APRIL 6, 1948
LONDON, Monday—I'm very glad President Truman vetoed the tax-reduction bill which Congress later passed. When the inevitable occurs and our revenue has to be increased to meet the demands of our present situation, the responsibility will lie squarely on the shoulders of the Republican-dominated Congress, not on the shoulders of the Democratic Administration.
We as a nation demobilized too quickly after the war and got rid of all our restrictions too fast. Because our own country had not been devastated, we assumed that one could fight the greatest war in history, a war which left a great part of the world in ruins, and still return to prewar conditions in the shortest possible time. Unfortunately, one never returns to prewar conditions. One has to go forward into the future, facing new conditions. In this particular case, the war made the world smaller and we now have such a close relationship with the rest of the world that we cannot ignore the situations in which other nations find themselves.
The organization of the United Nations was accepted by many of us as a guarantee that peace existed even though we had not yet made peace treaties with our enemies and had not yet tried making arrangements with our wartime allies which must be made to insure peace. We went ahead feeling that peace was secure simply because we had created some machinery through which we could work. Now we have found that, if we hope to preserve peace, we must rebuild our military strength; and that we must make agreements with other nations along economic lines for our mutual advantage, and must use our economic strength to arm our political policy.
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In all this going forward, we do not find many of the old rules applicable. We did away with rationing and price control because we assumed that we were going to meet the needs of our people through production and that the old law of supply and demand would take care of price control. Unfortunately, this did not work, because we failed to realize that our economic problems today are not simply domestic problems but must be considered in connection with our foreign policy, just as our military plans must be considered in that light.
Though the word "planning" seems to terrify many industrialists, it is inevitable that, where military and economic policies must be tied to a country's foreign policy, many domestic policies will be affected and planning will be necessary. We are heading for more planning and therefore there is more necessity for world understanding on a broad scale among all our citizens.
To me the passage of the tax-reduction bill means that our representatives in Congress do not understand the implication of the new position of the United States in the world. They may truthfully represent the sentiment of their constituents, but they are not doing their duty as educators of their constituents. They have the opportunity and the obligation to know the facts about their country's relation to the rest of the world, and if they do not inform the people whom they represent, they are failing in their duty to the nation. It is unrealistic to cut taxes and at the same time increase expenditures which have to be met through taxation.
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To pay taxes for increased military strength and for building up the economy of other democracies so that they may eventually add to the strength of free nations, is a form of insurance. We hope, by so doing, to prevent war. We hope gradually to see conditions improve for people throughout the world, because contented people have a stake in peace—they lose too much by going to war.
This will take time, however, and it will require discipline and sacrifice on the part of the people of the United States. Perhaps above everything else, it will require an understanding of our present position and of our objectives.
Many people feel that those objectives have been somewhat uncertain and not very clearly understood even on the highest levels. That is not surprising, for our role in world affairs is a new one. I must say it gives me pause to find so many people here in Great Britain taking it for granted that the initiative in world affairs lies in our hands. Quite casually, one British woman remarked that of course the burdens which once belonged exclusively to Great Britain are now in the hands of the United States.