Message to the Special Session of the 80th Congress
Speaker, and Members of the 80th Congress:
The urgent needs of the American people require our presence here today.
Our people demand legislative action by their Government to do two things: first, to check inflation and the rising cost of living, and second, to help in meeting the acute housing shortage.
These are matters which affect every American family. They also affect the entire world, for world peace depends upon the strength of our economy.
The Communists, both here and abroad, are counting on our present prosperity turning into a depression. They do not believe that we can--or will--put the brake on high prices. They are counting on economic collapse in this country.
If we should bring on another great depression in the United States by failing to control high prices, the world's hope for lasting peace would vanish. A depression in the United States would cut the ground from under the free nations of Europe. Economic collapse in this country would prevent the recovery throughout the world which is essential to lasting peace. We would have only ourselves to blame for the tragedy that would follow.
In these tense days, when our strength is being taxed all over the world, it would be reckless folly if we failed to act against inflation.
High prices are not taking "time off" for the election.
High prices are not waiting until the next session of Congress.
High prices are getting worse. They are getting worse every day.
We cannot afford to wait for the next Congress to act.
The 81st Congress will not get under way for nearly 6 months. Before the new Congress could take action against high prices, it would have to draft new bills, study them, hold hearings, debate and decide whether to pass them. It would be at least 8 months from now before the new Congress could pass the laws we need.
Eight months more of inflation would be much too long.
It was 8 months ago--November 1947--that I called a special session of this Congress, and recommended a comprehensive anti-inflation program. But that program was not enacted. If it had been enacted, we would have lower prices today.
Since last November, prices have gone even higher. As every housewife knows, food prices rose rapidly throughout 1947. They are climbing even faster now. Month after month, the cost of clothing, fuel, and rent keeps on going up.
The cost of living is now higher than ever before in our history.
There are not many very rich men in the Congress of the United States. You all-most of you--have to live on your salaries. All you need do is just go home and ask your wife how living costs are now, as compared to what they were January 1st, 1947.
We cannot risk the danger, or suffer the hardship, of another 8 months of doing nothing about high prices.
Prices are already so high that last year more than one-fourth of the families of this country were forced to spend more than they earned. Families of low or moderate income are being priced out of the market for many of the necessities of life. They are not able to buy as much as they could buy 2 years ago, and they are paying a lot more for what they can buy.
At the same time, industrial prices, which affect all business and employment, are rising, and rising fast. Large price increases have recently been announced by industries that set the pace for the whole economy. Just within the last few days, the steel industry, for example, increased its prices, on the average, by more than $9 a ton.
The rise in industrial prices is just as important, in the long run, as the high cost of living. It is already squeezing the independent businessman. It threatens to destroy a fair balance between industry and agriculture. It can end only in catastrophe if it is allowed to continue.
In the face of these facts, it is foolish to point at every feeble straw as a sign that the danger is disappearing. In February, some people said that the break in commodity prices meant that inflation was almost over. They were wrong. Prices rose again.
There are still some people who repeat the old argument which was used by those who killed price control 2 years ago. They said that if we would only take controls off, production would increase, prices would go down, and there would be more for everybody at lower cost.
The record shows unmistakably that this argument was false.
Production has increased somewhat, and we want it to increase still more. But even with full employment, full use of available materials, and practically full use of plant capacity--all of which we have today--prices are still climbing much faster than production. It is obvious that we cannot rely solely on more production to curb high prices. Instead, we must attack inflation directly.
If we do not stop inflation, production and employment will both fall sharply when the break comes.
Positive action by this Government is long over-due. It must be taken now.
I therefore urge the Congress to take strong, positive action to control inflation. I have reexamined the anti-inflation program I proposed to the Congress 8 months ago. In its essentials that program is as sound now as it was then. It has been revised and strengthened in the light of changing circumstances. The program I now propose is as follows:
First, I recommend that an excess profits tax be reestablished in order to provide a Treasury surplus and to provide a brake on inflation.
Second, I recommend that consumer credit controls be restored in order to hold down inflationary credit.
Third, I recommend that the Federal Reserve Board be given greater authority to regulate inflationary bank credit.
Fourth, I recommend that authority be granted to regulate speculation on the commodity exchanges.
Fifth, I recommend that authority be granted for allocation and inventory control of scarce commodities which basically affect essential industrial production, or the cost of living.
Sixth, I recommend that rent controls be strengthened, and that adequate appropriations be provided for enforcement, in order to prevent further unwarranted rent increases.
Seventh, I recommend that standby authority be granted to ration those few products in short supply which vitally affect the health and welfare of our people. On the basis of present facts, and unless further shortages occur, this authority might not have to be used.
Eighth, I recommend that price control be authorized for scarce commodities which basically affect essential industrial production or the cost of living. I have said before, and I repeat, that many profit margins have been adequate to absorb wage increases without the price increases that have followed. Rising wages and rising standards of living, based on increasing productivity and a fair distribution of income, is the American way. Noninflationary wage increases can and should continue to be made by free collective bargaining. Where the Government imposes a price ceiling, wage adjustments which can be absorbed within the price ceiling should not be interfered with by the Government. The Government should have the authority, however, to limit wage adjustments which would force a break in the price ceiling, except where wage adjustments are essential to remedy hardship, to correct inequities, or to prevent an actual lowering of the living standards.
