Mr. President, Mr. Speaker, Members of the Congress: First, I extend cordial greetings to the 84th Congress. We shall have much to do together; I am sure that we shall get it done -- and, that we shall do it in harmony and good will. At the outset, I believe it would be well to remind ourselves of this great fundamental in our national life: our common belief that every human being is divinely endowed with dignity and worth and inalienable rights.

This faith, with its corollary -- that to grow and flourish people must be free -- shapes the interests and aspirations of every American. From this deep faith have evolved three main purposes of our Federal Government: First, to maintain justice and freedom among ourselves and to champion them for others so that we may work effectively for enduring peace;

Second, to help keep our economy vigorous and expanding, thus sustaining our international strength and assuring better jobs, better living, better opportunities for every citizen; And third, to concern ourselves with the human problems of our people so that every American may have the opportunity to lead a healthy, productive and rewarding life.

Foremost among these broad purposes of government is our support of freedom, justice and peace. It is of the utmost importance, that each of us understand the true nature of the struggle now taking place in the world. It is not a struggle merely of economic theories, or of forms of government, or of military power.

At issue is the true nature of man. Either man is the creature whom the Psalmist described as "a little lower than the angels," crowned with glory and honor, holding "dominion over the works" of his Creator; or man is a soulless, animated machine to be enslaved, used and consumed by the state for its own glorification.

It is, therefore, a struggle which goes to the roots of the human spirit, and its shadow falls across the long sweep of man's destiny. This prize, so precious, so fraught with ultimate meaning, is the true object of the contending forces in the world. In the past year, there has been progress justifying hope, both for continuing peace and for the ultimate rule of freedom and justice in the world.

Free nations are collectively stronger than at any time in recent years. Just as nations of this Hemisphere, in the historic Caracas and Rio conferences, have closed ranks against imperialistic Communism and strengthened their economic ties, so free nations elsewhere have forged new bonds of unity. Recent agreements between Turkey and Pakistan have laid a foundation for increased strength in the Middle East.

With our understanding support, Egypt and Britain, Yugoslavia and Italy, Britain and Iran have resolved dangerous differences. The security of the Mediterranean has been enhanced by an alliance among Greece, Turkey and Yugoslavia. Agreements in Western Europe have paved the way for unity to replace past divisions which have undermined Europe's economic and military vitality.

The defense of the West appears likely at last to include a free, democratic Germany participating as an equal in the councils of NATO. In Asia and the Pacific, the pending Manila Pact supplements our treaties with Australia, New Zealand, the Philippines, Korea and Japan and our prospective treaty with the Republic of China.

These pacts stand as solemn warning that future military aggression and subversion against the free nations of Asia will meet united response. The Pacific Charter, also adopted at Manila, is a milestone in the development of human freedom and self-government in the Pacific area. Under the auspices of the United Nations, there is promise of progress in our country's plan for the peaceful use of atomic energy.

Finally, today the world is at peace. It is, to be sure, an secure peace. Yet all humanity finds hope in the simple fact that for an appreciable time there has been no active major battlefield on earth. This same fact inspires us to work all the more effectively with other nations for the well-being, the freedom, the dignity, of every human on earth.

These developments are heartening indeed, and we are hopeful of continuing progress. But sobering problems remain. The massive military machines and ambitions of the Soviet-Communist bloc still create uneasiness in the world. All of us are aware of the continuing reliance of the Soviet Communists on military force, of the power of their weapons, of their present resistance to realistic armament limitation, and of their continuing effort to dominate or intimidate free nations on their periphery.

Their steadily growing power includes an increasing strength in nuclear weapons. This power, combined with the proclaimed intentions of the Communist leaders to communize the world, is the threat confronting us today. To protect our nations and our peoples from the catastrophe of a nuclear holocaust, free nations must maintain countervailing military power to persuade the Communists of the futility of seeking their ends through aggression.

If Communist rulers understand that America's response to aggression will be swift and decisive -- that never shall we buy peace at the expense of honor or faith -- they will be powerfully deterred from launching a military venture engulfing their own peoples and many others in disaster. This, of course, is merely world stalemate.

