarely behind those proposals.
Our domestic programs are the foundation of our foreign policy. The
world today looks to us for leadership because we have so largely realized,
within our borders, those benefits of democratic government for which most
of the peoples of the world are yearning.
We are following a foreign policy which is the outward expression of
the democratic faith we profess. We are doing what we can to encourage
free states and free peoples throughout the world, to aid the suffering
and afflicted in foreign lands, and to strengthen democratic
nations against aggression.
The heart of our foreign policy is peace. We are supporting a world
organization to keep peace and a world economic policy to create prosperity
for mankind. Our guiding star is the principle of international cooperation.
To this concept we have made a national commitment as profound as anything
To it we have pledged our resources and our honor.
Until a system of world security is established upon which we can safely
rely, we cannot escape the burden of creating and maintaining armed forces
sufficient to deter aggression. We have made great progress in the last
year in the effective organization of our Armed Forces, but further improvements
in our national security legislation are necessary. Universal training
is essential to the security of the United States.
During the course of this session I shall have occasion to ask the Congress
to consider several measures in the field of foreign policy. At this time,
I recommend that we restore the Reciprocal Trade Agreements Act to full
effectiveness, and extend it for 3 years. We should also open our doors
to displaced persons without unfair discrimination.
It should be clear by now to all citizens that we are not seeking to
freeze the status quo. We have no intention of preserving the injustices
of the past. We welcome the constructive efforts being made by many nations
to achieve a better life for their citizens. In the European recovery program,
in our good-neighbor policy and in the United Nations, we have begun to
batter down those national walls which block the economic growth and the
social advancement of the peoples of the world.
We believe that if we hold resolutely to this course, the principle
of international cooperation will eventually command the approval even
of those nations which are now seeking to weaken or subvert it.
We stand at the opening of an era which can mean either great achievement
or terrible catastrophe for ourselves and for all mankind.
The strength of our Nation must continue to be used in the interest
of all our people rather than a privileged few. It must continue to be
used unselfishly in the struggle for world peace and the betterment of
mankind the world over.
This is the task before us.
It is not an easy one. It has many complications, and there will be
strong opposition from selfish interests.
I hope for cooperation from farmers, from labor, and from business.
Every segment of our population and every individual has a right to expect
from our Government a fair deal.
In 1945, when I came down before the Congress for the first time on
April 16, I quoted to you King Solomon's prayer that he wanted wisdom and
the ability to govern his people as they should be governed. I explained
to you at that time that the task before me was one of the greatest in
the history of the world, and that it was necessary to have the complete
cooperation of the Congress and the people of the United States.
Well now, we are taking a new start with the same situation. It is absolutely
essential that your President have the complete cooperation of the Congress
to carry out the great work that must be done to keep the peace in this
world, and to keep this country prosperous.
The people of this great country have a right to expect that the Congress
and the President will work in closest cooperation with one objective--the
welfare of the people of this Nation as a whole.
In the months ahead I know that I shall be able to cooperate with this
Now, I am confident that the Divine Power which has guided us to this
time of fateful responsibility and glorious opportunity will not desert
With that help from Almighty God which we have humbly acknowledged at
every turning point in our national life, we shall be able to perform the
great tasks which He now sets before us.