[Delivered from the White House at 9 p.m.]
My fellow countrymen:
The crucial situation which confronts our country requires that I report to the people this evening.
Today I returned to the Congress without my approval the extension of the Price Control Law which it presented to me for my signature.
I returned it with a long message stating my reasons. I hope that you will all read that message in your newspapers.
I assure you, my fellow countrymen, that before I vetoed this bill I gave the subject long days and nights of consideration. I consulted with practically every top official in the Government. Either personally or through representatives I obtained the views of people in agriculture, industry, and labor, as well as many others.
You have all heard a great deal about inflation. Its seriousness cannot be overestimated. It would affect every individual in our country. Inflation would cause an increase in the price of every article you buy. As prices soared with inflation, your money would buy fewer and fewer of the necessities of life. Your savings, your insurance, your war bonds--all would decrease in value.
For five years we have proved to this country and to the world that inflation can be prevented. Those of you who remember the First World War will recall the wild inflation and the collapse that followed. You will remember how farmers were ruined, how business men went bankrupt, how wage earners suffered. This time we have succeeded in preventing such a calamity. We have done this largely through price control. It was not done by a miracle. It was done because the American people had the wisdom and the courage and the restraint to know that they had to submit to restrictions and controls or be overcome by the force of inflation. We must continue to prevent inflation. This is as important now and in the months to come as it was during the war. Time and again I have stated and restated this proposition.
I wanted to sign a price control bill. I gave this bill long and careful study. I came to the conclusion that the bill which the Congress sent me was no price control bill at all. It gave you no protection against higher and higher prices.
Having reached that conclusion, I was faced with these alternatives. I could sign the bill on the plea which had been made to me that for the immediate present at least, it might be a little better than nothing. Or I could disapprove the bill, and call upon the Congress to give the American people a real, workable, price control law.
If I had taken the first course and signed the bill, I would have encouraged the false impression that you were going to be protected for the next year against excessive price increases. But, sooner or later, all of you would have awakened to a bitter realization of the truth. You would have soon began to see thousands and thousands of price increases, adding billions and billions of dollars to our cost of living. It is hard to see how people could continue to pay higher and higher prices without requiring higher wages or salaries. The tremendous advances that we have made toward the settlement of labor-management disputes over wages would have been wiped out. The mad chase to inflation would soon have been under way.
I could not permit that to happen.
I took the second alternative, knowing full well all the dangers which would come with it. I knew that there was danger that the Congress might not pass a resolution which would give us some kind of protection after midnight tomorrow when the present price control law ends. I knew, therefore, that it was very possible that for a few days at least, we might be without any price control law.
I could not bring myself to believe, however, that the representatives of the American people--your Senators and Representatives in the Congress--would permit such a condition to continue long. And I was sure that when this issue was presented to the American people and to the Congress there could be only one answer. That answer is that the Congress should immediately pass a resolution continuing present price and rent controls until the Congress can pass a workable bill.
It would have been much easier for me to sign this bill. But the American people would have soon realized that real price control was at an end in spite of the law. If I had signed the bill the people would have seen their prices going up, day by day. You would have realized soon that the bill which had been passed and called a price control law was not price control at all.
What I have done is to call a spade a spade. I must now rely upon the American people and upon a patriotic and cooperative Congress to protect us all from the great pressures now upon us, leading us to disastrous inflation unless we have the means to resist them.
I know how weary you all are of these restrictions and controls. I am also weary of them. I spend a good deal of my time listening to complaints. I know how eager every one of you is for the day when you can run your own affairs in your own way as you did before the war. I know, therefore, how strong the temptation is to remove too quickly the safeguards which we have built up for ourselves and our children.
The bill which the Congress sent me yielded to that temptation.
It is certainly most unfortunate that the Congress kept delaying and delaying action on this bill for so many months when they knew that the price control law was going to expire tomorrow.
