Telephone Remarks to the Members of the Business Council.

Mr. Murphy and members of the Business Council:

When Bev Murphy called me last night, here at the ranch, and invited me to speak to the Business Council, I was pleased and proud to do so. I regret so much that my physical condition would not permit my attending your session in Washington.

The Business Council and I have the same objectives: strengthening and preserving America's free enterprise system. This system can be strengthened and will be preserved so long as responsible business, progressive labor, and dedicated government work together with understanding. So long as I am your President, that is my goal.

A year and a half ago I outlined a set of objectives for our Nation which, when achieved, will bring us into an era of a Great Society.

Those goals included: equal opportunity for all, education to the limit of every child's ability, employment opportunities for all who want to work, abolishing of poverty for all time to come, adequate medical care for every citizen, a decent home for every family, an end to our slums, and a restoration of our natural beauty. And the most important goal of them all--a durable and lasting peace throughout the world.

It was clear to us then--as it is clear to us now that one of the foundation stones of the Great Society must be a vital, growing economy.

A growing economy creates, of itself, more opportunities for more citizens.

A growing economy provides added revenues for the programs that only our governments-Federal, State, and local--can carry out.

In brief, the Great Society goes hand in hand with national prosperity.

It used to be said that the basis of prosperity could be summed up in a single word: confidence.

In our time, we have learned that a second word should be added. That word is "cooperation": business cooperation, labor cooperation, and Government cooperation.

Mere confidence is not enough. Neither is mere cooperation. But working together, they can build and sustain an economy unmatched in the history of man.

That is the story of our own generation.

We have built a sense of national confidence because we have committed our Government to the well-being of every sector of our economy.

We are not a labor government.

We are not a business government.

We are not a farmer's government.

We are the Government of all America. We have made it clear that we support a fair profit, a fair wage, and a fair price.

We understand the complex workings of our society. We know that if one sector falters, the others will soon falter as well.

Out of this interdependence has come a new sense of national cooperation. In the past year alone, every segment of our economy has made major contributions toward advancing our American prosperity.

The Government enacted an excise tax reduction to further stimulate sales--and the vast majority of manufacturers and retailers passed these reductions on to the American consumer.

Representatives from both management and labor of the steel industry worked around the clock for days and nights on end to avert a strike and to agree on a new wage contract that was within the administration's noninflationary guideposts. And the average annual wage increase in all major contracts worked out this year--involving some 4 million workers--was 3.3 percent, very close to the suggested guideposts.

The Congress acted with equal restraint in passing a noninflationary pay raise for our Federal civilian workers. Your President made it clear that any pay raise beyond the guidepost boundaries would be vetoed.

The guideposts are designed to help American labor and American business achieve full employment while avoiding a wage-price spiral.

They provide reasonable standards for responsible behavior by labor and business.

Another vital example of Government industry cooperation came in the areas of excess aluminum stockpiles. It has been a source of major concern to me that we should be maintaining a stockpile far in excess of any conceivable Government requirement-while at the same time importing aluminum from abroad to meet increased Government defense needs.

The aluminum industry and the Government agreed on a plan to eliminate our excess surplus in an orderly manner. The copper industry and the Government also worked out an agreement to release copper from the stockpile to meet rising demands in the face of interruptions to foreign supplies. These agreements will help meet our defense requirements, eliminate costly storage that the Government is paying, help improve our balance of payments deficit, and are part of a program to add almost a billion dollars a year to our national treasury.

Also during the past year, Government, industry, and labor have been working together on an expanded manpower development and training program. This is adding a fresh flow of workers with needed skills to the labor market. It is reducing unemployment. It is creating more consumers. It is adding to our revenues.

Thus with confidence in our future, with cooperation across the board, with commonsense, unselfishness, and wisdom, business, labor, and Government have sustained the longest peacetime expansion in American history--58 months of unbroken prosperity. Since early 1961:

--Our gross national product has risen more than 35 Percent--$174 billion.

--Our consumers are spending $104 billion more a year.

--Our unemployment rate has dropped to its lowest in 8 years, and the number of unemployed is now 3 million, the lowest since 1957.

--Disposable personal income has been lifted from $1,940 to $2,400 per capita, a rise of 25 percent.

--Wages and salary income have increased 33 percent.

--And corporate profits after taxes have increased 84 percent.

