(18) Legislation to take care of the stock piling of materials in which the United States is naturally deficient—­as recommended by me on September 6, 1945.

(19) Enactment of Federal airport legislation-as recommended by me on September 6, 1945.

(20) Legislation repealing the Johnson Act on foreign loans—­as recommended by me on September 6, 1945.

(21) Legislation for the development of the Great Lakes-St. Lawrence River Basin-as recommended by me on October 3, 1945.

4.  Policies in specific fields

(a) Extension of Price Control Act.

Today inflation is our greatest immediate domestic problem.  So far the fight against inflation has been waged successfully.  Since May 1943, following President Roosevelt’s “hold the line” order and in the face of the greatest pressures which this country has ever seen, the cost of living index has risen only three percent.  Wholesale prices in this same period have been held to an increase of two and one-half percent.

This record has been made possible by the vigorous efforts of the agencies responsible for this program.  But their efforts would have been fruitless if they had not had the solid support of the great masses of our people.  The Congress is to be congratulated for its role in providing the legislation under which this work has been carried out.

On VJ-day it was clear to all thinking people that the danger of inflation was by no means over.  Many of us can remember vividly our disastrous experience following World War I. Then the very restricted wartime controls were lifted too quickly, and as a result prices and rents moved more rapidly upward.  In the year and a half following the armistice, rents, food, and clothing shot to higher and still higher levels.

When the inevitable crash occurred less than two years after the end of the war, business bankruptcies were widespread.  Profits were wiped out.  Inventory losses amounted to billions of dollars.  Farm income dropped by one-half.  Factory pay rolls dropped 40 percent, and nearly one-fifth of all our industrial workers were walking the streets in search of jobs.  This was a grim greeting, indeed, to offer our veterans who had just returned from overseas.

When I addressed the Congress in September, I emphasized that we must continue to hold the price line until the production of goods caught up with the tremendous demands.  Since then we have seen demonstrated the strength of the inflationary pressures which we have to face.

Retail sales in the closing months of 1945 ran 12 percent above the previous peak for that season, which came in 1944.  Prices throughout the entire economy have been pressing hard against the price ceilings.  The prices of real estate, which cannot now be controlled under the law, are rising rapidly.  Commercial rents are not included in the present price control law and, where they are not controlled by State law, have been increasing, causing difficulties to many businessmen.