But in this stalemate each of us may and must exercise his high duty to strive in every honorable way for enduring peace. The military threat is but one menace to our freedom and security. We must not only deter aggression; we must also frustrate the effort of Communists to gain their goals by subversion.

To this end, free nations must maintain and reinforce their cohesion, their internal security, their political and economic vitality, and their faith in freedom. In such a world, America's course is dear: We must tirelessly labor to make the peace more just and durable. We must strengthen the collective defense under the United Nations Charter and gird ourselves with sufficient military strength and productive capacity to discourage resort to war and protect our nation's vital interests.

We must continue to support and strengthen the United Nations. At this very moment, by vote of the United Nations General Assembly, its Secretary-General is in Communist China on a mission of deepest concern to all Americans: seeking the release of our never-to-be-forgotten American aviators and all other United Nations prisoners wrongfully detained by the Communist regime.

We must also encourage the efforts being made in the United Nations to limit armaments and to harness the atom to peaceful rise. We must expand international trade and investment and assist friendly nations whose own best efforts are still insufficient to provide the strength essential to the security of the free world.

We must be willing to use the processes of negotiation whenever they will advance the cause of just and secure peace to which the United States and other free nations are dedicated. In respect to all these matters, we must, through a vigorous information program, keep the peoples of the world truthfully advised of our actions and purposes.

This problem has been attacked with new vigor during the past months. I urge that the Congress give its earnest consideration to the great advantages that can accrue to our country through the successful operations of this program. We must also carry forward our educational exchange program. This sharing of knowledge and experience between our citizens and those of free countries is a powerful factor in the development and maintenance of true partnership among free peoples.

To advance these many efforts, the Congress must act in this session on appropriations, legislation, and treaties. Today I shall mention especially our foreign economic and military programs. The recent economic progress in many free nations has been most heartening. The productivity of labor and the production of goods and services are increasing in ever-widening areas.

There is a growing will to improve the living standards of all men. This progress is important to all our people. It promises us allies who are strong and self-reliant; it promises a growing world market for the products of our mines, our factories, and our farms. But only through steady effort can we hope to continue this progress.

Barriers still impede trade and the flow of capital needed to develop each nation's human and material resources. Wise reduction of these barriers is a long-term objective of our foreign economic policy -- a policy of an evolutionary and selective nature, assuring broad benefits to our own and other peoples.

We must gradually reduce certain tariff obstacles to trade. These actions should, of course, be accompanied by a similar lowering of trade barriers by other nations, so that we may move steadily toward greater economic advantage for all. We must further simplify customs administration and procedures. We must facilitate the flow of capital and continue technical assistance, both directly and through the United Nations, to less developed countries to strengthen their independence and raise their living standards.

Many another step must be taken in and among the nations of the free world to release forces of private initiative. In our own nation, these forces have brought strength and prosperity; once released, they will generate rising incomes in these other countries with which to buy the products of American industry, labor and agriculture.

On January 10, by special message, I shall submit specific recommendations for carrying forward the legislative phases of our foreign economic policy. Our many efforts to build a better world include the maintenance of our military strength. This is a vast undertaking. Major national security programs consume two-thirds of the entire Federal budget.

Over four million Americans -- servicemen and civilians -- are on the rolls of the defense establishment. During the past two years, by eliminating duplication and overstaffing, by improved procurement and inventory controls, and by concentrating on the essentials, many billions of dollars have been saved in our defense activities.

I should like to mention certain fundamentals underlying this vast program. First, a realistic limitation of armaments and an enduring, just peace remain our national goals; we maintain powerful military forces because there is no present alternative -- forces designed for deterrent and defensive purposes alone but able instantly to strike back with destructive power in response to an attack.

Second, we must stay alert to the fact that undue reliance on one weapon or preparation for only one kind of warfare simply invites an enemy to resort to another. We must, therefore, keep in our armed forces balance and flexibility adequate for our purposes and objectives. Third, to keep our armed forces abreast of the advances of science, our military planning must be flexible enough to utilize the new weapons and techniques which flow ever more speedily from our research and development programs.

