Infomotions, Inc.State of the Union Address / Kennedy, John F. (John Fitzgerald), 1917-1963



Author: Kennedy, John F. (John Fitzgerald), 1917-1963
Title: State of the Union Address
Publisher: Project Gutenberg
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Title: State of the Union Addresses of John F. Kennedy

Author: John F. Kennedy

Release Date: February, 2004  [EBook #5041]
[Yes, we are more than one year ahead of schedule]
[This file was first posted on April 11, 2002]
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*** START OF THE PROJECT GUTENBERG EBOOK OF ADDRESSES BY JOHN F. KENNEDY ***



This eBook was produced by James Linden.
Additional editing by Jose Menendez.

The addresses are separated by three asterisks: ***

Dates of addresses by John F. Kennedy in this eBook:
  January 30, 1961
  January 11, 1962
  January 14, 1963



***

State of the Union Address
John F. Kennedy
January 30, 1961

Mr. Speaker, Mr. Vice President, Members of the Congress:

It is a pleasure to return from whence I came. You are among my oldest
friends in Washington--and this House is my oldest home. It was here, more
than 14 years ago, that I first took the oath of Federal office. It was
here, for 14 years, that I gained both knowledge and inspiration from
members of both parties in both Houses--from your wise and generous
leaders--and from the pronouncements which I can vividly recall, sitting
where you now sit--including the programs of two great Presidents, the
undimmed eloquence of Churchill, the soaring idealism of Nehru, the
steadfast words of General de Gaulle. To speak from this same historic
rostrum is a sobering experience. To be back among so many friends is a
happy one.

I am confident that that friendship will continue. Our Constitution wisely
assigns both joint and separate roles to each branch of the government; and
a President and a Congress who hold each other in mutual respect will
neither permit nor attempt any trespass. For my part, I shall withhold from
neither the Congress nor the people any fact or report, past, present, or
future, which is necessary for an informed judgment of our conduct and
hazards. I shall neither shift the burden of executive decisions to the
Congress, nor avoid responsibility for the outcome of those decisions.

I speak today in an hour of national peril and national opportunity. Before
my term has ended, we shall have to test anew whether a nation organized
and governed such as ours can endure. The outcome is by no means certain.
The answers are by no means clear. All of us together--this Administration,
this Congress, this nation--must forge those answers.

But today, were I to offer--after little more than a week in
office--detailed legislation to remedy every national ill, the Congress
would rightly wonder whether the desire for speed had replaced the duty of
responsibility.

My remarks, therefore, will be limited. But they will also be candid. To
state the facts frankly is not to despair the future nor indict the past.
The prudent heir takes careful inventory of his legacies, and gives a
faithful accounting to those whom he owes an obligation of trust. And,
while the occasion does not call for another recital of our blessings and
assets, we do have no greater asset than the willingness of a free and
determined people, through its elected officials, to face all problems
frankly and meet all dangers free from panic or fear.

                                   I.

The present state of our economy is disturbing. We take office in the wake
of seven months of recession, three and one-half years of slack, seven
years of diminished economic growth, and nine years of falling farm
income.

Business bankruptcies have reached their highest level since the Great
Depression. Since 1951 farm income has been squeezed down by 25 percent.
Save for a brief period in 1958, insured unemployment is at the highest
peak in our history. Of some five and one-half million Americans who are
without jobs, more than one million have been searching for work for more
than four months. And during each month some 150,000 workers are exhausting
their already meager jobless benefit rights.

Nearly one-eighth of those who are without jobs live almost without hope
in nearly one hundred especially depressed and troubled areas. The rest
include new school graduates unable to use their talents, farmers forced to
give up their part-time jobs which helped balance their family budgets,
skilled and unskilled workers laid off in such important industries as
metals, machinery, automobiles and apparel.

Our recovery from the 1958 recession, moreover, was anemic and incomplete.
Our Gross National Product never regained its full potential. Unemployment
never returned to normal levels. Maximum use of our national industrial
capacity was never restored.

In short, the American economy is in trouble. The most resourceful
industrialized country on earth ranks among the last in the rate of
economic growth. Since last spring our economic growth rate has actually
receded. Business investment is in a decline. Profits have fallen below
predicted levels. Construction is off. A million unsold automobiles are in
inventory. Fewer people are working--and the average work week has shrunk
well below 40 hours. Yet prices have continued to rise--so that now too
many Americans have less to spend for items that cost more to buy.

Economic prophecy is at best an uncertain art--as demonstrated by the
prediction one year ago from this same podium that 1960 would be, and I
quote, "the most prosperous year in our history." Nevertheless, forecasts
of continued slack and only slightly reduced unemployment through 1961 and
1962 have been made with alarming unanimity--and this Administration does
not intend to stand helplessly by.

We cannot afford to waste idle hours and empty plants while awaiting the
end of the recession. We must show the world what a free economy can do--to
reduce unemployment, to put unused capacity to work, to spur new
productivity, and to foster higher economic growth within a range of sound
fiscal policies and relative price stability.

I will propose to the Congress within the next 14 days measures to improve
unemployment compensation through temporary increases in duration on a
self-supporting basis--to provide more food for the families of the
unemployed, and to aid their needy children--to redevelop our areas of
chronic labor surplus--to expand the services of the U.S. Employment
Offices--to stimulate housing and construction--to secure more purchasing
power for our lowest paid workers by raising and expanding the minimum
wage--to offer tax incentives for sound plant investment--to increase the
development of our natural resources--to encourage price stability--and to
take other steps aimed at insuring a prompt recovery and paving the way for
increased long-range growth. This is not a partisan program concentrating
on our weaknesses--it is, I hope, a national program to realize our
national strength.

                                  II.

Efficient expansion at home, stimulating the new plant and technology that
can make our goods more competitive, is also the key to the international
balance of payments problem. Laying aside all alarmist talk and panicky
solutions, let us put that knotty problem in its proper perspective.

It is true that, since 1958, the gap between the dollars we spend or
invest abroad and the dollars returned to us has substantially widened.
This overall deficit in our balance of payments increased by nearly $11
billion in the 3 years--and holders of dollars abroad converted them
to gold in such a quantity as to cause a total outflow of nearly $5
billion of gold from our reserve. The 1959 deficit was caused in large
part by the failure of our exports to penetrate foreign markets--the
result both of restrictions on our goods and our own uncompetitive
prices. The 1960 deficit, on the other hand, was more the result of an
increase in private capital outflow seeking new opportunity, higher
return or speculative advantage abroad.

Meanwhile this country has continued to bear more than its share of the
West's military and foreign aid obligations. Under existing policies,
another deficit of $2 billion is predicted for 1961--and individuals in
those countries whose dollar position once depended on these deficits for
improvement now wonder aloud whether our gold reserves will remain
sufficient to meet our own obligations.

All this is cause for concern--but it is not cause for panic. For our
monetary and financial position remains exceedingly strong. Including our
drawing rights in the International Monetary Fund and the gold reserve held
as backing for our currency and Federal Reserve deposits, we have some $22
billion in total gold stocks and other international monetary reserves
available--and I now pledge that their full strength stands behind the
value of the dollar for use if needed.

Moreover, we hold large assets abroad--the total owed this nation far
exceeds the claims upon our reserves--and our exports once again
substantially exceed our imports.

In short, we need not--and we shall not--take any action to increase the
dollar price of gold from $35 an ounce--to impose exchange controls--to
reduce our anti-recession efforts--to fall back on restrictive trade
policies--or to weaken our commitments around the world.

This Administration will not distort the value of the dollar in any
fashion. And this is a commitment.

Prudence and good sense do require, however, that new steps be taken to
ease the payments deficit and prevent any gold crisis. Our success in world
affairs has long depended in part upon foreign confidence in our ability to
pay. A series of executive orders, legislative remedies and cooperative
efforts with our allies will get underway immediately--aimed at attracting
foreign investment and travel to this country--promoting American exports,
at stable prices and with more liberal government guarantees and
financing--curbing tax and customs loopholes that encourage undue spending
of private dollars abroad--and (through OECD, NATO and otherwise) sharing
with our allies all efforts to provide for the common defense of the free
world and the hopes for growth of the less developed lands. While the
current deficit lasts, ways will be found to ease our dollar outlays abroad
without placing the full burden on the families of men whom we have asked
to serve our Flag overseas.

In short, whatever is required will be done to back up all our efforts
abroad, and to make certain that, in the future as in the past, the dollar
is as "sound as a dollar."

                                 III.

But more than our exchange of international payments is out of balance.
The current Federal budget for fiscal 1961 is almost certain to show a
net deficit. The budget already submitted for fiscal 1962 will remain in
balance only if the Congress enacts all the revenue measures requested--and
only if an earlier and sharper up-turn in the economy than my economic
advisers now think likely produces the tax revenues estimated.
Nevertheless, a new Administration must of necessity build on the spending
and revenue estimates already submitted. Within that framework, barring the
development of urgent national defense needs or a worsening of the economy,
it is my current intention to advocate a program of expenditures which,
including revenues from a stimulation of the economy, will not of and by
themselves unbalance the earlier Budget.

However, we will do what must be done. For our national household is
cluttered with unfinished and neglected tasks. Our cities are being
engulfed in squalor. Twelve long years after Congress declared our goal to
be "a decent home and a suitable environment for every American family," we
still have 25 million Americans living in substandard homes. A new housing
program under a new Housing and Urban Affairs Department will be needed
this year.

Our classrooms contain 2 million more children than they can properly have
room for, taught by 90,000 teachers not properly qualified to teach. One
third of our most promising high school graduates are financially unable to
continue the development of their talents. The war babies of the 1940's,
who overcrowded our schools in the 1950's, are now descending in 1960 upon
our colleges--with two college students for every one, ten years from
now--and our colleges are ill prepared. We lack the scientists, the
engineers and the teachers our world obligations require. We have neglected
oceanography, saline water conversion, and the basic research that lies at
the root of all progress. Federal grants for both higher and public school
education can no longer be delayed.