I am sure that all of you know of the efforts which I made to get the Congress to act on a price control extension far in advance of the date when the old law was going to expire. As far back as September last year, in a message to the Congress, I urged it to pass an extension of the price control act at an early date. I did not rest with that Message of last September. In later communications to the Congress, I repeated my request four times to extend price control. In addition to these direct communications, I stated publicly many times how important it was to our safety that a price control extension bill should be passed right away.
But I could not persuade the Congress to act. Instead, just two days before the expiration of all price control this impossible bill was sent to me.
In my veto message to the Congress which I sent this morning I discussed the various provisions of the bill.
I do not have time this evening to comment on all the provisions of the bill. There are many objections to it, but my most fundamental objection is to the price raising amendment for manufacturers which was introduced by Senator Taft.
Under this amendment there would be thousands of needless price increases amounting to many billions of dollars. The Taft amendment provides that the manufacturer shall receive for each article the profit which he made on that article in 1941 and that he may add to the 1941 selling price all increases in cost which have occurred since that time. In 1941 the manufacturer received a much greater profit out of each dollar of sales than at any time in the five preceding years or in any of the five following wartime years. In fact, profit margins in 1941 were 50 percent greater than in the banner year 1929.
Volume of sales is much greater today than in 1941, so that manufacturers would have received a bonanza. In addition, Senator Taft's fellow Republicans, Senator Wherry and Representative Crawford, put amendments into the bill which made sure that not only would the manufacturers' price increases be borne by the public but that such increases would be pyramided by generous wholesalers' and retailers' markups.
As you sit in your homes this evening your interest in this bill and my interest in this bill are exactly the same. The question is: What effect would this bill have had on you--the people of our country?
I believe in the profit system and desire that profits should be ample to provide the incentive for full production. The Taft amendment, however, provides for higher prices and higher profits even where production is already going at full blast and profits are wholly satisfactory.
We have been through five difficult years. We are looking forward to buying the things we need. Let us examine this problem together.
Do you need a new low-price automobile? If so, what effect would the Taft amendment have had on the price of your new car? It would have increased immediately the prices of the popular makes of automobiles by two hundred and twenty-five to two hundred fifty dollars per car.
Are you a veteran planning to build a home for yourself and family? The Taft amendment would have added immediately a minimum of twenty percent to the cost of your building materials. The program recently approved by the Congress to provide veterans' housing at reasonable cost would have been completely disrupted by this Taft amendment.
Are you a housewife who has been waiting for years for that new washing machine or refrigerator? The Taft amendment would have made it cost one-third more right away.
Are you faced with the responsibility of clothing your family? Under the Taft and other amendments the already high clothing prices would have been increased fifteen percent right away. For clothing alone the American people would have paid at least three billion dollars more a year.
Are you in a business in which you need to buy steel? The price of steel would have gone up under the Taft amendment between four and eight dollars per ton right away.
Are you a farmer? Under this bill the price of farm machinery would have gone up thirteen percent right away.
Those are only a few examples of the first round of increases the Taft amendment would bring. But that is only the beginning. Price increases in one industry are cost increases in another. By the time, for example, that the automobile industry had got its Taft increase based on present costs, it would be hit by the Taft increases in steel, tires, safety glass, and other materials. So automobiles would go up still more.
In this way increase would follow increase. The bill had no stopping place in it.
In addition, these increases would have been passed right down the line. You, the consumer, would pay it all.
All of us agree that what this country needs is production. Production brings jobs, good wages, moderate prices. Perhaps the most vicious effect of the Taft amendment would be to slow up production.
The only possible justification urged for all of these Taft price increases is the claim that they are necessary to encourage production. Even if they did encourage production, that would still be a terrific price to pay for that increased production--a price measured in suffering and distress among people of moderate and low incomes.
The fact is, however, that production would not be stimulated by the Taft amendment, but would be greatly impeded. Nobody wants to sell his goods this week if he can get a better price for them next week. This is no mere theory. You have seen it working day after day for the last month or so, as people began to believe that price control might soon come to an end.
