Remarks at a Meeting With the President's Committee on Consumer Interests.

WHEN WE upgraded the President's Committee on Consumer Interests to Cabinet and agency-head level last May, we had a specific purpose in mind.

--We wanted it to be an effective voice for the consumer at the highest levels of the administration.

--We wanted it to be our ear for individual consumer complaints.

--We wanted it to cooperate with business and industry to improve practices in the marketplace.

--And we wanted it to play a major innovative role in consumer legislation.

We have legislation before Congress right now that concerns every one of your agencies and departments.

I have recommended 12 major actions to this session of Congress. You know what they are. They cover everything from truth in lending to the safe movement of natural gas by pipelines.

I want you to get behind these bills with every power at your command.

Your job is to help protect the American consumers--to help them find the best and safest products at the most reasonable prices. My job-and Congress--is to help contain inflationary price increases in every way we Call.

By keeping a close watch on our economy, we have prevented the cost of the conflict in Vietnam from overwhelming the marketplace.

From July of 1965 to July of this year, the Consumer Price Index rose 5.7 percent. In the first 2 years of the Korean war, 1950 to 1952, that index rose 11.3 percent. And in the first a years of World War II, it rose 19.8 percent.

By maintaining economic stability we have, during the past 6 years, kept our consumer price rise lower than that of any nation of the industrial west.

From the first quarter of 1961 through the second quarter of 1967, our consumer prices rose 11.2 percent. By contrast, during that period:

--prices in the United Kingdom rose 24.9 percent,

--prices in France rose 23.9 percent,

--prices in Italy rose 32.3 percent,

--prices in Germany rose 19.4 percent, and

--prices in Japan rose 41.8 percent.

But if we don't get the tax surcharge we have asked for, we are going to be unable to hold the line. The Consumer Price Index has already started to speed up.

From October of 1966 to May 1967, it rose 1.0 percent. But from May to August 1967, it has already risen 1.1 percent.

The price rise we will have without the surcharge will be felt directly by the consumer. For instance:

--A family of four with an income of $5,000 (who would pay nothing under the surcharge plan) will pay, we estimate, $147 a year for inflation.

--A family with an income of $10,000 will pay $285 for inflation, or $174 more than they would pay if the surcharge went into effect.

--And a family making $20,000 will pay $316, $224 more than under the surtax plan.

The rise in prices would not be compensated for, in many cases, by a similar rise in income. Millions of families, especially the aged and those in lower income brackets, live on fixed incomes. As an additional penalty, the real value of whatever savings they may have will be diminished by inflation.

The heaviest burden, as always in inflationary times, would fall on the poor, the old, the farmer, and the small businessman.

The housing industry will probably be the worst hit of our businesses. During the tight money period last year--and under its after-effects this year--we lost over half a million housing starts.

This could happen again. Without the tax bill, we could have--in effect--a 20 percent excise tax on houses.

Every day the Congress delays in passing the tax bill, the Federal Government loses $20 million in revenues. The longer the delay, the more drastic the cutbacks that will be necessary.

We must work together--you, with your responsibility for fairness in the marketplace, and Congress and the Executive, with our responsibility for reducing the tax of inflation.