We have just concluded another prosperous year.  Our output was once more the greatest in the nation’s history.  In the latter part of the year, some decline in employment and output occurred, following the exceptionally rapid expansion of recent years.  In a free economy, reflecting as it does the independent judgments of millions of people, growth typically moves forward unevenly.  But the basic forces of growth remain unimpaired.  There are solid grounds for confidence that economic growth will be resumed without an extended interruption.  Moreover, the Federal government, constantly alert to signs of weakening in any part of our economy, always stands ready, with its full power, to take any appropriate further action to promote renewed business expansion.

If our history teaches us anything, it is this lesson:  so far as the economic potential of our nation is concerned, the believers in the future of America have always been the realists.  I count myself as one of this company.

Our long-range problem, then, is not the stamina of our enormous engine of production.  Our problem is to make sure that we use these vast economic forces confidently and creatively, not only in direct military defense efforts, but likewise in our foreign policy, through such activities as mutual economic aid and foreign trade.

In much the same way, we have tremendous potential resources on other non-military fronts to help in countering the Soviet threat:  education, science, research, and, not least, the ideas and principles by which we live.  And in all these cases the task ahead is to bring these resources more sharply to bear upon the new tasks of security and peace in a swiftly-changing world.  IV.

There are many items in the Administration’s program, of a kind frequently included in a State of the Union Message, with which I am not dealing today.  They are important to us and to our prosperity.  But I am reserving them for treatment in separate communications because of my purpose today of speaking only about matters bearing directly upon our security and peace.

I now place before you an outline of action designed to focus our resources upon the two tasks of security and peace.

In this special category I list eight items requiring action.  They are not merely desirable.  They are imperative.

1.  Defense reorganization

The first need is to assure ourselves that military organization facilitates rather than hinders the functioning of the military establishment in maintaining the security of the nation.

Since World War II, the purpose of achieving maximum organizational efficiency in a modern defense establishment has several times occasioned action by the Congress and by the Executive.

The advent of revolutionary new devices, bringing with them the problem of overall continental defense, creates new difficulties, reminiscent of those attending the advent of the airplane half a century ago.