United States civil defense and nonmilitary defense capacity has been greatly strengthened and these activities have been consolidated in one Federal agency.

The defense forces of our Allies now number five million men, several thousand combatant ships, and over 25,000 aircraft.  Programs to strengthen these allies have been consistently supported by the Administration.  U.S. military assistance goes almost exclusively to friendly nations on the rim of the communist world.  This American contribution to nations who have the will to defend their freedom, but insufficient means, should be vigorously continued.  Combined with our Allies, the free world now has a far stronger shield than we could provide alone.

Since 1953, our defense policy has been based on the assumption that the international situation would require heavy defense expenditures for an indefinite period to come, probably for years.  In this protracted struggle, good management dictates that we resist overspending as resolutely as we oppose under-spending.  Every dollar uselessly spent on military mechanisms decreases our total strength and, therefore, our security.  We must not return to the “crash-program” psychology of the past when each new feint by the Communists was responded to in panic.  The “bomber gap” of several years ago was always a fiction, and the “missile gap” shows every sign of being the same.

The nation can ill afford to abandon a national policy which provides for a fully adequate and steady level of effort, designed for the long pull; a fast adjustment to new scientific and technological advances; a balanced force of such strength as to deter general war, to effectively meet local situations and to retaliate to attack and destroy the attacker; and a strengthened system of free world collective security.

THE ECONOMY

The expanding American economy passed the half-trillion dollar mark in gross national product early in 1960.  The Nation’s output of goods and services is now nearly 25 percent higher than in 1952.

In 1959, the average American family had an income of $6,520, 15 percent higher in dollars of constant buying power than in 1952, and the real wages of American factory workers have risen 20 percent during the past eight years.  These facts reflect the rising standard of individual and family well-being enjoyed by Americans.

Our Nation benefits also from a remarkable improvement in general industrial peace through strengthened processes of free collective bargaining.  Time lost since 1952 because of strikes has been half that lost in the eight years prior to that date.  Legislation now requires that union members have the opportunity for full participation in the affairs of their unions.  The Administration supported the Landrum-Griffin Act, which I believe is greatly helpful to the vast bulk of American Labor and its leaders, and also is a major step in getting racketeers and gangsters out of labor-management affairs.