Remarks to a Group of Business Magazine Editors in the Conference Room.

Ladies and Gentlemen:

I do not feel qualified, particularly, to talk to you about your business. You study the whole gamut of business activities in our country and on them you express your own conclusions and convictions.

But I might express a few ideas on two things: first, tell you some of the things that I believe about the work in which you are engaged; second, it might be useful for a moment to talk about some of the responsibilities that fall upon me and my associates in Government.

To start, there is an old military saying, "You can do nothing positive except from a firm base."

This means that if you don't have a region or a place or an area from which you can replace your casualties, supplies, ammunition, and all the rest--no matter how well you may start out on any expedition--you are in the long run lost. Even Hannibal, after thirteen years in Italy, could not finally win because he had no firm base on which to depend.

The great base today on which America must stand is a sound, expanding, healthy, and vigorous economy.

We must have that. If our economy is to develop properly, we must have something else: we must have an enlightened, informed public opinion. In any free country the great motivation which makes the whole thing operate is public opinion. If that opinion is well-informed respecting the vital issues of our day, then Congress and the Executive, heedful of that kind of opinion, are going to act with more wisdom than they otherwise might if they were thinking only of the next election.

We must have, then, an informed public opinion and a sound economy, and we must recognize their value not only to us but our standing in the world, including our security from any threatened attack, no matter of what character.

In these fields you people here this morning have a tremendous responsibility and a great opportunity. You can help enlighten America about the issues of our economy, its nature, its character, how it can be vigorous and expanding, more useful to us as a people, more effective in preserving and enhancing the position of leadership that has been forced upon America in the whole effort of advancing the cause of peace with justice.

Now a word, too, about the Executive responsibility to avoid unnecessary expenditures so that we may begin, no matter if even in moderate fashion, to reduce the national debt that this country is carrying.

That debt is important because we are taking today more than eight billion dollars out of your pockets for interest payments alone, with no reduction of the debt itself. That eight billion dollars of interest is going up. This is so because in this time of great prosperity, every kind of economic activity is seeking new money. There are new demands for new machinery in our productive processes, for building every kind of home and industrial facility, for roads and communications--for everything. The demand for money by municipalities, States, school districts, irrigation districts, and all the rest is unprecedented.

America--the Federal Government--has to compete with that kind of demand, not only for the eight billion dollars in interest payments on our national debt, but we have to compete in the market place in selling our bonds, which must be kept sound.

There is one method which is too often advocated for keeping the bonds at a nominal par value. That is to force them upon a central bank--make the central bank purchase them. Well, that's a very fine system, if you can make it work. But since the effect of the buying of our bonds by the central bank (Federal Reserve) increases the amount of credit, the result is inflationary. No country ever has made such a plan work over a long period. You don't have to go farther back in history than a year or two to find where these unfortunate results were experienced in one great European country.

But, if the United States Government is not to be in a position to compete with every business and every worthwhile economic activity for money in managing our 285-billion-dollar debt, we are going to be in trouble, particularly if we are denied the right to bid on a business basis-that is, at realistic interest rates. We cannot resort to artificial, forced methods and still keep our own confidence, and the confidence of the world in the American dollar.

Now every time--at least I found this when I was on the political stump--I used the expression "sound dollar" I was charged by my political opponents as being against the man of modest means.

To my mind, such a charge makes no sense at all. I would think that you people could do much to convince all our people that the sound dollar is their own real economic salvation.

Here we need an informed public opinion. In our Nation we have become what I call a pension society.

When I was a boy, it was thought we could live our lives on a little piece of ground in the West, and the older folks--grandfather and grandmother--could live in the same home, after their days of hard work were ended. That's the way we took care of ourselves and our older people. Today, through the changes in our industrial system, we as a people have become dependent for old age security, more and more upon pensions, insurance policies, savings bonds, and savings accounts. These are the people that are particularly hurt by depreciation of the dollar.

People who get a dollar one year and spend it that or the next year are not as much hurt even if there develops a sort of creeping inflation, or cheapening of the dollar. But the man who makes a living today and puts away his savings to be used 40 years from now can receive some startling lessons over that 40-year period.

My wife and I decided, in 1916, to get married. Since I, like all other second lieutenants, was always overdrawn at the bank, I decided that I ought to show a little more sense of responsibility. So I began to buy a small insurance policy.

Well, I gave up smoking ready-made cigarettes and went to Bull Durham and the papers. I had to make a great many sacrifices to buy that small insurance policy. Then 30 years later the company came around to pay it off. And I had even forgotten about it. It was so small that I would have been ashamed to ask my wife to exist on it for 6 months.

Yet, I still think of the fun we had in working for our own future. Indeed it was easy to make little sacrifices because I was young and of course very much in love.

But today, think of the man at the lathe, the drill press, who is earning money which he is putting away in his pension with his company or into an insurance policy. If we today cannot assure him that 40 years from now he is going to be able to have a good living left, then I say, sooner or later, he will quit buying insurance policies; he will not have any confidence in the Government bond; and he will not think very much of his pension.

These are some of the facts that I think you people know about and undoubtedly you teach them. But I think we don't teach them strongly enough.

Our economy, if it is going to be competitive and a free economy, must be just that. It's the only way we are going to be strong and expanding. If we are going to live as a free people, we must not be a controlled people, and we must not start controlling prices in times of peace.

We are living in a time of prosperity that looks like it is assuming boom proportions. If now, today, we can't pay off some of the Federal debt, then our financing is going to have to be done under very unsatisfactory methods, to the damage of all of us. In the long run there will be inflation, there will be a further cheapening of our money, and it won't be the rich that will be suffering. Instead it will be all those millions who with their hands and brains, typewriters, shovels, and all the rest, are producing the wealth of the United States, and depending upon insurance and pension plans for old age security.

So as I leave you, I thank you for your patience in listening to a very homey exposition of some of my own views and convictions on this subject. They may not be very erudite but they are earnest and firm.