Statement by the President Upon Signing Bill Continuing Certain Subsidy Payments.

I HAVE SIGNED S. 502, a bill "to permit the continuation of certain subsidy payments and certain purchase and sale operations by corporations created pursuant to section 5d(3) of the Reconstruction Finance Corporation Act, as amended, and for other purposes." This bill authorizes subsidy payments or purchases during the fiscal year 1946 in amounts necessary to meet obligations incurred in prior years and in addition sets maximum limits on subsidy payments and anticipated losses from 1946 operations.

I have signed this bill because continuance of these subsidy payments is essential to assure necessary war output and to provide support for the stabilization program.

I interpret it as the desire of Congress that these subsidies shall be paid only as long as, and to the extent necessary to secure needed war production under existing price ceilings. As opportunity permits, therefore, subsidy programs will be reduced or discontinued as rapidly as feasible within the limits of the present laws. Due consideration will be given, of course, to the legitimate needs of producers and to the desirability of maintaining balance in our national and international procurement programs.

Administrative action to curtail copper, lead and zinc subsidies under the premium price plan would be prevented, however, during the fiscal year 1946 by the provision which makes all classes of such premiums non-cancellable during that year. If it becomes clear that continuance of these payments at present levels is no longer necessary for war purposes, I shall request enactment of supplemental legislation which would permit a reduction of such unnecessary subsidies. We must make sure that subsidies contribute to the essential purposes for which Congress authorized them.