The measures I have recommended make up a balanced program to attack high prices. They are all necessary to check rising prices and safeguard our economy against the danger of depression. If they are made the first order of business by the Congress, as they should be, they can be promptly enacted. Every week of delay will mean additional hardship for the American people.
The second reason why I have called the Congress back is that our people need legislation now to help meet the national housing shortage.
We desperately need more housing at lower prices--prices which families of moderate income, particularly veterans' families, can afford to pay. We are not getting it.
Even more urgently, we need more rental housing--especially low-rent housing. We are not getting it.
Most of the housing now being built is for sale, or for rent, at prices far above the reach of the average American family.
I have recommended time and again that the Congress pass a comprehensive housing bill which would help us obtain more housing at lower prices--both for sale and for rent.
A good housing bill, Senate Bill 866, known as the Taft-Ellender-Wagner bill, passed the Senate on April 22. This bill would provide aid to cities in clearing slums and in building low-rent housing projects. It would give extensive aid to the private home building industry. It includes provisions for farm housing, and for research to bring down building costs. It contains many other provisions, all aimed at getting more housing at lower prices and at lower rents.
This is the bill we need. We need it now, not a year from now.
If this legislation is passed this summer, it will be possible to start immediately the production of more houses of the kind our families need, and at prices they can afford to pay. If it is not passed now, the 81st Congress will have to start all over again with a new housing bill. In that case, we might lose a full year in meeting our national housing need.
This Congress can complete action on this comprehensive housing bill in a few days. And I strongly urge that it do so.
I have called the Congress back primarily to deal with high prices and with the housing shortage. Delay on either of these items would be most dangerous. In addition, there are other important legislative measures on which delay would injure us at home and impair our world relations.
I therefore recommend that the present session, without allowing anything to interfere with its vital work on legislation concerning high prices and housing, take action on certain other important measures. These measures can speedily be enacted now because of the amount of study already given to them by the Congress.
First, the Congress should provide Federal assistance to the States in meeting the present crisis in education. The children in our schools, and the men and women who teach there, have been made the victims of inflation. More children are entering school than ever before. But inflation has cut down the purchasing power of the money devoted to educational purposes. Teachers' salaries, for the most part, have lagged far behind the increased cost of living. The overcrowding of our schools is seriously detrimental to the health and the education of our boys and girls. Every month that we delay in meeting this problem will cause damage that can never be repaired. Several million children of school age are unable to attend school, largely because of lack of facilities or teachers.
To meet these vital educational needs, the Congress should complete action on Senate Bill 472, which passed the Senate on April the 1st. All that remains to be done is its passage by the House of Representatives.
Prompt action by the Congress is also needed to help another group of our people who are suffering from inflation. These are the workers who depend on the protection of the minimum wage law. The present minimum wage law is pitifully inadequate in the face of today's high prices. Proposals to raise minimum wages have long been before the Congress. I urgently recommend that the minimum wage be raised to at least 75 cents an hour at this session. Senate Bill 2062 and its companion House bills would be suitable measures for this purpose.
I also urge that action be taken by the Congress to relieve other victims of inflation. These are the people who depend upon the benefits being paid under the old-age and survivors insurance system. The average old-age retirement benefit for a man and his wife is only $39 a month. For a widow with two children, the average monthly benefit is only $49. These benefits are utterly inadequate. I urge that they be increased by at least 50 percent and that the age at which women can receive benefits be lowered from 65 to 60 years. I also hope that the protection of this system will be extended to the millions who are not now covered.
In our relations with the rest of the world, action is also needed at once, and can be taken quickly, to afford additional proof that we mean what we say when we talk about freedom, humanity, and international cooperation for peace and prosperity. Three measures are involved.
First, the Displaced Persons Act in its present form discriminates unfairly against some displaced persons because of their religion, land of origin, or occupation. These provisions are contrary to all American ideals. This act should be promptly amended to wipe out these discriminations. Furthermore, the present act permits the entry of only 200,000 persons, and charges them against future immigration quotas. I believe strongly that this act should provide for the entry of 400,000 persons over a 4-year period, and they should be outside the normal immigration quotas. The act can and should be amended promptly.
Second, many people in the world must wonder how strongly we support the United Nations when we hesitate to assist the construction of its permanent home in this country. Legislation can and should be passed at once to authorize a loan by the United States Government to the United Nations, for the construction of its headquarters buildings in New York City.
The International Wheat Agreement is another vital measure on which the Congress should act. This agreement is designed to insure stability in the world wheat market in the years ahead when wheat will be more plentiful. It would guarantee American farmers an export market of 185 million bushels of wheat at a fair price during each of the next 5 years. Since the agreement is in the form of a treaty it requires only ratification by the Senate. Although this agreement should have been ratified by July 1st of this year, we have good reason to believe that it can still be made effective if it is now ratified promptly.