Medical research has achieved new wonders--but these wonders are too often
beyond the reach of too many people, owing to a lack of income
(particularly among the aged), a lack of hospital beds, a lack of nursing
homes and a lack of doctors and dentists. Measures to provide health care
for the aged under Social Security, and to increase the supply of both
facilities and personnel, must be undertaken this year.

Our supply of clean water is dwindling. Organized and juvenile crimes cost
the taxpayers millions of dollars each year, making it essential that we
have improved enforcement and new legislative safeguards. The denial of
constitutional rights to some of our fellow Americans on account of
race--at the ballot box and elsewhere--disturbs the national conscience,
and subjects us to the charge of world opinion that our democracy is not
equal to the high promise of our heritage. Morality in private business
has not been sufficiently spurred by morality in public business. A host
of problems and projects in all 50 States, though not possible to include
in this Message, deserves--and will receive--the attention of both the
Congress and the Executive Branch. On most of these matters, Messages will
be sent to the Congress within the next two weeks.

                                  IV.

But all these problems pale when placed beside those which confront us
around the world. No man entering upon this office, regardless of his
party, regardless of his previous service in Washington, could fail to be
staggered upon learning--even in this brief 10 day period--the harsh
enormity of the trials through which we must pass in the next four years.
Each day the crises multiply. Each day their solution grows more difficult.
Each day we draw nearer the hour of maximum danger, as weapons spread and
hostile forces grow stronger. I feel I must inform the Congress that our
analyses over the last ten days make it clear that--in each of the
principal areas of crisis--the tide of events has been running out and time
has not been our friend.

In Asia, the relentless pressures of the Chinese Communists menace the
security of the entire area--from the borders of India and South Viet Nam
to the jungles of Laos, struggling to protect its newly-won independence.
We seek in Laos what we seek in all Asia, and, indeed, in all of the
world--freedom for the people and independence for the government. And this
Nation shall persevere in our pursuit of these objectives.

In Africa, the Congo has been brutally torn by civil strife, political
unrest and public disorder. We shall continue to support the heroic
efforts of the United Nations to restore peace and order--efforts which
are now endangered by mounting tensions, unsolved problems, and decreasing
support from many member states.

In Latin America, Communist agents seeking to exploit that region's
peaceful revolution of hope have established a base on Cuba, only 90 miles
from our shores. Our objection with Cuba is not over the people's drive for
a better life. Our objection is to their domination by foreign and domestic
tyrannies. Cuban social and economic reform should be encouraged. Questions
of economic and trade policy can always be negotiated. But Communist
domination in this Hemisphere can never be negotiated.

We are pledged to work with our sister Republics to free the Americas of
all such foreign domination and all tyranny, working toward the goal of a
free hemisphere of free governments, extending from Cape Horn to the Arctic
Circle.

In Europe our alliances are unfulfilled and in some disarray. The unity of
NATO has been weakened by economic rivalry and partially eroded by national
interest. It has not yet fully mobilized its resources nor fully achieved a
common outlook. Yet no Atlantic power can meet on its own the mutual
problems now facing us in defense, foreign aid, monetary reserves, and a
host of other areas; and our close ties with those whose hopes and
interests we share are among this Nation's most powerful assets.

Our greatest challenge is still the world that lies beyond the Cold
War--but the first great obstacle is still our relations with the Soviet
Union and Communist China. We must never be lulled into believing that
either power has yielded its ambitions for world domination--ambitions
which they forcefully restated only a short time ago. On the contrary, our
task is to convince them that aggression and subversion will not be
profitable routes to pursue these ends. Open and peaceful competition--for
prestige, for markets, for scientific achievement, even for men's minds--is
something else again. For if Freedom and Communism were to compete for
man's allegiance in a world at peace, I would look to the future with ever
increasing confidence.

To meet this array of challenges--to fulfill the role we cannot avoid on
the world scene--we must reexamine and revise our whole arsenal of tools:
military, economic and political.

One must not overshadow the other. On the Presidential Coat of Arms, the
American eagle holds in his right talon the olive branch, while in his left
he holds a bundle of arrows. We intend to give equal attention to both.

First, we must strengthen our military tools. We are moving into a period
of uncertain risk and great commitment in which both the military and
diplomatic possibilities require a Free World force so powerful as to make
any aggression clearly futile. Yet in the past, lack of a consistent,
coherent military strategy, the absence of basic assumptions about our
national requirements and the faulty estimates and duplication arising from
inter-service rivalries have all made it difficult to assess accurately how
adequate--or inadequate--our defenses really are.

I have, therefore, instructed the Secretary of Defense to reappraise our
entire defense strategy--our ability to fulfill our commitments--the
effectiveness, vulnerability, and dispersal of our strategic bases, forces
and warning systems--the efficiency and economy of our operation and
organization--the elimination of obsolete bases and installations--and the
adequacy, modernization and mobility of our present conventional and
nuclear forces and weapons systems in the light of present and future
dangers. I have asked for preliminary conclusions by the end of
February--and I then shall recommend whatever legislative, budgetary or
executive action is needed in the light of these conclusions.

In the meantime, I have asked the Defense Secretary to initiate immediately
three new steps most clearly needed now:

First, I have directed prompt attention to increase our air-lift capacity.
Obtaining additional air transport mobility--and obtaining it now--will
better assure the ability of our conventional forces to respond, with
discrimination and speed, to any problem at any spot on the globe at any
moment's notice. In particular it will enable us to meet any deliberate
effort to avoid or divert our forces by starting limited wars in widely
scattered parts of the globe.

(b) I have directed prompt action to step up our Polaris submarine program.
Using unobligated ship-building funds now (to let contracts originally
scheduled for the next fiscal year) will build and place on station--at
least nine months earlier than planned--substantially more units of a
crucial deterrent--a fleet that will never attack first, but possess
sufficient powers of retaliation, concealed beneath the seas, to discourage
any aggressor from launching an attack upon our security.

(c) I have directed prompt action to accelerate our entire missile program.
Until the Secretary of Defense's reappraisal is completed, the emphasis
here will be largely on improved organization and decision-making--on
cutting down the wasteful duplications and the time-lag that have
handicapped our whole family of missiles. If we are to keep the peace, we
need an invulnerable missile force powerful enough to deter any aggressor
from even threatening an attack that he would know could not destroy enough
of our force to prevent his own destruction. For as I said upon taking the
oath of office: "Only when our arms are sufficient beyond doubt can we be
certain beyond doubt that they will never be employed."

Secondly, we must improve our economic tools. Our role is essential and
unavoidable in the construction of a sound and expanding economy for the
entire non-communist world, helping other nations build the strength to
meet their own problems, to satisfy their own aspirations--to surmount
their own dangers. The problems in achieving this goal are towering and
unprecedented--the response must be towering and unprecedented as well,
much as Lend-Lease and the Marshall Plan were in earlier years, which
brought such fruitful results.

(a) I intend to ask the Congress for authority to establish a new and more
effective program for assisting the economic, educational and social
development of other countries and continents. That program must stimulate
and take more effectively into account the contributions of our allies, and
provide central policy direction for all our own programs that now so often
overlap, conflict or diffuse our energies and resources. Such a program,
compared to past programs, will require

--more flexibility for short run emergencies

--more commitment to long term development--new attention to education at
all levels--greater emphasis on the recipient nation's role, their effort,
their purpose, with greater social justice for their people, broader
distribution and participation by their people and more efficient public
administration and more efficient tax systems of their own

--and orderly planning for national and regional development instead of a
piecemeal approach.

I hope the Senate will take early action approving the Convention
establishing the Organization for Economic Cooperation and Development.
This will be an important instrument in sharing with our allies this
development effort--working toward the time when each nation will
contribute in proportion to its ability to pay. For, while we are prepared
to assume our full share of these huge burdens, we cannot and must not be
expected to bear them alone.

To our sister republics to the south, we have pledged a new alliance for
progress--alianza para progreso. Our goal is a free and prosperous Latin
America, realizing for all its states and all its citizens a degree of
economic and social progress that matches their historic contributions of
culture, intellect and liberty. To start this nation's role at this time in
that alliance of neighbors, I am recommending the following:

--That the Congress appropriate in full the $500 million fund pledged by
the Act of Bogota, to be used not as an instrument of the Cold War, but as
a first step in the sound development of the Americas.

--That a new Inter-Departmental Task Force be established under the
leadership of the Department of State, to coordinate at the highest level
all policies and programs of concern to the Americas.

--That our delegates to the OAS, working with those of other members,
strengthen that body as an instrument to preserve the peace and to prevent
foreign domination anywhere in the Hemisphere.

--That, in cooperation with other nations, we launch a new hemispheric
attack on illiteracy and inadequate educational opportunities to all
levels; and, finally,

--That a Food-for-Peace mission be sent immediately to Latin America to
explore ways in which our vast food abundance can be used to help end
hunger and malnutrition in certain areas of suffering in our own
hemisphere.

This Administration is expanding its Food-for-Peace Program in every
possible way. The product of our abundance must be used more effectively to
relieve hunger and help economic growth in all corners of the globe. And I
have asked the Director of this Program to recommend additional ways in
which these surpluses can advance the interests of world peace--including
the establishment of world food reserves.

An even more valuable national asset is our reservoir of dedicated men and
women--not only on our college campuses but in every age group--who have
indicated their desire to contribute their skills, their efforts, and a
part of their lives to the fight for world order. We can mobilize this
talent through the formation of a National Peace Corps, enlisting the
services of all those with the desire and capacity to help foreign lands
meet their urgent needs for trained personnel.

Finally, while our attention is centered on the development of the non-
communist world, we must never forget our hopes for the ultimate freedom
and welfare of the Eastern European peoples. In order to be prepared to
help re-establish historic ties of friendship, I am asking the Congress
for increased discretion to use economic tools in this area whenever
this is found to be clearly in the national interest. This will require
amendment of the Mutual Defense Assistance Control Act along the lines I
proposed as a member of the Senate, and upon which the Senate voted last
summer. Meanwhile, I hope to explore with the Polish government the
possibility of using our frozen Polish funds on projects of peace that
will demonstrate our abiding friendship for and interest in the people
of Poland.