In short, more workers are employed, more citizens are living better, and more businesses are earning higher profits than ever before in our history.

This prosperity is all the more meaningful because during our 58-month expansion we have been able to avoid inflation. Our American prices have remained more stable than those of any other industrial nation in all the world.

From 1961 through 1964, wholesale prices remained virtually stable, while consumer prices rose only 1.2 percent a year. This record was made possible by the stability of unit labor costs in industry, by general stability of material costs, by an abundant capacity to produce, and by responsible key price and wage decisions.

In the past 12 months wholesale prices have risen by 2.3 percent, and consumer prices by 1.8 percent. Increases in farm and food prices from March to July account for most of the faster advance in consumer prices, and for about half of the advance in wholesale prices. This situation has now fairly stabilized, and we do not expect such an outbreak next year. In the past 4 months both wholesale prices and consumer prices have been advancing at a rate of less than r percent a year.

We expect next year to be another record year for the American economy. We are ever alert to danger signs, of course, and when we see them, we will promptly act accordingly. But we do not anticipate any major problems that confidence and cooperation cannot solve.

Our needs are growing, but our economy is growing too. We can produce the goods and services we require without "overhearing" our economy !

Looking well into next year, we see strong markets and excellent profits.

We see further expansion of business investment.

We see a higher standard of living for our citizens.

We see more than $3 billion of hospital and supplemental health insurance benefits for our elder citizens going into effect next July--on top of this year's already nearly 15 percent expansion in social security payments.

We see attainment of our goal of equilibrium in balance of payments (a quarter of a billion dollars either side of balance in our accounts).

We see a further reduction in unemployment below the present 4.2.

In short, we see continued expansion at a reasonable pace.

This is the confidence that our prosperity requires.

And the other element--the element of cooperation--will be there, too. The record of the past year says that it will.

So this morning, as we Americans visit together, your boys and our boys fight to preserve freedom and to defend justice in the rice paddies of Viet-Nam. They have put the needs of their country and their Government ahead of their personal desires and their personal hopes. We must pray not only for their safe return, but to unite behind them, as they unite among themselves. We must support them from here, as they support each other there. We must equal their sacrifice and uphold their cause with the same devotion here at home as they give so willingly out there.

No one of us--businessman, laboringman, Government employee--can ever forget that what American fighting men are doing in Viet-Nam may very well determine the shape and the form of your future--and of our Nation's future.

Here at home we have built strength and prosperity. In Viet-Nam the American soldier is exerting that strength, and using that 'prosperity, to construct a durable road to peace in the world.

For all that we are and all that we ever hope to be is nothing, if our passion and our purpose is not peace.

Today, all around the world, Americans are working for peace:

--In Santo Domingo the OAS and Ambassador Ellsworth Bunker have shown a patience and an understanding that have banked the hot fires of violence.

--In Rio de Janeiro, Dean Rusk and Averell Harriman have led the way to a rededication of our Alliance for Peaceful Progress.

--In Rome, Orville Freeman has taken the lead in new planning for the peaceful victory of humanity over hunger--by cooperation and by self-help.

--In Paris, Robert McNamara has led in enlarging the conception of peaceful cooperation in the common defense of the Atlantic Community.

--In New York, Ambassador Arthur Goldberg has made it plain that we are working for disarmament with all who will work with us.

--In Washington, some 1,400 American citizens have gathered for 3 days to work on ways for international cooperation and peace and they have joined in frank and helpful discussions with the members of their Government.

--And, most of all, the Americans in Viet-Nam serve peace as they work and as they fight--side by side with gallant allies from Korea and Australia and New Zealand, and side by side with the people and soldiers of South Viet-Nam, and with the active support of more than 30 other nations in the world. Our common purpose there is to end aggression and to open the path to peaceful choice. All the world can be sure that the Americans in Viet-Nam have the firm and have the solid backing of the overwhelming majority of their countrymen.

So we stand for peace and we work for peace--in our own land and in every land-in our own time and for all time. There can be peace, especially in Viet-Nam, whenever men in other capitals are ready.

I have said it before. I say it again now. This Nation is ready to talk, unconditionally, anywhere, with peace as our agenda.

Peace will come, because it just must come. It will come from courage, from constancy, and from concern. It will come because there is no other answer.

Peace is our commitment. Peace is our goal. Peace will be the only victory that we seek. And peace will come.

Thank you, and good morning.