Address and Question and Answer Period in Tampa Before the Florida Chamber of Commerce.
Mr. Chairman, your distinguished Governor, Senator Smathers, Congressmen Sam Gibbons, Dante Fascell, Claude Pepper, ladies and gentlemen:
I am delighted to be here at this distinguished gathering. I came at the suggestion of the senior Senator of Florida, Senator Smathers, who represents this State with distinction, and also, of course, is the Majority Whip in the Senate and therefore speaks for the United States. So I am glad to come here as the son of two citizens of Florida, my mother and father; to come here with your Governor, who has helped make the decisions which I think will make progress in Florida possible not only now, but in the future; and I am glad particularly to be here with this group who played such a leading role, Tom Fleming and others, in securing passage of the bonds which will make it possible for Florida to have the kind of educational system which is necessary for leadership in this State and country.
I have said before, in the presence once of the Governor, that I felt that the extraordinary progress which California had made in many technical and engineering fields was due to the emphasis which that State had put on higher education. And I think the effort which this State is making to make your schools and colleges and universities as good as they possibly can be, to make it possible for you to take care of the twice as many boys and girls who will be trying to get into our colleges in 1970 as were in 1960--because this group, which ordinarily would not be regarded as free spenders, supported this great State effort, I want to commend you.
A little more than r year ago, when our bill to grant a tax credit for business investment was before the Congress, Secretary of the Treasury Dillon was on a plane to this State, and he found himself talking to one of the leading Florida businessmen about the investment tax credit. He spent some time, he later told me, explaining how the bill would help this man's corporate outlook and income, and the businessman was most impressed. Finally, as the plane landed at Miami, he turned to Secretary Dillon and said, "I am very grateful to you for explaining the bill. Now tell me just once more: why is it I am against it?"
That story is unfortunately not an exaggeration. Many businessmen, who are prospering as never before during this administration, are convinced nevertheless that we must be anti-business. With the new figures on corporate profits after taxes having reached an all-time high, running some 43 percent higher than they were just 3 years ago, they still suspect us of being opposed to private profit. With the most stable price level of any comparable economic recovery in our history, they still fear that we are promoting inflation. We have liberalized depreciation guidelines to grant more individual flexibility, reduced our farm surpluses, reduced transportation taxes, established a private corporation to manage our satellite communication system, increased the' role of American business in the development of less developed countries, and proposed to the Congress a sharp reduction in corporate as well as personal income taxes, and a major de-regulation of transportation, and yet many businessmen are convinced that a Democratic administration is out to soak the rich, increase controls for the sake of controls, and extend at all costs the scope of the Federal bureaucracy.
The hard facts contradict these doubts. This administration is interested in the healthy expansion of the entire economy. We are interested in the steady progress of our entire society. And it is in this kind of program, in my opinion, in which American business has the largest stake.
Why is it that profits are at an all-time high in the Nation today? It is because the Nation as a whole is prospering. It is because our gross national product is rising from $500 billion to $600 billion, a record rise of $100 billion in 3 years, 36 months. It is because industrial production in the last 3 years has increased 22 percent, and personal income by 15 percent. It is because, as the Wall Street Journal pointed out last week, the United States now leads most of Western Europe in the rate of business expansion. For the first time in many years, in the last 18 months our growth rate exceeds that of France or Germany. It is because, as Fortune magazine recently pointed out, corporate profits in America are now rising much faster than corporate profits overseas. It is because these profits have not been eaten up by an inflationary spiral. And finally, it is because we have reversed the dismal trend towards even more frequent recessions which are the greatest enemy of profits.
By next April, with the indispensable help of the pending tax cut bill, the United States will be sailing with the winds of the longest and strongest peacetime economic expansion in our Nation's entire history.
I do not say that all this is due to the administration alone, but neither is it all accidental. The fiscal and monetary policies which we have followed are the key elements in whether the economy moves toward a path of expansion or restriction. In the last 3 years, American business and industry have directly benefited from a host of our legislative and administrative actions which increased corporate tax flow, increased markets at home and abroad, increased consumer purchasing power, and increased plant modernization and productivity. And still other steps have been taken to curb the wageprice spiral--the first 6 months of 1963 there was less time lost in strikes than any time since the Second World War--to hold down the cost of credit, and to bring more harmony into industrial relations.