People who had cattle and hogs to sell for slaughter for food have decided to hold them for higher prices. People who had clothing for sale have decided to do the same thing. So have people with innumerable other commodities which we all need so badly now.
Incidentally, I have asked the Attorney General to make an investigation of some of the factors involved in our present shortages to determine whether anyone is criminally responsible for them and to place the responsibility where it belongs.
These instances of withholding goods from the consumer would be multiplied thousands of times under the Taft amendment. Production and deliveries would be slowed down waiting for price increases. This would create bottlenecks of essential materials and essential parts which would bring production lines to a halt. By the time they started up again there would be new applications for price increases and additional waiting for greater profits. Labor would be penalized by loss of employment. Consumers would be penalized by lack of goods and ever rising prices. Farmers would be penalized by higher prices for what they buy and reduced markets for the things they sell.
It is a cruel jest to say that the Taft amendment would aid production. As I also pointed out this morning in my veto message, the Taft amendment would wholly destroy our program of wage stabilization which has been built up since V-J Day. It would destroy the usefulness of the Wage Stabilization Board.
The result would be the beginning of an inevitable spiral of uncontrolled inflation-a race between rising wages and rising prices. Far-sighted leaders of both labor and management know that nothing can be gained--and everything lost--by simply letting prices and wages chase each other.
Despite the total impossibility of stabilizing other prices under this bill, I would have hesitated to disapprove it if I had thought it gave some real protection against soaring food prices and rents. We have learned, however, that higher prices for the things that farmers and landlords buy, would inevitably force up food prices and rents. In both instances, serious increases would be forced upon us by the hard facts of business and economics.
I realize that the great majority of our people do not have the facts and figures that must be considered in order to know what a bill like this would do. That is why I am speaking to you this evening. You are entitled to have the facts before you.
I want to make clear that my decision to veto this bill does not mean any lack of appreciation of the sincere and tireless efforts of the leaders and many other members of the Senate and the House of Representatives to pass a workable price control bill. I know that many members of both houses who voted for the bill which was sent to me did so with regret and only because they had, at that time, no opportunity to vote for a good bill. Now every member has a clear cut opportunity to show whether or not he wants effective price controls.
I have submitted to the Congress in my veto message a plan for price control legislation for the comparatively short period of time that it is still needed. The will of the people is still the supreme law of our land. Your determination to retain price controls and so prevent inflation must be made known to the Congress. The Congress is the only branch of our Government which has the power to pass a law providing for proper price control.
Now because of Congressional delay we are faced with a brief period in which legal restraints on price increases will be lacking. I have urged the Congress to act immediately and to adopt the kind of bill which can be made to work.
But, in the event of delay, I know that the United States can depend upon the patriotism and good sense of its citizens. Therefore, I call upon every businessman, every producer and every landlord to adhere to existing regulations, even though for a short period they may not have the effect of law. It would be contrary to their own interest to embark upon a reckless period of inflation. It is to their own interest to exercise self-restraint until some action can be obtained from the Congress.
I also request every employee of the OPA to stay at his battle station. The fight is not over. I am counting on all employees of the OPA to continue to serve in the future as they have in the past and to finish the job. I urge these loyal civil servants and the thousands of volunteers who are giving their time to make price control a success, to see this fight through. 1
1 On June 30 the President issued Executive Order 9745 "Providing for the Interim Administration of Certain Continuing Functions of the Office of Price Administration" (3 CFR, 1943-1948 Comp., p. 554).
For letter requesting the members and staff to remain at their posts, see Item 156.
And, finally, my fellow citizens, I say to you that we as a nation have it within our hands to make this post-war period an era of the greatest opportunity and prosperity in our nation's history. But if short-sightedness and impatience, if partisanship and greed, are allowed to triumph over the efforts to maintain economic stability, this grand opportunity will have been sacrificed. That must not happen.
With your help and understanding it will not happen.