Third, we must sharpen our political and diplomatic tools--the means of
cooperation and agreement on which an enforceable world order must
ultimately rest.

I have already taken steps to coordinate and expand our disarmament
effort--to increase our programs of research and study--and to make arms
control a central goal of our national policy under my direction. The
deadly arms race, and the huge resources it absorbs, have too long
overshadowed all else we must do. We must prevent that arms race from
spreading to new nations, to new nuclear powers and to the reaches of outer
space. We must make certain that our negotiators are better informed and
better prepared--to formulate workable proposals of our own and to make
sound judgments about the proposals of others.

I have asked the other governments concerned to agree to a reasonable delay
in the talks on a nuclear test ban--and it is our intention to resume
negotiations prepared to reach a final agreement with any nation that is
equally willing to agree to an effective and enforceable treaty.

We must increase our support of the United Nations as an instrument to end
the Cold War instead of an arena in which to fight it. In recognition of
its increasing importance and the doubling of its membership

--we are enlarging and strengthening our own mission to the U.N.

--we shall help insure that it is properly financed.

--we shall work to see that the integrity of the office of the
Secretary-General is maintained.

--And I would address a special plea to the smaller nations of the
world--to join with us in strengthening this organization, which is far
more essential to their security than it is to ours--the only body in the
world where no nation need be powerful to be secure, where every nation has
an equal voice, and where any nation can exert influence not according to
the strength of its armies but according to the strength of its ideas. It
deserves the support of all.

Finally, this Administration intends to explore promptly all possible areas
of cooperation with the Soviet Union and other nations "to invoke the
wonders of science instead of its terrors." Specifically, I now invite all
nations--including the Soviet Union--to join with us in developing a
weather prediction program, in a new communications satellite program and
in preparation for probing the distant planets of Mars and Venus, probes
which may someday unlock the deepest secrets of the universe.

Today this country is ahead in the science and technology of space, while
the Soviet Union is ahead in the capacity to lift large vehicles into
orbit. Both nations would help themselves as well as other nations by
removing these endeavors from the bitter and wasteful competition of the
Cold War. The United States would be willing to join with the Soviet Union
and the scientists of all nations in a greater effort to make the fruits
of this new knowledge available to all--and, beyond that, in an effort to
extend farm technology to hungry nations--to wipe out disease--to increase
the exchanges of scientists and their knowledge--and to make our own
laboratories available to technicians of other lands who lack the
facilities to pursue their own work. Where nature makes natural allies of
us all, we can demonstrate that beneficial relations are possible even
with those with whom we most deeply disagree--and this must someday be the
basis of world peace and world law.

                                   V.

I have commented on the state of the domestic economy, our balance of
payments, our Federal and social budget and the state of the world. I would
like to conclude with a few remarks about the state of the Executive
branch. We have found it full of honest and useful public servants--but
their capacity to act decisively at the exact time action is needed has too
often been muffled in the morass of committees, timidities and fictitious
theories which have created a growing gap between decision and execution,
between planning and reality. In a time of rapidly deteriorating situations
at home and abroad, this is bad for the public service and particularly bad
for the country; and we mean to make a change.

I have pledged myself and my colleagues in the cabinet to a continuous
encouragement of initiative, responsibility and energy in serving the
public interest. Let every public servant know, whether his post is high or
low, that a man's rank and reputation in this Administration will be
determined by the size of the job he does, and not by the size of his
staff, his office or his budget. Let it be clear that this Administration
recognizes the value of dissent and daring--that we greet healthy
controversy as the hallmark of healthy change. Let the public service be a
proud and lively career. And let every man and woman who works in any area
of our national government, in any branch, at any level, be able to say
with pride and with honor in future years: "I served the United States
government in that hour of our nation's need."

For only with complete dedication by us all to the national interest can we
bring our country through the troubled years that lie ahead. Our problems
are critical. The tide is unfavorable. The news will be worse before it is
better. And while hoping and working for the best, we should prepare
ourselves now for the worst.

We cannot escape our dangers--neither must we let them drive us into panic
or narrow isolation. In many areas of the world where the balance of power
already rests with our adversaries, the forces of freedom are sharply
divided. It is one of the ironies of our time that the techniques of a
harsh and repressive system should be able to instill discipline and ardor
in its servants--while the blessings of liberty have too often stood for
privilege, materialism and a life of ease.

But I have a different view of liberty.

Life in 1961 will not be easy. Wishing it, predicting it, even asking for
it, will not make it so. There will be further setbacks before the tide is
turned. But turn it we must. The hopes of all mankind rest upon us--not
simply upon those of us in this chamber, but upon the peasant in Laos, the
fisherman in Nigeria, the exile from Cuba, the spirit that moves every man
and Nation who shares our hopes for freedom and the future. And in the
final analysis, they rest most of all upon the pride and perseverance of
our fellow citizens of the great Republic.

In the words of a great President, whose birthday we honor today, closing
his final State of the Union Message sixteen years ago, "We pray that we
may be worthy of the unlimited opportunities that God has given us."

***

State of the Union Address
John F. Kennedy
January 11, 1962

Mr. Vice President, my old colleague from Massachusetts and your new
Speaker, John McCormack, Members of the 87th Congress, ladies and
gentlemen:

This week we begin anew our joint and separate efforts to build the
American future. But, sadly, we build without a man who linked a long past
with the present and looked strongly to the future. "Mister Sam" Rayburn is
gone. Neither this House nor the Nation is the same without him.

Members of the Congress, the Constitution makes us not rivals for power but
partners for progress. We are all trustees for the American people,
custodians of the American heritage. It is my task to report the State of
the Union--to improve it is the task of us all.

In the past year, I have traveled not only across our own land but to
other lands--to the North and the South, and across the seas. And I have
found--as I am sure you have, in your travels--that people everywhere,
in spite of occasional disappointments, look to us--not to our wealth or
power, but to the splendor of our ideals. For our Nation is commissioned
by history to be either an observer of freedom's failure or the cause of
its success. Our overriding obligation in the months ahead is to fulfill
the world's hopes by fulfilling our own faith.

I. STRENGTHENING THE ECONOMY

That task must begin at home. For if we cannot fulfill our own ideals here,
we cannot expect others to accept them. And when the youngest child alive
today has grown to the cares of manhood, our position in the world will
be determined first of all by what provisions we make today--for his
education, his health, and his opportunities for a good home and a good
job and a good life.

At home, we began the year in the valley of recession--we completed it on
the high road of recovery and growth. With the help of new Congressionally
approved or Administratively increased stimulants to our economy, the
number of major surplus labor areas has declined from 101 to 60;
non-agricultural employment has increased by more than a million jobs; and
the average factory work-week has risen to well over 40 hours. At year's
end the economy which Mr. Khrushchev once called a "stumbling horse" was
racing to new records in consumer spending, labor income, and industrial
production.

We are gratified--but we are not satisfied. Too many unemployed are still
looking for the blessings of prosperity. As those who leave our schools and
farms demand new jobs, automation takes old jobs away. To expand our growth
and job opportunities, I urge on the Congress three measures:

(1) First, the Manpower Training and Development Act, to stop the waste of
able-bodied men and women who want to work, but whose only skill has been
replaced by a machine, or moved with a mill, or shut down with a mine;

(2) Second, the Youth Employment Opportunities Act, to help train and place
not only the one million young Americans who are both out of school and out
of work, but the twenty-six million young Americans entering the labor
market in this decade; and

(3) Third, the 8 percent tax credit for investment in machinery and
equipment, which, combined with planned revisions of depreciation
allowances, will spur our modernization, our growth, and our ability to
compete abroad.

Moreover--pleasant as it may be to bask in the warmth of recovery--let us
not forget that we have suffered three recessions in the last 7 years. The
time to repair the roof is when the sun is shining--by filling three basic
gaps in our anti-recession protection. We need:

(1) First, Presidential stand-by authority, subject to Congressional veto,
to adjust personal income tax rates downward within a specified range and
time, to slow down an economic decline before it has dragged us all down;

(2) Second, Presidential stand-by authority, upon a given rise in the rate
of unemployment, to accelerate Federal and federally-aided capital
improvement programs; and

(3) Third, a permanent strengthening of our unemployment compensation
system--to maintain for our fellow citizens searching for a job who cannot
find it, their purchasing power and their living standards without constant
resort--as we have seen in recent years by the Congress and the
Administrations--to temporary supplements.

If we enact this six-part program, we can show the whole world that a free
economy need not be an unstable economy--that a free system need not leave
men unemployed--and that a free society is not only the most productive but
the most stable form of organization yet fashioned by man.

II. FIGHTING INFLATION

But recession is only one enemy of a free economy--inflation is another.
Last year, 1961, despite rising production and demand, consumer prices held
almost steady--and wholesale prices declined. This is the best record of
overall price stability of any comparable period of recovery since the end
of World War II.

Inflation too often follows in the shadow of growth--while price stability
is made easy by stagnation or controls. But we mean to maintain both
stability and growth in a climate of freedom.

Our first line of defense against inflation is the good sense and public
spirit of business and labor--keeping their total increases in wages and
profits in step with productivity. There is no single statistical test to
guide each company and each union. But I strongly urge them--for their
country's interest, and for their own--to apply the test of the public
interest to these transactions.

Within this same framework of growth and wage-price stability:

--This administration has helped keep our economy competitive by widening
the access of small business to credit and Government contracts, and by
stepping up the drive against monopoly, price-fixing, and racketeering;

--We will submit a Federal Pay Reform bill aimed at giving our classified,
postal, and other employees new pay scales more comparable to those of
private industry;

--We are holding the fiscal 1962 budget deficit far below the level
incurred after the last recession in 1958; and, finally,

--I am submitting for fiscal 1963 a balanced Federal Budget.

This is a joint responsibility, requiring Congressional cooperation on
appropriations, and on three sources of income in particular:

(1) First, an increase in postal rates, to end the postal deficit;

(2) Second, passage of the tax reforms previously urged, to remove
unwarranted tax preferences, and to apply to dividends and to interest the
same withholding requirements we have long applied to wages; and

(3) Third, extension of the present excise and corporation tax rates,
except for those changes--which will be recommended in a message--affecting
transportation.

