Constantly we seek new ways to make more effective our contribution to this system of collective security.  Recently I have asked a Committee of eminent Americans of both parties to re-appraise our military assistance programs and the relative emphasis which should be placed on military and economic aid.

I am hopeful that preliminary recommendations of this Committee will be available in time to assist in shaping the Mutual Security program for the coming fiscal year.

Any survey of the free world’s defense structure cannot fail to impart a feeling of regret that so much of our effort and resources must be devoted to armaments.  At Geneva and elsewhere we continue to seek technical and other agreements that may help to open up, with some promise, the issues of international disarmament.  America will never give up the hope that eventually all nations can, with mutual confidence, drastically reduce these non-productive expenditures.  II.

The material foundation of our national safety is a strong and expanding economy.  This we have—­and this we must maintain.  Only with such an economy can we be secure and simultaneously provide for the well-being of our people.

A year ago the nation was experiencing a decline in employment and output.  Today that recession is fading into history, and this without gigantic, hastily-improvised public works projects or untimely tax reductions.  A healthy and vigorous recovery has been under way since last May.  New homes are being built at the highest rate in several years.  Retail sales are at peak levels.  Personal income is at an all-time high.

The marked forward thrust of our economy reaffirms our confidence in competitive enterprise.  But—­clearly—­wisdom and prudence in both the public and private sectors of the economy are always necessary.

Our outlook is this:  1960 commitments for our armed forces, the Atomic Energy Commission and Military Assistance exceed 47 billion dollars.  In the foreseeable future they are not likely to be significantly lower.  With an annual population increase of three million, other governmental costs are bound to mount.

After we have provided wisely for our military strength, we must judge how to allocate our remaining government resources most effectively to promote our well-being and economic growth.

Federal programs that will benefit all citizens are moving forward.

Next year we will be spending increased amounts on health programs; on Federal assistance to science and education; on the development of the nation’s water resources; on the renewal of urban areas; and on our vast system of Federal-aid highways.

Each of these additional outlays is being made necessary by the surging growth of America.

Let me illustrate.  Responsive to this growth, Federal grants and long term loans to assist 14 major types of capital improvements in our cities will total over 2 billion dollars in 1960—­double the expenditure of two years ago.  The major responsibility for development in these fields rests in the localities, even though the Federal Government will continue to do its proper part in meeting the genuine needs of a burgeoning population.