Also, I wish to call the attention of the Congress to three other problems on which action can and should be taken at this session.
The Congress should reconsider its recent actions which cut sharply into our national electric power policy. There is an acute shortage of electric power in this country now. I am therefore re-submitting to the Congress appropriation requests for certain power projects which must be provided right away. These requests include the TVA steamplant at New Johnsonville, Tenn., and certain other projects on which congressional reductions, if allowed to stand, will delay the production of power for a year or more. These appropriations should be promptly enacted, and at the same time certain crippling limitations should be removed from the law.
In the final days before adjourning in June, the Congress passed a bill raising the salaries of some Federal employees. However, this bill neglected long overdue reforms in the Federal pay scales and discriminated unfairly against certain groups of employees. The Congress should take this opportunity to enact more equitable and realistic Federal pay legislation.
Finally, I again urge upon the Congress the measures I recommended last February to protect and extend basic civil rights of citizenship and human liberty. A number of bills to carry out my recommendations have been introduced in the Congress. Many of them have already received careful consideration by congressional committees. Only one bill, however, has been enacted, a bill relating to the rights of Americans of Japanese origin. I believe that it is necessary to enact the laws I have recommended in order to make the guarantees of the Constitution real and vital. I believe they are necessary to carry out our American ideals of liberty and justice for all.
I hope that there is no misunderstanding of the recommendations I have made. have asked the Congress to return, first of all, in order to meet the urgent need of our people for relief from high prices and the housing shortage. I urge the Congress not to be distracted from these central purposes.
At the same time, as I have stated, the Congress can and should act on certain other important items of legislation at this special session.
There are still other problems of great moment which vitally affect the welfare of the Nation. I have discussed them in previous messages to this Congress. I have made recommendations for legislation to meet them. I do not repeat them now--because the purposes and limited time of this special session do not readily permit action on them.
However, I feel just as strongly as ever that all these measures are necessary. If the Congress finds time to enact any of them now the country will greatly benefit. Certainly, the next Congress should take them up immediately.
These include: a comprehensive health program, based on health insurance; a fair and sound labor-management relations law-in place of the Taft-Hartley law which has proved to be unfair and unsound and which should be repealed; a real long-range farm program; a stronger reciprocal trade agreements act; a universal training program; a national science foundation; strengthened antitrust laws; and the approval of the St. Lawrence waterway treaty.
The vigor of our democracy is judged by its ability to take decisive actions--actions which are necessary to maintain our physical and moral strength and to raise our standards of living. In these days of continued stress, the test of that vigor becomes more and more difficult. The legislative and executive branches of our Government can meet that test today.
The American people rightfully expect us to meet it together. I hope that the American people will not look to us in vain.
Note: The President spoke at 12:30 p.m. His address was carried on a nationwide radio broadcast.
On August 12 the White House released the following "Summary of Action by the Congress on the President's Recommendations at the Special Session":
A. Major recommendations:
1. Anti-inflation program:
a. Excess profits tax. (Failed to act. Ways and Means Committee held no meetings; permitted no administration witnesses to testify.)
b. Consumer credit controls. (Enacted, but for a shorter period than recommended.)
c. Bank credit controls. (Enacted in part.)
d. Regulate speculations in commodities. (Failed to act. No administration witnesses permitted to testify.)
e. Authority for allocations and inventory controls. (Failed to act. House committee refused to hear administration case; Senate Committee cut hearings short.)
f. Strengthened rent control. (Failed to act. No administration witnesses permitted to testify.)
g. Authority to ration. (Failed to act. House committee refused to hear administration case; Senate Committee cut hearings short.)
h. Authority for price controls. (Failed to act. House committee refused to hear administration case; Senate Committee cut hearings short.)
2. Housing program. (House leadership refused to permit House to vote on Taft-Ellender-Wagner bill. Emasculated housing bill enacted instead.)
B. Other recommendations:
1. Aid to education. (Failed to act. House committee held no meeting. Bill had previously passed the Senate.)
2. Increase minimum wage. (Failed to act. Committees held no meetings. Hearings had previously been held.)
3. Increase social security benefits. (Failed to act. Senate committee held no meeting. Bill had previously passed House (in inadequate form).)
4. Amend Displaced Persons Act. (Failed to act. Senate leadership refused to permit action.)
5. Loan for United Nations headquarters. (Enacted.)
6. Ratify International Wheat Agreement. (Reported by Senate committee, but Senate leadership refused to permit ratification.)
7. Restore vital power appropriations and remove crippling restrictions. (Failed to act. House Appropriations Committee refused to hear administration witnesses. Senate defeated amendments when they were offered by Democratic Senators.)
8. Reforms in Federal pay scales. (Failed to act. House and Senate committees did not meet; permitted no administration testimony.)
9. Civil rights legislation. (Failed to act. Senate briefly considered antipoll tax bill, took no action.)
Harry S Truman, Message to the Special Session of the 80th Congress Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/232707