III. GETTING AMERICA MOVING

But a stronger nation and economy require more than a balanced Budget. They
require progress in those programs that spur our growth and fortify our
strength.

CITIES

A strong America depends on its cities--America's glory, and sometimes
America's shame. To substitute sunlight for congestion and progress for
decay, we have stepped up existing urban renewal and housing programs, and
launched new ones--redoubled the attack on water pollution--speeded aid to
airports, hospitals, highways, and our declining mass transit systems--and
secured new weapons to combat organized crime, racketeering, and youth
delinquency, assisted by the coordinated and hard-hitting efforts of our
investigative services: the FBI, the Internal Revenue, the Bureau of
Narcotics, and many others. We shall need further anti-crime, mass transit,
and transportation legislation--and new tools to fight air pollution. And
with all this effort under way, both equity and common sense require that
our nation's urban areas--containing three-fourths of our population--sit
as equals at the Cabinet table. I urge a new Department of Urban Affairs
and Housing.

AGRICULTURE AND RESOURCES

A strong America also depends on its farms and natural resources. American
farmers took heart in 1961--from a billion dollar rise in farm income--and
from a hopeful start on reducing the farm surpluses. But we are still
operating under a patchwork accumulation of old laws, which cost us $1
billion a year in CCC carrying charges alone, yet fail to halt rural
poverty or boost farm earnings.

Our task is to master and turn to fully fruitful ends the magnificent
productivity of our farms and farmers. The revolution on our own
countryside stands in the sharpest contrast to the repeated farm failures
of the Communist nations and is a source of pride to us all. Since 1950 our
agricultural output per man-hour has actually doubled! Without new,
realistic measures, it will someday swamp our farmers and our taxpayers in
a national scandal or a farm depression.

I will, therefore, submit to the Congress a new comprehensive farm
program--tailored to fit the use of our land and the supplies of each crop
to the long-range needs of the sixties--and designed to prevent chaos in
the sixties with a program of common sense.

We also need for the sixties--if we are to bequeath our full national
estate to our heirs--a new long-range conservation and recreation
program--expansion of our superb national parks and forests--preservation
of our authentic wilderness areas--new starts on water and power projects
as our population steadily increases--and expanded REA generation and
transmission loans.

CIVIL RIGHTS

But America stands for progress in human rights as well as economic
affairs, and a strong America requires the assurance of full and equal
rights to all its citizens, of any race or of any color. This
Administration has shown as never before how much could be done through the
full use of Executive powers--through the enforcement of laws already
passed by the Congress--through persuasion, negotiation, and litigation, to
secure the constitutional rights of all: the right to vote, the right to
travel without hindrance across State lines, and the right to free public
education.

I issued last March a comprehensive order to guarantee the right to equal
employment opportunity in all Federal agencies and contractors. The Vice
President's Committee thus created has done much, including the voluntary
"Plans for Progress" which, in all sections of the country, are achieving a
quiet but striking success in opening up to all races new professional,
supervisory, and other job opportunities.

But there is much more to be done--by the Executive, by the courts, and by
the Congress. Among the bills now pending before you, on which the
executive departments will comment in detail, are appropriate methods of
strengthening these basic rights which have our full support. The right to
vote, for example, should no longer be denied through such arbitrary
devices on a local level, sometimes abused, such as literacy tests and poll
taxes. As we approach the 100th anniversary, next January, of the
Emancipation Proclamation, let the acts of every branch of the
Government--and every citizen--portray that "righteousness does exalt a
nation."

HEALTH AND WELFARE

Finally, a strong America cannot neglect the aspirations of its
citizens--the welfare of the needy, the health care of the elderly, the
education of the young. For we are not developing the Nation's wealth for
its own sake. Wealth is the means--and people are the ends. All our
material riches will avail us little if we do not use them to expand the
opportunities of our people.

Last year, we improved the diet of needy people--provided more hot lunches
and fresh milk to school children--built more college dormitories--and, for
the elderly, expanded private housing, nursing homes, health services, and
social security. But we have just begun.

To help those least fortunate of all, I am recommending a new public
welfare program, stressing services instead of support, rehabilitation
instead of relief, and training for useful work instead of prolonged
dependency.

To relieve the critical shortage of doctors and dentists--and this is a
matter which should concern us all--and expand research, I urge action to
aid medical and dental colleges and scholarships and to establish new
National Institutes of Health.

To take advantage of modern vaccination achievements, I am proposing a mass
immunization program, aimed at the virtual elimination of such ancient
enemies of our children as polio, diphtheria, whooping cough, and tetanus.

To protect our consumers from the careless and the unscrupulous, I shall
recommend improvements in the Food and Drug laws--strengthening inspection
and standards, halting unsafe and worthless products, preventing misleading
labels, and cracking down on the illicit sale of habit-forming drugs.

But in matters of health, no piece of unfinished business is more important
or more urgent than the enactment under the social security system of
health insurance for the aged.

For our older citizens have longer and more frequent illnesses, higher
hospital and medical bills and too little income to pay them. Private
health insurance helps very few--for its cost is high and its coverage
limited. Public welfare cannot help those too proud to seek relief but
hard-pressed to pay their own bills. Nor can their children or
grandchildren always sacrifice their own health budgets to meet this
constant drain.

Social security has long helped to meet the hardships of retirement, death,
and disability. I now urge that its coverage be extended without further
delay to provide health insurance for the elderly.

EDUCATION

Equally important to our strength is the quality of our education. Eight
million adult Americans are classified as functionally illiterate. This is
a disturbing figure--reflected in Selective Service rejection
rates--reflected in welfare rolls and crime rates. And I shall recommend
plans for a massive attack to end this adult illiteracy.

I shall also recommend bills to improve educational quality, to stimulate
the arts, and, at the college level, to provide Federal loans for the
construction of academic facilities and Federally financed scholarships.

If this Nation is to grow in wisdom and strength, then every able high
school graduate should have the opportunity to develop his talents. Yet
nearly half lack either the funds or the facilities to attend college.
Enrollments are going to double in our colleges in the short space of 10
years. The annual cost per student is skyrocketing to astronomical
levels--now averaging $1,650 a year, although almost half of our families
earn less than $5,000. They cannot afford such costs--but this Nation
cannot afford to maintain its military power and neglect its brainpower.

But excellence in education must begin at the elementary level. I sent to
the Congress last year a proposal for Federal aid to public school
construction and teachers' salaries. I believe that bill, which passed the
Senate and received House Committee approval, offered the minimum amount
required by our needs and--in terms of across-the-board aid--the maximum
scope permitted by our Constitution. I therefore see no reason to weaken or
withdraw that bill: and I urge its passage at this session.

"Civilization," said H. G. Wells, "is a race between education and
catastrophe." It is up to you in this Congress to determine the winner of
that race.

These are not unrelated measures addressed to specific gaps or grievances
in our national life. They are the pattern of our intentions and the
foundation of our hopes. "I believe in democracy," said Woodrow Wilson,
"because it releases the energy of every human being." The dynamic of
democracy is the power and the purpose of the individual, and the policy of
this administration is to give to the individual the opportunity to realize
his own highest possibilities.

Our program is to open to all the opportunity for steady and productive
employment, to remove from all the handicap of arbitrary or irrational
exclusion, to offer to all the facilities for education and health and
welfare, to make society the servant of the individual and the individual
the source of progress, and thus to realize for all the full promise of
American life.

IV. OUR GOALS ABROAD

All of these efforts at home give meaning to our efforts abroad. Since the
close of the Second World War, a global civil war has divided and tormented
mankind. But it is not our military might, or our higher standard of
living, that has most distinguished us from our adversaries. It is our
belief that the state is the servant of the citizen and not his master.

This basic clash of ideas and wills is but one of the forces reshaping our
globe--swept as it is by the tides of hope and fear, by crises in the
headlines today that become mere footnotes tomorrow. Both the successes and
the setbacks of the past year remain on our agenda of unfinished business.
For every apparent blessing contains the seeds of danger--every area of
trouble gives out a ray of hope--and the one unchangeable certainty is that
nothing is certain or unchangeable.

Yet our basic goal remains the same: a peaceful world community of free and
independent states--free to choose their own future and their own system,
so long as it does not threaten the freedom of others.

Some may choose forms and ways that we would not choose for ourselves--but
it is not for us that they are choosing. We can welcome diversity--the
Communists cannot. For we offer a world of choice--they offer the world of
coercion. And the way of the past shows clearly that freedom, not coercion,
is the wave of the future. At times our goal has been obscured by crisis or
endangered by conflict--but it draws sustenance from five basic sources of
strength:

--the moral and physical strength of the United States;

--the united strength of the Atlantic Community;

--the regional strength of our Hemispheric relations;

--the creative strength of our efforts in the new and developing nations;
and

--the peace-keeping strength of the United Nations.

V. OUR MILITARY STRENGTH

Our moral and physical strength begins at home as already discussed. But it
includes our military strength as well. So long as fanaticism and fear
brood over the affairs of men, we must arm to deter others from
aggression.

In the past 12 months our military posture has steadily improved. We
increased the previous defense budget by 15 percent--not in the expectation
of war but for the preservation of peace. We more than doubled our
acquisition rate of Polaris submarines--we doubled the production capacity
for Minuteman missiles--and increased by 50 percent the number of manned
bombers standing ready on a 15 minute alert. This year the combined force
levels planned under our new Defense budget--including nearly three hundred
additional Polaris and Minuteman missiles--have been precisely calculated
to insure the continuing strength of our nuclear deterrent.

But our strength may be tested at many levels. We intend to have at all
times the capacity to resist non-nuclear or limited attacks--as a
complement to our nuclear capacity, not as a substitute. We have rejected
any all-or-nothing posture which would leave no choice but inglorious
retreat or unlimited retaliation.

Thus we have doubled the number of ready combat divisions in the Army's
strategic reserve--increased our troops in Europe--built up the
Marines--added new sealift and airlift capacity--modernized our weapons and
ammunition--expanded our anti-guerrilla forces--and increased the active
fleet by more than 70 vessels and our tactical air forces by nearly a dozen
wings.