I do not say that these actions were taken for the benefit of business alone. They were taken to benefit the country. Some of them were labeled pro-business, some of them were labeled anti-business, some of them were labeled both by opposing groups. But that kind of label is meaningless. This administration is "pro" the public interest.
Nor do I say that all of these policies could please all American businessmen all of the time. So long as the interest and views of businessmen frequently clash with each other, no President could possibly please them all.
Most businessmen, though perhaps not most business spokesmen, are associated with small business. They ask the Government for assistance--to protect them against monopoly, to assure them of reasonable credit, to enable them to participate in defense contracts. And both large and small business work with the various arms of the administration every day on trade, transportation, procurement, balance of payments, and international business affairs. They do not show the hostility which is so often described or find that our policies and personnel are so incompatible with their own.
Businessmen are welcome at the White House, and I welcome the chance to address business meetings such as this, not because I expect that it will necessarily affect the resuits of the elections, but I do think it can affect what this country does and how it moves ahead, and whether we are going to be able to find jobs for all the people that need them, and whether we are going to build the kind of a country in which all of us can take pride and credit. And that is the kind of cooperative effort which I invite from businessmen and from other interested citizens.
If we can keep open the channels of communication, this country can make progress ahead. To further that understanding, I would like to answer four questions that I am most frequently asked by businessmen or written about or written to.
The first and most frequently asked question is: Is the Federal Government growing so large that our private economy is endangered?
My answer to that is no. The Federal Government has been growing for 175 years. Our population has grown even faster. Our territory and economy have grown and become more closely linked; the size of our business, labor, farm, and other establishments, and organizations, have grown. Above all, our responsibilities around the world have grown and our stake in world peace has grown immeasurably. Life itself is ,more complex and the American people in the 20th century have come to expect more from governmental action.
But there has been no sudden spurt in the growth of Government under this administration. Leaving national security outlays aside, the Federal civilian expenditures today when measured, as they should be measured in a growing economy, as a percentage of our national output, are no higher than they were at the end of the Second World War. A mere 5 percent of our gross national product is not a threat to our economy.
The real growth, and this will not come as a surprise to your Governor, the real growth in government has been at the State and local level. Between 1948 and 1962, while Federal civilian expenditures were rising by 65 percent, State spending on the average across this country rose by 227 percent, from less than $10 billion in '48 to over $30 billion in 1962. Florida's State expenditures in that same period rose by 270 percent, or more than four times as fast, percentage-wise, as the Federal budget; Georgia by 331 percent; Ohio by 300 percent; Kentucky by 431 percent.
The Federal Government has no desire to expand the size and scope of its activities merely for the sake of expansion. Many tasks would never have been taken on by the Congress had they been able to be fulfilled at the State and local level. And this administration has made efforts to transfer to private ownership many of the financial assets held by the Government, to substitute private for public credit, to reduce farm surpluses, to dispose of excess commodities, and to make our transportation system less restrictive. This is a far cry, I believe, from a Government too big for the economy.
Secondly, I am asked: Are not continuing deficits and the mounting national debt certain to drive us into bankruptcy?
And my answer to that is no. Once again we must look at the facts in perspective. From 1948 to 1962 the total Federal debt increased less than 20 percent. We had the Korean war, all our obligations abroad, a tremendously growing country, tremendously growing population. The Federal debt grew by less than 20 percent, while the average for all the States was 500 percent. Or taking only the 4 years, from 1958 to 1962, the Federal debt rose only 8 percent, while State debt as a whole went up 41 percent.
Obviously, neither the States nor the Nation are teetering on the edge of bankruptcy as the result of these debts. In 1945 our national debt was 120 percent of our gross national product. Today it is 53 percent. Next year it will be 52 percent. At a time when our debt has gone up by the percentage I described, our gross national product has doubled, and therefore as this country moves to a trillion dollar economy, which we are moving towards, it is quite obvious as long as we maintain these proportions, the fiscal credit of the United States will still be secure.
While the Federal net debt was growing less than 20 percent in these years, total corporate debt--not my debt, your debt-was growing by nearly 200 percent and the total indebtedness of private individuals rose by 300 percent. So who is the most cautious fiscal manager, you gentlemen or us?
