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Statement by the President Upon Signing Resolution "To Aid in Protecting the Nation's Economy Against Inflationary Pressures."

August 16, 1948

I HAVE signed Senate Joint Resolution 157.

I have done so even though it is clear that the Congress in passing this law failed to meet its responsibility to the American people.

This bill represents the feeble response of the Congress to the demands of our people for strong, positive action to relieve us from the hardships of exorbitant prices and to protect us from the inflationary dangers which threaten our prosperity. The failure to take adequate measures in this critical situation is final proof of the determination of the men who controlled the 80th Congress to follow a course which serves the ends of special privilege rather than the welfare of the whole Nation.

The record is clear.

I called the Congress together and laid before its Members the facts concerning the continuing increases in prices--facts already too well known to most of us. At the same time, I laid before them a comprehensive and specific program for dealing with inflation.

I proposed a balanced program that would protect all--not just the few. The excess profits tax would assure a government surplus and thus protect the public debt and the public credit. Allocations would assure fair distribution of scarce commodities and thus protect vital production. Price control would protect wage and salary earners, farmers, and all consumers. Credit controls would protect those who pay the penalty for inflationary expansion of credit-both borrowers and lenders.

The Congress said "no" to my program. They had no program of their own. They made excuses and called names and argued about who was to blame for inflation, but they did nothing effective to control it.

They passed a bill limited to one subject only--credit controls--which is but a tiny fraction of what we need. Then the Congress went home.

The Congress talked a lot about who is responsible for high prices. I think the record is clear on this, too. This question was answered by the Republican Whip in the Senate when he said, "It was the Republican leadership in the Senate and the House that was responsible for ending OPA."

But the important job which faced the 80th Congress was not to debate "Who killed price control?" It was not even to demonstrate the foolishness of those who argued 2 years ago that prices would "take care of themselves if only we would get rid of price control." The important task fore the Congress was to halt the continuing spiral of inflation, no matter how it started.

The recommendation I have repeatedly made to the Congress since November 1947 is that we should take action to halt the course of inflation; not that we should hold a debate to settle the blame for it. I recommended methods that we knew would work. They worked in wartime when inflationary pressures were much greater than they are now. The chief difference is that controls now would need to be applied much less stringently and in many fewer places than during the war. This is true because a more adequate supply of goods is now available to meet the demands of consumers. During the war only about half of our national production was available for domestic civilian consumption. Now about 90 percent is available.

But the controls which are needed now, are needed badly. Prices are pulling away from the incomes of most of our people, and we are being forced to get along with less and less. Millions of housewives throughout the country are finding it impossible to pay today's high prices for the food and clothing their families need.

Unless inflation is checked, the situation will get even worse, and we shall invite economic collapse.

This is a situation that calls for firm action; and it calls for the right kind of action. There is a right way and a wrong way to deal with inflation.

The right way to fight inflation is to strike hard at the trouble spots which represent the excesses of inflation, and at the same time to help the people who are its victims. The measures I have proposed would do just that. These measures would prevent some people from getting too much, and would help others to get enough. They would put our whole economy on an even keel, and thus would help everybody in the long run.

Then there is the wrong way to deal with inflation. That is to let the plain people bear the brunt of its burdens, while special interests reap the benefits of excessive prices. We have heard a lot lately from people who advocate this method.

These people say it would be inflationary to increase the pitifully inadequate benefits provided by our present social security laws. They say it would be inflationary to increase the minimum wage for people who earn only $16 a week. They say it would be inflationary to aid the States in providing adequate schools and decent salaries for teachers. They say it would be inflationary to develop urgently needed electric power. They say it would be inflationary to encourage decent low-rental housing.

But these same men who would protect us from inflation by sacrificing these urgent needs refuse to do anything about the excessive profits of giant corporations. They protest against the inflationary consequences which would follow if an aged couple trying to live on $39 a month were to have another $19.50 a month. But they did not protest against the inflationary consequences of reducing the taxes of a couple with a $100,000 income so that they would have another $16,725 a year to spend.

These same men say that we could put an end to inflation if we were willing to let wages fall behind prices, stop supporting farm prices, bring about a recession, and create large-scale unemployment.

I do not believe that we must sacrifice prosperity to overcome inflation.

I do not believe that we should fight inflation by putting the average American family through the wringer.

I do not believe that we should fight inflation by withholding aid from those who are suffering most from the skyrocketing cost of living.

I assert as a part of my basic philosophy that this Nation has the resources and the ingenuity to maintain good farm prices, good wages, full employment, and maximum production. This can be done if we have faith and act together. It cannot be done if we turn our backs on common problems and completely ignore the bitter lessons of our recent economic history.

Unfortunately for all of us, this Congress has failed to heed those lessons of the immediate past.

Note: As enacted, the joint resolution is Public Law 905, 80th Congress (62 Stat. 1291).

Harry S Truman, Statement by the President Upon Signing Resolution "To Aid in Protecting the Nation's Economy Against Inflationary Pressures." Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/232739

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