Because we needed to reach this higher long-term level of readiness more
quickly, 155,000 members of the Reserve and National Guard were activated
under the Act of this Congress. Some disruptions and distress were
inevitable. But the overwhelming majority bear their burdens--and their
Nation's burdens--with admirable and traditional devotion.

In the coming year, our reserve programs will be revised--two Army
Divisions will, I hope, replace those Guard Divisions on duty--and
substantial other increases will boost our Air Force fighter units, the
procurement of equipment, and our continental defense and warning efforts.
The Nation's first serious civil defense shelter program is under way,
identifying, marking, and stocking 50 million spaces; and I urge your
approval of Federal incentives for the construction of public fall-out
shelters in schools and hospitals and similar centers.

VI. THE UNITED NATIONS

But arms alone are not enough to keep the peace--it must be kept by men.
Our instrument and our hope is the United Nations--and I see little merit
in the impatience of those who would abandon this imperfect world
instrument because they dislike our imperfect world. For the troubles of
a world organization merely reflect the troubles of the world itself. And
if the organization is weakened, these troubles can only increase. We may
not always agree with every detailed action taken by every officer of the
United Nations, or with every voting majority. But as an institution, it
should have in the future, as it has had in the past since its inception,
no stronger or more faithful member than the United States of America.

In 1961 the peace-keeping strength of the United Nations was reinforced.
And those who preferred or predicted its demise, envisioning a troika in
the seat of Hammarskjold--or Red China inside the Assembly--have seen
instead a new vigor, under a new Secretary General and a fully independent
Secretariat. In making plans for a new forum and principles on disarmament
--for peace-keeping in outer space--for a decade of development effort--the
UN fulfilled its Charter's lofty aim.

Eighteen months ago the tangled and turbulent Congo presented the UN with
its gravest challenge. The prospect was one of chaos--or certain big-power
confrontation, with all of its hazards and all of its risks, to us and to
others. Today the hopes have improved for peaceful conciliation within a
united Congo. This is the objective of our policy in this important area.

No policeman is universally popular--particularly when he uses his stick to
restore law and order on his beat. Those members who are willing to
contribute their votes and their views--but very little else--have created
a serious deficit by refusing to pay their share of special UN assessments.
Yet they do pay their annual assessments to retain their votes--and a new
UN Bond issue, financing special operations for the next 18 months, is to
be repaid with interest from these regular assessments. This is clearly in
our interest. It will not only keep the UN solvent, but require all voting
members to pay their fair share of its activities. Our share of special
operations has long been much higher than our share of the annual
assessment--and the bond issue will in effect reduce our disproportionate
obligation, and for these reasons, I am urging Congress to approve our
participation.

With the approval of this Congress, we have undertaken in the past year a
great new effort in outer space. Our aim is not simply to be first on the
moon, any more than Charles Lindbergh's real aim was to be the first to
Paris. His aim was to develop the techniques of our own country and other
countries in the field of air and the atmosphere, and our objective in
making this effort, which we hope will place one of our citizens on the
moon, is to develop in a new frontier of science, commerce and cooperation,
the position of the United States and the Free World.

This Nation belongs among the first to explore it, and among the first--if
not the first--we shall be. We are offering our know-how and our
cooperation to the United Nations. Our satellites will soon be providing
other nations with improved weather observations. And I shall soon send to
the Congress a measure to govern the financing and operation of an
International Communications Satellite system, in a manner consistent with
the public interest and our foreign policy.

But peace in space will help us naught once peace on earth is gone. World
order will be secured only when the whole world has laid down these weapons
which seem to offer us present security but threaten the future survival of
the human race. That armistice day seems very far away. The vast resources
of this planet are being devoted more and more to the means of destroying,
instead of enriching, human life.

But the world was not meant to be a prison in which man awaits his
execution. Nor has mankind survived the tests and trials of thousands of
years to surrender everything--including its existence--now. This Nation
has the will and the faith to make a supreme effort to break the log jam
on disarmament and nuclear tests--and we will persist until we prevail,
until the rule of law has replaced the ever dangerous use of force.

VII. LATIN AMERICA

I turn now to a prospect of great promise: our Hemispheric relations. The
Alliance for Progress is being rapidly transformed from proposal to
program. Last month in Latin America I saw for myself the quickening of
hope, the revival of confidence, the new trust in our country--among
workers and farmers as well as diplomats. We have pledged our help in
speeding their economic, educational, and social progress. The Latin
American Republics have in turn pledged a new and strenuous effort of
self-help and self-reform.

To support this historic undertaking, I am proposing--under the authority
contained in the bills of the last session of the Congress--a special
long-term Alliance for Progress fund of $3 billion. Combined with our Food
for Peace, Export-Import Bank, and other resources, this will provide more
than $1 billion a year in new support for the Alliance. In addition, we
have increased twelve-fold our Spanish and Portuguese language broadcasting
in Latin America, and improved Hemispheric trade and defense. And while
the blight of communism has been increasingly exposed and isolated in the
Americas, liberty has scored a gain. The people of the Dominican Republic,
with our firm encouragement and help, and those of our sister Republics of
this Hemisphere, are safely passing through the treacherous course from
dictatorship through disorder towards democracy.

VIII. THE NEW AND DEVELOPING NATIONS

Our efforts to help other new or developing nations, and to strengthen
their stand for freedom, have also made progress. A newly unified Agency
for International Development is reorienting our foreign assistance to
emphasize long-term development loans instead of grants, more economic aid
instead of military, individual plans to meet the individual needs of the
nations, and new standards on what they must do to marshal their own
resources.

A newly conceived Peace Corps is winning friends and helping people in
fourteen countries--supplying trained and dedicated young men and women, to
give these new nations a hand in building a society, and a glimpse of the
best that is in our country. If there is a problem here, it is that we
cannot supply the spontaneous and mounting demand.

A newly-expanded Food for Peace Program is feeding the hungry of many
lands with the abundance of our productive farms--providing lunches for
children in school, wages for economic development, relief for the victims
of flood and famine, and a better diet for millions whose daily bread is
their chief concern.

These programs help people; and, by helping people, they help freedom. The
views of their governments may sometimes be very different from ours--but
events in Africa, the Middle East, and Eastern Europe teach us never to
write off any nation as lost to the Communists. That is the lesson of our
time. We support the independence of those newer or weaker states whose
history, geography, economy or lack of power impels them to remain outside
"entangling alliances"--as we did for more than a century. For the
independence of nations is a bar to the Communists' "grand design"--it is
the basis of our own.

In the past year, for example, we have urged a neutral and independent
Laos--regained there a common policy with our major allies--and insisted
that a cease-fire precede negotiations. While a workable formula for
supervising its independence is still to be achieved, both the spread
of war--which might have involved this country also--and a Communist
occupation have thus far been prevented.

A satisfactory settlement in Laos would also help to achieve and safeguard
the peace in Viet-Nam--where the foe is increasing his tactics of
terror--where our own efforts have been stepped up--and where the local
government has initiated new programs and reforms to broaden the base of
resistance. The systematic aggression now bleeding that country is not a
"war of liberation"--for Viet-Nam is already free. It is a war of attempted
subjugation--and it will be resisted.

IX. THE ATLANTIC COMMUNITY

Finally, the united strength of the Atlantic Community has flourished in
the last year under severe tests. NATO has increased both the number and
the readiness of its air, ground, and naval units--both its nuclear and
non-nuclear capabilities. Even greater efforts by all its members are still
required. Nevertheless our unity of purpose and will has been, I believe,
immeasurably strengthened.

The threat to the brave city of Berlin remains. In these last 6 months the
Allies have made it unmistakably clear that our presence in Berlin, our
free access thereto, and the freedom of two million West Berliners would
not be surrendered either to force or through appeasement--and to maintain
those rights and obligations, we are prepared to talk, when appropriate,
and to fight, if necessary. Every member of NATO stands with us in a common
commitment to preserve this symbol of free man's will to remain free.

I cannot now predict the course of future negotiations over Berlin. I can
only say that we are sparing no honorable effort to find a peaceful and
mutually acceptable resolution of this problem. I believe such a resolution
can be found, and with it an improvement in our relations with the Soviet
Union, if only the leaders in the Kremlin will recognize the basic rights
and interests involved, and the interest of all mankind in peace.

But the Atlantic Community is no longer concerned with purely military
aims. As its common undertakings grow at an ever-increasing pace, we are,
and increasingly will be, partners in aid, trade, defense, diplomacy, and
monetary affairs.

The emergence of the new Europe is being matched by the emergence of new
ties across the Atlantic. It is a matter of undramatic daily cooperation in
hundreds of workaday tasks: of currencies kept in effective relation, of
development loans meshed together, of standardized weapons, and concerted
diplomatic positions. The Atlantic Community grows, not like a volcanic
mountain, by one mighty explosion, but like a coral reef, from the
accumulating activity of all.

Thus, we in the free world are moving steadily toward unity and
cooperation, in the teeth of that old Bolshevik prophecy, and at the very
time when extraordinary rumbles of discord can be heard across the Iron
Curtain. It is not free societies which bear within them the seeds of
inevitable disunity.

X. OUR BALANCE OF PAYMENTS

On one special problem, of great concern to our friends, and to us, I am
proud to give the Congress an encouraging report. Our efforts to safeguard
the dollar are progressing. In the 11 months preceding last February 1, we
suffered a net loss of nearly $2 billion in gold. In the 11 months that
followed, the loss was just over half a billion dollars. And our deficit in
our basic transactions with the rest of the world--trade, defense, foreign
aid, and capital, excluding volatile short-term flows--has been reduced
from $2 billion for 1960 to about one-third that amount for 1961.
Speculative fever against the dollar is ending--and confidence in the
dollar has been restored.