It is true that the pending tax cut will add to this debt by temporarily reducing Federal revenues, but the purpose of the tax cut is not to produce a deficit but to boost the economy. A full employment economy is the only way to balance the budget. A recession-ridden economy, recessions occurring every 24 or 30 or 32 months, on the other hand, is a guarantee of chronic, higher deficits and continually deeper debt. We must remember that in 1958, President Eisenhower sent up a budget to the Hill which was balanced in surplus by a half billion dollars. As a result of the recession of 1958, that budget ended up that year unbalanced $12 1/2 billion. The great enemy of the balanced budget is a recession. And it is to 'prevent a recession, and to provide for economic growth, and provide for the jobs for the 10 million people who are coming into the labor market in the next 21/2 years, that I strongly believe in the tax cut very quickly and not too far away.
Third, I am asked: Why can't this administration cut Federal expenditures? And my answer is that we have cut. I recommended an additional $620 million of reductions in this year's budget since first submitting it last January. Domestic civilian expenditures, excluding national defense, space, and interest on the debt, domestic civilian expenditures were budgeted below the level of last year, a feat rarely accomplished in the last 15 years. Once 16 percent larger than State and local expenditures, our Federal civilian expenditures are now 43 percent smaller. What all this suggests is not that the States have been less prudent than we have been, but that this country is growing and the needs are growing. You here in Florida, in this Chamber, know it very well or you wouldn't have supported a $75 million debt obligation on the people of Florida. You can't tell the children of this State that they can't go to college in 1970 because you didn't take the decisions in 1963. And what you are trying to do in this State is what we are trying to do across the country. What we have to do is be prudent, responsible, selective, make our judgments about what is really necessary and valuable, and what can be put aside. That, it seems to me, is the essence of responsible management by the National Government, by the State government, by the local community, and by private business.
We have reduced the number of Federal employees serving every 1,000 people in this country. There are no more people today working for the Federal Government than there were 10 years ago. Federal employment has not increased in the last 10 years. There are less people working today for the Federal Government than there were a year ago. But it will go up because this country grows.
The question is, in what proportion? But I can assure you that there will be less Federal employees serving every 1,000 people next year than there were this year.
Secretary McNamara has instituted cost reductions, for example, in the Pentagon which will save a billion dollars a year, and finally save $4 billion a year. We are constantly reexamining these programs to determine what can be done. Many of those who call for larger expenditure cuts are forgetting the growth of our population and the complexities of our problems. And economy advocates from Florida are not opposed to the cross-Florida barge canal, which was so strongly supported by your Governor and by me, or the space effort at Cape Canaveral, or the Tampa Air Force Fuel Annex. They talk, instead, about midwestern feed grain programs and far western reclamation projects. But out West the economizers talk about the Tampa Air Force Fuel Annex. And so the argument goes on across the country.
And fourth and finally, the question arises: Will the fiscal policies of the Government lead to inflation? And my answer to that is no. The danger of inflation arises when the level of total public and private demand presses against our productive capacity. We are far from that today. Total output in this country would have to increase by $30 billion to reduce unemployment to 4 percent. Our productive plant, as all of you know, is still well below what you could produce operating at maximum capacity. Idle men and machines allow plenty of room for decreased taxes and increased demand without the risk of inflation. The tax cut, moreover, can be expected to stimulate productivity and growth, and thus add to our productive potential, lessening the danger of inflation.
It has long been believed that a budget deficit automatically meant inflation. The facts indicate otherwise. The record peacetime deficit of 1959 produced no inflation then or subsequently, nor have the deficits of recent years. In fact most of our postwar inflation occurred in the years of budget surpluses, '47, '48, '51, '56, and '57.
Recent scattered price increases have caused concern and stimulated fear that expanded demand would lead to inflation. But the wholesale price index so far shows little or no reflection of these increases. Some prices have been reduced and most prices have not moved. Many of the increases have been in the price of raw materials which have declined, and inasmuch as the trend of such prices has been stable or downward for a number of years, some recovery is not unexpected. But the abundance of the world's raw materials would indicate that even here we do not have to fear serious inflationary pressures. Moreover, the current remarkable stability of labor costs per unit of output clearly indicates that such price increases as have occurred do not reflect a general upward surge of costs.
I realize that there are some businessmen who feel only they want to be left alone, that Government and politics are none of their affairs, that the balance sheet and profit rate of their own corporation are of more importance than the worldwide balance of power or the Nationwide rate of unemployment. But I hope it is not rushing the season to recall to you the passage from Dickens' "Christmas Carol" in which Ebenezer Scrooge is terrified by the ghosts of his former partner, Jacob Marley, and Scrooge, appalled by Marley's story of ceaseless wandering, cries out, "But you were always a good man of business, Jacob." And the ghost of Marley, his legs bound by a chain of ledger books and cash boxes, replied, "Business? Mankind was my business. The common welfare was my business. Charity, mercy, forbearance and benevolence were all my business. The dealings of my trade were but a drop of water in the comprehensive ocean of my business!"