We did not--and could not--achieve these gains through import restrictions,
troop withdrawals, exchange controls, dollar devaluation or choking off
domestic recovery. We acted not in panic but in perspective. But the
problem is not yet solved. Persistently large deficits would endanger our
economic growth and our military and defense commitments abroad. Our goal
must be a reasonable equilibrium in our balance of payments. With the
cooperation of the Congress, business, labor, and our major allies, that
goal can be reached.

We shall continue to attract foreign tourists and investments to our
shores, to seek increased military purchases here by our allies, to
maximize foreign aid procurement from American firms, to urge increased aid
from other fortunate nations to the less fortunate, to seek tax laws which
do not favor investment in other industrialized nations or tax havens, and
to urge coordination of allied fiscal and monetary policies so as to
discourage large and disturbing capital movements.

TRADE

Above all, if we are to pay for our commitments abroad, we must expand our
exports. Our businessmen must be export conscious and export competitive.
Our tax policies must spur modernization of our plants--our wage and price
gains must be consistent with productivity to hold the line on prices--our
export credit and promotion campaigns for American industries must continue
to expand.

But the greatest challenge of all is posed by the growth of the European
Common Market. Assuming the accession of the United Kingdom, there will
arise across the Atlantic a trading partner behind a single external tariff
similar to ours with an economy which nearly equals our own. Will we in
this country adapt our thinking to these new prospects and patterns--or
will we wait until events have passed us by?

This is the year to decide. The Reciprocal Trade Act is expiring. We need a
new law--a wholly new approach--a bold new instrument of American trade
policy. Our decision could well affect the unity of the West, the course of
the Cold War, and the economic growth of our Nation for a generation to
come.

If we move decisively, our factories and farms can increase their sales to
their richest, fastest-growing market. Our exports will increase. Our
balance of payments position will improve. And we will have forged across
the Atlantic a trading partnership with vast resources for freedom.

If, on the other hand, we hang back in deference to local economic
pressures, we will find ourselves cut off from our major allies.
Industries--and I believe this is most vital--industries will move their
plants and jobs and capital inside the walls of the Common Market, and
jobs, therefore, will be lost here in the United States if they cannot
otherwise compete for its consumers. Our farm surpluses--our balance of
trade, as you all know, to Europe, the Common Market, in farm products, is
nearly three or four to one in our favor, amounting to one of the best
earners of dollars in our balance of payments structure, and without
entrance to this Market, without the ability to enter it, our farm
surpluses will pile up in the Middle West, tobacco in the South, and other
commodities, which have gone through Western Europe for 15 years. Our
balance of payments position will worsen. Our consumers will lack a wider
choice of goods at lower prices. And millions of American workers--whose
jobs depend on the sale or the transportation or the distribution of
exports or imports, or whose jobs will be endangered by the movement of our
capital to Europe, or whose jobs can be maintained only in an expanding
economy--these millions of workers in your home States and mine will see
their real interests sacrificed.

Members of the Congress: The United States did not rise to greatness by
waiting for others to lead. This Nation is the world's foremost
manufacturer, farmer, banker, consumer, and exporter. The Common Market is
moving ahead at an economic growth rate twice ours. The Communist economic
offensive is under way. The opportunity is ours--the initiative is up to
us--and I believe that 1962 is the time.

To seize that initiative, I shall shortly send to the Congress a new
five-year Trade Expansion Action, far-reaching in scope but designed with
great care to make certain that its benefits to our people far outweigh any
risks. The bill will permit the gradual elimination of tariffs here in the
United States and in the Common Market on those items in which we together
supply 80 percent of the world's trade--mostly items in which our own
ability to compete is demonstrated by the fact that we sell abroad, in
these items, substantially more than we import. This step will make it
possible for our major industries to compete with their counterparts in
Western Europe for access to European consumers.

On other goods the bill will permit a gradual reduction of duties up to 50
percent--permitting bargaining by major categories--and provide for
appropriate and tested forms of assistance to firms and employees adjusting
to import competition. We are not neglecting the safeguards provided by
peril points, an escape clause, or the National Security Amendment. Nor are
we abandoning our non-European friends or our traditional "most-favored
nation" principle. On the contrary, the bill will provide new encouragement
for their sale of tropical agricultural products, so important to our
friends in Latin America, who have long depended upon the European market,
who now find themselves faced with new challenges which we must join with
them in overcoming.

Concessions, in this bargaining, must of course be reciprocal, not
unilateral. The Common Market will not fulfill its own high promise unless
its outside tariff walls are low. The dangers of restriction or timidity in
our own policy have counterparts for our friends in Europe. For together we
face a common challenge: to enlarge the prosperity of free men
everywhere--to build in partnership a new trading community in which all
free nations may gain from the productive energy of free competitive
effort.

These various elements in our foreign policy lead, as I have said, to a
single goal--the goal of a peaceful world of free and independent states.
This is our guide for the present and our vision for the future--a free
community of nations, independent but interdependent, uniting north and
south, east and west, in one great family of man, outgrowing and
transcending the hates and fears that rend our age.

We will not reach that goal today, or tomorrow. We may not reach it in our
own lifetime. But the quest is the greatest adventure of our century. We
sometimes chafe at the burden of our obligations, the complexity of our
decisions, the agony of our choices. But there is no comfort or security
for us in evasion, no solution in abdication, no relief in
irresponsibility.

A year ago, in assuming the tasks of the Presidency, I said that few
generations, in all history, had been granted the role of being the great
defender of freedom in its hour of maximum danger. This is our good
fortune; and I welcome it now as I did a year ago. For it is the fate of
this generation--of you in the Congress and of me as President--to live
with a struggle we did not start, in a world we did not make. But the
pressures of life are not always distributed by choice. And while no
nation has ever faced such a challenge, no nation has ever been so ready
to seize the burden and the glory of freedom.

And in this high endeavor, may God watch over the United States of America.

***

State of the Union Address
John F. Kennedy
January 14, 1963

Mr. Vice President, Mr. Speaker, Members of the 88th Congress:

I congratulate you all--not merely on your electoral victory but on your
selected role in history. For you and I are privileged to serve the great
Republic in what could be the most decisive decade in its long history. The
choices we make, for good or ill, may well shape the state of the Union for
generations yet to come.

Little more than 100 weeks ago I assumed the office of President of the
United States. In seeking the help of the Congress and our countrymen, I
pledged no easy answers. I pledged--and asked--only toil and dedication.
These the Congress and the people have given in good measure. And today,
having witnessed in recent months a heightened respect for our national
purpose and power--having seen the courageous calm of a united people in
a perilous hour--and having observed a steady improvement in the
opportunities and well-being of our citizens--I can report to you that
the state of this old but youthful Union, in the 175th year of its life,
is good.

In the world beyond our borders, steady progress has been made in building
a world of order. The people of West Berlin remain both free and secure. A
settlement, though still precarious, has been reached in Laos. The
spearpoint of aggression has been blunted in Viet-Nam. The end of agony may
be in sight in the Congo. The doctrine of troika is dead. And, while danger
continues, a deadly threat has been removed in Cuba.

At home, the recession is behind us. Well over a million more men and women
are working today than were working 2 years ago. The average factory
work week is once again more than 40 hours; our industries are turning out
more goods than ever before; and more than half of the manufacturing
capacity that lay silent and wasted 100 weeks ago is humming with
activity.

In short, both at home and abroad, there may now be a temptation to relax.
For the road has been long, the burden heavy, and the pace consistently
urgent.

But we cannot be satisfied to rest here. This is the side of the hill, not
the top. The mere absence of war is not peace. The mere absence of
recession is not growth. We have made a beginning--but we have only begun.

Now the time has come to make the most of our gains--to translate the
renewal of our national strength into the achievement of our national
purpose.

                                   I.

America has enjoyed 22 months of uninterrupted economic recovery. But
recovery is not enough. If we are to prevail in the long run, we must
expand the long-run strength of our economy. We must move along the path to
a higher rate of growth and full employment.

For this would mean tens of billions of dollars more each year in
production, profits, wages, and public revenues. It would mean an end to
the persistent slack which has kept our unemployment at or above 5 percent
for 61 out of the past 62 months--and an end to the growing pressures for
such restrictive measures as the 35-hour week, which alone could increase
hourly labor costs by as much as 14 percent, start a new wage-price spiral
of inflation, and undercut our efforts to compete with other nations.

To achieve these greater gains, one step, above all, is essential--the
enactment this year of a substantial reduction and revision in Federal
income taxes.

For it is increasingly clear--to those in Government, business, and labor
who are responsible for our economy's success--that our obsolete tax system
exerts too heavy a drag on private purchasing power, profits, and
employment. Designed to check inflation in earlier years, it now checks
growth instead. It discourages extra effort and risk. It distorts the use
of resources. It invites recurrent recessions, depresses our Federal
revenues, and causes chronic budget deficits.

Now, when the inflationary pressures of the war and the post-war years no
longer threaten, and the dollar commands new respect--now, when no military
crisis strains our resources--now is the time to act. We cannot afford to
be timid or slow. For this is the most urgent task confronting the Congress
in 1963.

In an early message, I shall propose a permanent reduction in tax rates
which will lower liabilities by $13.5 billion. Of this, $11 billion results
from reducing individual tax rates, which now range between 20 and 91
percent, to a more sensible range of 14 to 65 percent, with a split in the
present first bracket. Two and one-half billion dollars results from
reducing corporate tax rates, from 52 percent--which gives the Government
today a majority interest in profits--to the permanent pre-Korean level of
47 percent. This is in addition to the more than $2 billion cut in
corporate tax liabilities resulting from last year's investment credit and
depreciation reform.

To achieve this reduction within the limits of a manageable budgetary
deficit, I urge: first, that these cuts be phased over 3 calendar years,
beginning in 1963 with a cut of some $6 billion at annual rates; second,
that these reductions be coupled with selected structural changes,
beginning in 1964, which will broaden the tax base, end unfair or
unnecessary preferences, remove or lighten certain hardships, and in the
net offset some $3.5 billion of the revenue loss; and third, that budgetary
receipts at the outset be increased by $1.5 billion a year, without any
change in tax liabilities, by gradually shifting the tax payments of large
corporations to a more current time schedule. This combined program, by
increasing the amount of our national income, will in time result in still
higher Federal revenues. It is a fiscally responsible program--the surest
and the soundest way of achieving in time a balanced budget in a balanced
full employment economy.