Members and guests of the Florida State Chamber of Commerce, whether we work in the White House or the State House or in a house of industry or commerce, mankind is our business. And if we work in harmony, if we understand the problems of each other and the responsibilities that each of us bears, then surely the business of mankind will prosper. And your children and mine will move ahead in a securer world, and one in which there is opportunity for them all.
[A question and answer period followed.]
[1.] Q. Mr. President, as you can see, we have an avalanche of questions. You have answered many that have been asked, but we would request, sir, that you answer a few more that have been submitted by the audience and which you have not seen. So bear with me in the selection of the questions. The most popular question is, what is your policy towards Cuba?
THE PRESIDENT. When this administration took office, Castro, of course, was in control of Cuba, and the United States has made efforts, along with other countries of the Organization of American States, to provide for a return to democratic government in Cuba. Those efforts, of course, have not been successful. We have, however, in association with other countries of this hemisphere, joined together in an attempt to isolate the virus of communism, and in that regard we have achieved some measure of success. Only five countries in this hemisphere now recognize Cuba. In 1959, the trade of the free world with Cuba was about $1,300 million. Now, in 1963 there has been an 80 percent reduction in that trade.
There has been, for example, in the first 10 months of 1963, a 60 percent reduction, as compared to 1962, of the number of free registry, free world registered ships. And now with the recent order put out by the Greek Government, which, with British traders, were the great free world traders with Cuba, we are going to find a further sharp reduction. In addition, while there is a good deal of discontent and turmoil and danger in Latin America, I do not think that there is any doubt that Fidel Castro, as a symbol of revolt in this hemisphere, has faded badly. Every survey, every report, I think every newspaperman, every publisher, would agree that because Mr. Castro has embraced the Soviet Union and made Cuba its satellite, that the appeal that he had in the late fifties and early sixties as a national revolutionary has been so badly damaged and scarred that as a symbol, his torch is flickering. We have not been successful in removing Mr. Castro. We should realize that that task is one which involves not only the security of the United States, but other countries. It involves possibilities of war. It involves danger to people as far away as West Berlin, Germany, countries which border upon the Soviet Union in the Middle East, all the countries that are linked to us in alliance, as the Soviet Union is so intimately linked with Cuba.
So we have attempted to isolate Cuba in the hope that some day Cuba will be free and that the pressures of life in Cuba will make it more obvious to people around this hemisphere that communism does not offer a shortcut to economic well-being. The gross national product of Cuba is 25 percent below what it was in 1958. The Soviet Union today is giving $450 million worth of assistance every year to Cuba. They are pouring into Cuba--and this should be a source of concern to us, because Latin America is still before us, and the challenge of Latin America--they are giving as much aid to Cuba alone as we are giving to all of Latin America. That is not a statistic in which I take particular pride, but it does indicate how heavy is their commitment and how successful so far has been their support.
Some Soviet troops still remain, not as armed units. There has been a substantial withdrawal, but there is a good deal of unfinished business in Cuba.
In answer to your question, Mr. Castro still is in control in Cuba, and still remains a major danger to the United States.
[2.] Q. Mr. President, how will the recent wheat deal with Russia affect our economy and will it lessen the U.S. problem of surplus grain?
THE PRESIDENT. Yes, it would, even though with the deal--if it goes through, and it amounts to 2 1/2 or 3 million tons--we would still have a surplus of 750 million bushels of wheat, which is still a substantial surplus. But it would affect--we now carry about a billion, and of course we pay the charges for the maintenance of that surplus. In addition, if the sale were consummated, it would provide $200 million to our balance of payments account, which is important. It would make our carrying charges of our surplus less. It would provide a higher price for wheat which otherwise will be depressed because of excess production next year. And therefore, if we can work the deal out, and that still is in question, I am for it.
[3.] Q. What is the outlook for your civil rights program and, sir, why are you pushing it so vigorously?