This net reduction in tax liabilities of $10 billion will increase the
purchasing power of American families and business enterprises in every tax
bracket, with greatest increase going to our low-income consumers. It will,
in addition, encourage the initiative and risk-taking on which our free
system depends--induce more investment, production, and capacity use--help
provide the 2 million new jobs we need every year--and reinforce the
American principle of additional reward for additional effort.

I do not say that a measure for tax reduction and reform is the only way to
achieve these goals.

No doubt a massive increase in Federal spending could also create jobs
and growth, but in today's setting, private consumers, employers, and
investors should be given a full opportunity first.

No doubt a temporary tax cut could provide a spur to our economy--but a
long-run problem compels a long-run solution.

No doubt a reduction in either individual or corporation taxes alone
would be of great help--but corporations need customers and job seekers
need jobs.

No doubt tax reduction without reform would sound simpler and more
attractive to many--but our growth is also hampered by a host of tax
inequities and special preferences which have distorted the flow of
investment.

And finally, there are no doubt some who would prefer to put off a tax
cut in the hope that ultimately an end to the cold war would make possible
an equivalent cut in expenditures--but that end is not in view and to wait
for it would be costly and self-defeating.

In submitting a tax program which will, of course, temporarily increase the
deficit but can ultimately end it--and in recognition of the need to
control expenditures--I will shortly submit a fiscal 1964 administrative
budget which, while allowing for needed rises in defense, space, and fixed
interest charges, holds total expenditures for all other purposes below
this year's level.

This requires the reduction or postponement of many desirable programs, the
absorption of a large part of last year's Federal pay raise through
personnel and other economies, the termination of certain installations and
projects, and the substitution in several programs of private for public
credit. But I am convinced that the enactment this year of tax reduction
and tax reform overshadows all other domestic problems in this Congress.
For we cannot for long lead the cause of peace and freedom, if we ever
cease to set the pace here at home.

                                  II.

Tax reduction alone, however, is not enough to strengthen our society, to
provide opportunities for the four million Americans who are born every
year, to improve the lives of 32 million Americans who live on the
outskirts of poverty.

The quality of American life must keep pace with the quantity of American
goods.

This country cannot afford to be materially rich and spiritually poor.

Therefore, by holding down the budgetary cost of existing programs to keep
within the limitations I have set, it is both possible and imperative to
adopt other new measures that we cannot afford to postpone.

These measures are based on a series of fundamental premises, grouped under
four related headings:

First, we need to strengthen our Nation by investing in our youth.

The future of any country which is dependent upon the will and wisdom of
its citizens is damaged, and irreparably damaged, whenever any of its
children is not educated to the full extent of his talent, from grade
school through graduate school. Today, an estimated 4 out of every 10
students in the 5th grade will not even finish high school--and that is a
waste we cannot afford.

In addition, there is no reason why one million young Americans, out of
school and out of work, should all remain unwanted and often untrained on
our city streets when their energies can be put to good use.

Finally, the overseas success of our Peace Corps volunteers, most of them
young men and women carrying skills and ideas to needy people, suggests the
merit of a similar corps serving our own community needs: in mental
hospitals, on Indian reservations, in centers for the aged or for young
delinquents, in schools for the illiterate or the handicapped. As the
idealism of our youth has served world peace, so can it serve the domestic
tranquility.

Second, we need to strengthen our Nation by safeguarding its health.

Our working men and women, instead of being forced to beg for help from
public charity once they are old and ill, should start contributing now to
their own retirement health program through the Social Security System.

Moreover, all our miracles of medical research will count for little if
we cannot reverse the growing nationwide shortage of doctors, dentists, and
nurses, and the widespread shortages of nursing homes and modern urban
hospital facilities. Merely to keep the present ratio of doctors and
dentists from declining any further, we must over the next 10 years
increase the capacity of our medical schools by 50 percent and our dental
schools by 100 percent.

Finally, and of deep concern, I believe that the abandonment of the
mentally ill and the mentally retarded to the grim mercy of custodial
institutions too often inflicts on them and on their families a needless
cruelty which this Nation should not endure. The incidence of mental
retardation in this country is three times as high as that of Sweden, for
example--and that figure can and must be reduced.

Third, we need to strengthen our Nation by protecting the basic rights of
its citizens.

The right to competent counsel must be assured to every man accused of
crime in Federal court, regardless of his means.

And the most precious and powerful right in the world, the right to vote
in a free American election, must not be denied to any citizen on grounds
of his race or color. I wish that all qualified Americans permitted to vote
were willing to vote, but surely in this centennial year of Emancipation
all those who are willing to vote should always be permitted.

Fourth, we need to strengthen our Nation by making the best and the most
economical use of its resources and facilities.

Our economic health depends on healthy transportation arteries; and I
believe the way to a more modern, economical choice of national
transportation service is through increased competition and decreased
regulation. Local mass transit, faring even worse, is as essential a
community service as hospitals and highways. Nearly three-fourths of our
citizens live in urban areas, which occupy only 2 percent of our land--and
if local transit is to survive and relieve the congestion of these cities,
it needs Federal stimulation and assistance.

Next, this Government is in the storage and stockpile business to the
melancholy tune of more than $16 billion. We must continue to support farm
income, but we should not pile more farm surpluses on top of the $7.5
billion we already own. We must maintain a stockpile of strategic
materials, but the $8.5 billion we have acquired--for reasons both good and
bad--is much more than we need; and we should be empowered to dispose of
the excess in ways which will not cause market disruption.

Finally, our already overcrowded national parks and recreation areas will
have twice as many visitors 10 years from now as they do today. If we do
not plan today for the future growth of these and other great natural
assets--not only parks and forests but wildlife and wilderness preserves,
and water projects of all kinds--our children and their children will be
poorer in every sense of the word.

These are not domestic concerns alone. For upon our achievement of greater
vitality and strength here at home hang our fate and future in the world:
our ability to sustain and supply the security of free men and nations, our
ability to command their respect for our leadership, our ability to expand
our trade without threat to our balance of payments, and our ability to
adjust to the changing demands of cold war competition and challenge.

We shall be judged more by what we do at home than by what we preach
abroad. Nothing we could do to help the developing countries would help
them half as much as a booming U.S. economy. And nothing our opponents
could do to encourage their own ambitions would encourage them half as much
as a chronic, lagging U.S. economy. These domestic tasks do not divert
energy from our security--they provide the very foundation for freedom's
survival and success.

                                 III.

Turning to the world outside, it was only a few years ago--in Southeast
Asia, Africa, Eastern Europe, Latin America, even outer space--that
communism sought to convey the image of a unified, confident, and expanding
empire, closing in on a sluggish America and a free world in disarray. But
few people would hold to that picture today.

In these past months we have reaffirmed the scientific and military
superiority of freedom. We have doubled our efforts in space, to assure us
of being first in the future. We have undertaken the most far-reaching
defense improvements in the peacetime history of this country. And we have
maintained the frontiers of freedom from Viet-Nam to West Berlin.

But complacency or self-congratulation can imperil our security as much as
the weapons of tyranny. A moment of pause is not a promise of peace.
Dangerous problems remain from Cuba to the South China Sea. The world's
prognosis prescribes, in short, not a year's vacation for us, but a year of
obligation and opportunity.

Four special avenues of opportunity stand out: the Atlantic Alliance, the
developing nations, the new Sino-Soviet difficulties, and the search for
worldwide peace.

                                 IV.

First, how fares the grand alliance? Free Europe is entering into a new
phase of its long and brilliant history. The era of colonial expansion has
passed; the era of national rivalries is fading; and a new era of
interdependence and unity is taking shape. Defying the old prophecies of
Marx, consenting to what no conqueror could ever compel, the free nations
of Europe are moving toward a unity of purpose and power and policy in
every sphere of activity.

For 17 years this movement has had our consistent support, both political
and economic. Far from resenting the new Europe, we regard her as a welcome
partner, not a rival. For the road to world peace and freedom is still
long, and there are burdens which only full partners can share--in
supporting the common defense, in expanding world trade, in aligning our
balance of payments, in aiding the emergent nations, in concerting
political and economic policies, and in welcoming to our common effort
other industrialized nations, notably Japan, whose remarkable economic and
political development of the 1950's permits it now to play on the world
scene a major constructive role.

No doubt differences of opinion will continue to get more attention than
agreements on action, as Europe moves from independence to more formal
interdependence. But these are honest differences among honorable
associates--more real and frequent, in fact, among our Western European
allies than between them and the United States. For the unity of freedom
has never relied on uniformity of opinion. But the basic agreement of this
alliance on fundamental issues continues.

The first task of the alliance remains the common defense. Last month Prime
Minister Macmillan and I laid plans for a new stage in our long cooperative
effort, one which aims to assist in the wider task of framing a common
nuclear defense for the whole alliance.

The Nassau agreement recognizes that the security of the West is
indivisible, and so must be our defense. But it also recognizes that this
is an alliance of proud and sovereign nations, and works best when we do
not forget it. It recognizes further that the nuclear defense of the West
is not a matter for the present nuclear powers alone--that France will be
such a power in the future--and that ways must be found without increasing
the hazards of nuclear diffusion, to increase the role of our other
partners in planning, manning, and directing a truly multilateral nuclear
force within an increasingly intimate NATO alliance. Finally, the Nassau
agreement recognizes that nuclear defense is not enough, that the agreed
NATO levels of conventional strength must be met, and that the alliance
cannot afford to be in a position of having to answer every threat with
nuclear weapons or nothing.

We remain too near the Nassau decisions, and too far from their full
realization, to know their place in history. But I believe that, for the
first time, the door is open for the nuclear defense of the alliance to
become a source of confidence, instead of a cause of contention.

The next most pressing concern of the alliance is our common economic goals
of trade and growth. This Nation continues to be concerned about its
balance-of-payments deficit, which, despite its decline, remains a stubborn
and troublesome problem. We believe, moreover, that closer economic ties
among all free nations are essential to prosperity and peace. And neither
we nor the members of the European Common Market are so affluent that we
can long afford to shelter high cost farms or factories from the winds of
foreign competition, or to restrict the channels of trade with other
nations of the free world. If the Common Market should move toward
protectionism and restrictionism, it would undermine its own basic
principles. This Government means to use the authority conferred on it last
year by the Congress to encourage trade expansion on both sides of the
Atlantic and around the world.

                                   V.

Second, what of the developing and non-aligned nations? They were shocked
by the Soviets' sudden and secret attempt to transform Cuba into a nuclear
striking base--and by Communist China's arrogant invasion of India. They
have been reassured by our prompt assistance to India, by our support
through the United Nations of the Congo's unification, by our patient
search for disarmament, and by the improvement in our treatment of citizens
and visitors whose skins do not happen to be white. And as the older
colonialism recedes, and the neo-colonialism of the Communist powers stands
out more starkly than ever, they realize more clearly that the issue in the
world struggle is not communism versus capitalism, but coercion versus free
choice.

They are beginning to realize that the longing for independence is the same
the world over, whether it is the independence of West Berlin or Viet-Nam.
They are beginning to realize that such independence runs athwart all
Communist ambitions but is in keeping with our own--and that our approach
to their diverse needs is resilient and resourceful, while the Communists
are still relying on ancient doctrines and dogmas.

Nevertheless it is hard for any nation to focus on an external or
subversive threat to its independence when its energies are drained in
daily combat with the forces of poverty and despair. It makes little sense
for us to assail, in speeches and resolutions, the horrors of communism, to
spend $50 billion a year to prevent its military advance--and then to
begrudge spending, largely on American products, less than one-tenth of
that amount to help other nations strengthen their independence and cure
the social chaos in which communism has always thrived.

I am proud--and I think most Americans are proud--of a mutual defense and
assistance program, evolved with bipartisan support in three
administrations, which has, with all its recognized problems, contributed
to the fact that not a single one of the nearly fifty U.N. members to gain
independence since the Second World War has succumbed to Communist
control.

I am proud of a program that has helped to arm and feed and clothe millions
of people who live on the front lines of freedom.

I am especially proud that this country has put forward for the 60's a vast
cooperative effort to achieve economic growth and social progress
throughout the Americas--the Alliance for Progress.

I do not underestimate the difficulties that we face in this mutual effort
among our close neighbors, but the free states of this hemisphere, working
in close collaboration, have begun to make this alliance a living reality.
Today it is feeding one out of every four school age children in Latin
America an extra food ration from our farm surplus. It has distributed 1.5
million school books and is building 17,000 classrooms. It has helped
resettle tens of thousands of farm families on land they can call their
own. It is stimulating our good neighbors to more self-help and
self-reform--fiscal, social, institutional, and land reforms. It is
bringing new housing and hope, new health and dignity, to millions who were
forgotten. The men and women of this hemisphere know that the alliance
cannot succeed if it is only another name for United States handouts--that
it can succeed only as the Latin American nations themselves devote their
best effort to fulfilling its goals.

This story is the same in Africa, in the Middle East, and in Asia. Wherever
nations are willing to help themselves, we stand ready to help them build
new bulwarks of freedom. We are not purchasing votes for the cold war; we
have gone to the aid of imperiled nations, neutrals and allies alike. What
we do ask--and all that we ask--is that our help be used to best advantage,
and that their own efforts not be diverted by needless quarrels with other
independent nations.

Despite all its past achievements, the continued progress of the Mutual
Assistance Program requires a persistent discontent with present
performance. We have been reorganizing this program to make it a more
effective, efficient instrument--and that process will continue this year.

But free world development will still be an uphill struggle. Government aid
can only supplement the role of private investment, trade expansion,
commodity stabilization, and, above all, internal self-improvement. The
processes of growth are gradual--bearing fruit in a decade, not a day. Our
successes will be neither quick nor dramatic. But if these programs were
ever to be ended, our failures in a dozen countries would be sudden and
certain.

Neither money nor technical assistance, however, can be our only weapon
against poverty. In the end, the crucial effort is one of purpose,
requiring the fuel of finance but also a torch of idealism. And nothing
carries the spirit of this American idealism more effectively to the far
corners of the earth than the American Peace Corps.

A year ago, less than 900 Peace Corps volunteers were on the job. A year
from now they will number more than 9,000--men and women, aged 18 to 79,
willing to give 2 years of their lives to helping people in other lands.

There are, in fact, nearly a million Americans serving their country and
the cause of freedom in overseas posts, a record no other people can match.
Surely those of us who stay at home should be glad to help indirectly; by
supporting our aid programs; .by opening our doors to foreign visitors and
diplomats and students; and by proving, day by day, by deed as well as
word, that we are a just and generous people.

                                  VI.

Third, what comfort can we take from the increasing strains and tensions
within the Communist bloc? Here hope must be tempered with caution. For the
Soviet-Chinese disagreement is over means, not ends. A dispute over how
best to bury the free world is no grounds for Western rejoicing.

Nevertheless, while a strain is not a fracture, it is clear that the forces
of diversity are at work inside the Communist camp, despite all the iron
disciplines of regimentation and all the iron dogmatisms of ideology. Marx
is proven wrong once again: for it is the closed Communist societies, not
the free and open societies which carry within themselves the seeds of
internal disintegration.

The disarray of the Communist empire has been heightened by two other
formidable forces. One is the historical force of nationalism--and the
yearning of all men to be free. The other is the gross inefficiency of
their economies. For a closed society is not open to ideas of progress--and
a police state finds that it cannot command the grain to grow.

New nations asked to choose between two competing systems need only compare
conditions in East and West Germany, Eastern and Western Europe, North and
South Viet-Nam. They need only compare the disillusionment of Communist
Cuba with the promise of the Alliance for Progress. And all the world knows
that no successful system builds a wall to keep its people in and freedom
out--and the wall of shame dividing Berlin is a symbol of Communist
failure.

                                 VII.

Finally, what can we do to move from the present pause toward enduring
peace? Again I would counsel caution. I foresee no spectacular reversal in
Communist methods or goals. But if all these trends and developments can
persuade the Soviet Union to walk the path of peace, then let her know that
all free nations will journey with her. But until that choice is made, and
until the world can develop a reliable system of international security,
the free peoples have no choice but to keep their arms nearby.

This country, therefore, continues to require the best defense in the
world--a defense which is suited to the sixties. This means, unfortunately,
a rising defense budget--for there is no substitute for adequate defense,
and no "bargain basement" way of achieving it. It means the expenditure of
more than $15 billion this year on nuclear weapons systems alone, a sum
which is about equal to the combined defense budgets of our European
Allies.

But it also means improved air and missile defenses, improved civil
defense, a strengthened anti-guerrilla capacity and, of prime importance,
more powerful and flexible non-nuclear forces. For threats of massive
retaliation may not deter piecemeal aggression--and a line of destroyers in
a quarantine, or a division of well-equipped men on a border, may be more
useful to our real security than the multiplication of awesome weapons
beyond all rational need.

But our commitment to national safety is not a commitment to expand our
military establishment indefinitely. We do not dismiss disarmament as
merely an idle dream. For we believe that, in the end, it is the only way
to assure the security of all without impairing the interests of any. Nor
do we mistake honorable negotiation for appeasement. While we shall never
weary in the defense of freedom, neither shall we ever abandon the pursuit
of peace.

In this quest, the United Nations requires our full and continued support.
Its value in serving the cause of peace has been shown anew in its role in
the West New Guinea settlement, in its use as a forum for the Cuban crisis,
and in its task of unification in the Congo. Today the United Nations is
primarily the protector of the small and the weak, and a safety valve for
the strong. Tomorrow it can form the framework for a world of law--a world
in which no nation dictates the destiny of another, and in which the vast
resources now devoted to destructive means will serve constructive ends.

In short, let our adversaries choose. If they choose peaceful competition,
they shall have it. If they come to realize that their ambitions cannot
succeed--if they see their "wars of liberation" and subversion will
ultimately fail--if they recognize that there is more security in accepting
inspection than in permitting new nations to master the black arts of
nuclear war--and if they are willing to turn their energies, as we are, to
the great unfinished tasks of our own peoples--then, surely, the areas of
agreement can be very wide indeed: a clear understanding about Berlin,
stability in Southeast Asia, an end to nuclear testing, new checks on
surprise or accidental attack, and, ultimately, general and complete
disarmament.

                                 VIII.

For we seek not the worldwide victory of one nation or system but a
worldwide victory of man. The modern globe is too small, its weapons are
too destructive, and its disorders are too contagious to permit any other
kind of victory.

To achieve this end, the United States will continue to spend a greater
portion of its national production than any other people in the free world.
For 15 years no other free nation has demanded so much of itself. Through
hot wars and cold, through recession and prosperity, through the ages of
the atom and outer space, the American people have never faltered and their
faith has never flagged. If at times our actions seem to make life
difficult for others, it is only because history has made life difficult
for us all.

But difficult days need not be dark. I think these are proud and memorable
days in the cause of peace and freedom. We are proud, for example, of Major
Rudolf Anderson who gave his life over the island of Cuba. We salute
Specialist James Allen Johnson who died on the border of South Korea. We
pay honor to Sergeant Gerald Pendell who was killed in Viet-Nam. They are
among the many who in this century, far from home, have died for our
country. Our task now, and the task of all Americans is to live up to their
commitment.

My friends: I close on a note of hope. We are not lulled by the momentary
calm of the sea or the somewhat clearer skies above. We know the turbulence
that lies below, and the storms that are beyond the horizon this year. But
now the winds of change appear to be blowing more strongly than ever, in
the world of communism as well as our own. For 175 years we have sailed
with those winds at our back, and with the tides of human freedom in our
favor. We steer our ship with hope, as Thomas Jefferson said, "leaving Fear
astern."

Today we still welcome those winds of change--and we have every reason to
believe that our tide is running strong. With thanks to Almighty God for
seeing us through a perilous passage, we ask His help anew in guiding the
"Good Ship Union."



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