THE PRESIDENT. While I know that this program has not gotten great support here in Florida, I think you gentlemen should recognize the responsibility of the President of the United States. That responsibility is different from what your responsibility may be. In this country, I carry out, execute, the laws of the United States. I also have the obligation of implementing the orders of the courts of the United States. And I can assure you that whoever is President of the United States will do the same, because if he did not, he would begin to unwind this most extraordinary constitutional system of ours. So I believe strongly in fulfilling my oath in that regard.
Now, we have proposed legislation, the most controversial section of which deals with so-called public accommodation. The bill which came out of the Judiciary Committee, which is now going to be before the House shortly, has the following provisions in it on public accommodations. It provides that lunch counters shall be opened to all citizens, regardless of their race, their creed, or their color, and so shall hotels, motels, theaters--except in the case of rooming houses where they are owner-occupied and with six rooms or less. Now you gentlemen may not regard that--you may regard it as an intrusion on your property rights, but you should remember that over 33 States stretching back to 1875 have had provisions like this. Many States have much stronger provisions. In addition, some States have provisions making segregation compulsory. This is not a new action. And I really believe that after the events of the past 6 months that all of us, regardless of our own personal views, must recognize that if we are going to have domestic tranquillity, if we are going to see that our citizens are treated as I would like to be treated, and as you would like to be treated, that they have to meet a standard of conduct and behavior, but they are not automatically excluded from the benefits which other citizens enjoy merely because of their race, their creed, or their color.
Now, that is my view of what our responsibility is in 1963. The Congress, of course, must make the final judgment. What the Congress passes, I will execute. We will know in the next 2 or 3 months what judgment the Congress will reach. But I believe that this is a matter that is going to be with us long after I have disappeared from the scene. No country has ever faced a more difficult problem than tempting to bring 10 percent of the population of a different color, educate them, give them a chance for a job, and give them a chance for a fair life. That is my objective and I think it is the objective of the United States as I have always understood it.
[4.] Q. Mr. President, I think about half of the people here would like to know when you will announce that you are a candidate in the Presidential election of 1964.
THE PRESIDENT. I don't know which half-I think we are making progress in that way.
Q. You have nothing to say on this--about that?
THE PRESIDENT. No, just sort of leave it in doubt. I was a candidate so early in 1959 that I thought this time I would keep everybody in more suspense.
[5.] Q. Mr. President, would you comment on the scope and role of the proposed domestic peace corps?
THE PRESIDENT. Well, I am not sure Congress is going to pass it. It only passed the Senate by a very close vote. What our hope was--there are so many places, mental institutions, Indian reservations, parts of eastern Kentucky, for example, where there are high unemployment rates, where counties don't even have food distributed. There are some of our islands in the Pacific where we, for example, have had a bad epidemic of paralytic polio, which could have been avoided, it seems to me, if perhaps the Government had been more alert. But there are these areas of sort of islands of poverty in the United States, and it was our hope that we could enlist men and women of any age to serve perhaps a year or two years, at very limited compensation, and that they would inspire others in the community, working with the voluntary associations and with the local governments and the State governments, and the National Government, to try to serve as a catalyst to try to do here at home what the Peace Corps is doing abroad. It is new. We may not get it now, but we will sometime because I don't think there is any doubt that there is a strong streak of idealism in this country, a strong desire to serve. And as long as we are going to serve in the far corners of the world, I think we also might give them a chance to serve here at home.
[6.] Q. Thank you, sir. Because your schedule is a tight one, and because you answered so many of the questions in your remarks, this one is from a little girl who asks simply, "Why didn't you bring Caroline?"
THE PRESIDENT. Well, she likes it at the White House, but we will get her used to Florida.
I want to express my thanks to all of you. You have been very generous. I hope that-I am very grateful to you for your invitation. I hope any time you have any thoughts about how we can improve our operations that you will write, and if you don't write to me, that you will write to Senator Smathers, because I find that he forwards the messages very quickly from Florida.
Note: The President spoke in the Fort Homer Hesterly Armory in Tampa at the 47th annual meeting of the Florida State Chamber of Commerce. In his opening words he referred to Harold Colee, executive vice president of the Chamber of Commerce who served as chairman, and to Governor Farris Bryant, Senator George A. Smathers, and Representatives Sam M. Gibbons, Dante B. Fascell, and Claude Pepper, all of Florida. He later referred to Thomas F. Fleming, chairman of the board of the First National Bank and Trust Co., of Boca Raton, Fla.
John F. Kennedy, Address and Question and Answer Period in Tampa Before the Florida Chamber of Commerce. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/236729