The forthcoming military budget therefore emphasizes modern airpower in the Air Force, Navy and Marine Corps and increases the emphasis on new weapons, especially those of rapid and destructive striking power. It assures the maintenance of effective, retaliatory force as the principal deterrent to overt aggression.

It accelerates the continental defense program and the build-up of ready military reserve forces. It continues a vigorous program of stockpiling strategic and critical materials and strengthening our mobilization base. The budget also contemplates the strategic concentration of our strength through redeployment of certain forces.

It provides for reduction of forces in certain categories and their expansion in others, to fit them to the military realities of our time. These emphases in our defense planning have been made at my personal direction after long and thoughtful study. In my judgment, they will give our nation a defense accurately adjusted to the national need.

Fourth, pending a world agreement on armament limitation, we must continue to improve and expand our supplies of nuclear weapons for our land, naval and air forces, while, at the same time, continuing our encouraging progress in the peaceful use of atomic power. And fifth, in the administration of these costly programs, we must demand the utmost in efficiency and ingenuity.

We must assure our people not only of adequate protection but also of a defense that can be carried forward from year to year until the threat of aggression has disappeared. To help maintain this kind of armed strength and improve its efficiency, I must urge the enactment of several important measures in this session.

The first concerns the selective service act which expires next June 30th. For the foreseeable future, our standing forces must remain much larger than voluntary methods can sustain. We must, therefore, extend the statutory authority to induct men for two years of military service. The second kind of measure concerns the rapid turnover of our most experienced servicemen.

This process seriously weakens the combat readiness of our armed forces and is exorbitantly expensive. To encourage more trained servicemen to remain in uniform, I shall, on the thirteenth of this month, propose a number of measures to increase the attractions of a military career. These measures will include more adequate medical care for dependents, survivors' benefits, more and better housing, and selective adjustments in military pay and other allowances.

And third -- also on January 13 -- I shall present a program to rebuild and strengthen the civilian components of our armed forces. This is a comprehensive program, designed to make better use of our manpower of military age. Because it will go far in assuring fair and equitable participation in military training and service, it is of particular importance to our combat veterans.

In keeping with the historic military policy of our Republic, this program is designed to build and maintain powerful civilian reserves immediately capable of effective military service in an emergency in lieu of maintaining active duty forces in excess of the nation's immediate need. Maintenance of an effective defense requires continuance of our aggressive attack on subversion at home.

In this effort we have, in the past two years, made excellent progress. FBI investigations have been powerfully reinforced by a new Internal Security Division in the Department of Justice; the security activities of the Immigration and Naturalization Service have been revitalized; an improved and strengthened security system is in effect throughout the government;

The Department of Justice and the FBI have been armed with effective new legal weapons forged by the 83rd Congress.

We shall continue to ferret out and to destroy Communist subversion. We shall, in the process, carefully preserve our traditions and the basic rights of our citizens. Our civil defense program is also a key element in the protection of our country. We are developing cooperative methods with State Governors, Mayors, and voluntary citizen groups, as well as among Federal agencies, in building the civil defense organization.

Its significance in time of war is obvious; its swift assistance in disaster areas last year proved its importance in time of peace. An industry capable of rapid expansion and essential materials and facilities swiftly available in time of emergency are indispensable to our defense. I urge, therefore, a two-year extension of the Defense Production Act and Title II of the First War Powers Act of 1941. These are cornerstones of our program for the development and maintenance of an adequate mobilization base.

At this point, I should like to make this additional observation. Our quest for peace and freedom necessarily presumes that we who hold positions of public trust must rise above self and section -- that we must subordinate to the general good our partisan, our personal pride and prejudice. Tirelessly, with united purpose, we must fortify the material and spiritual foundations of this land of freedom and of free nations throughout the world.

As never before, there is need for unhesitating cooperation among the branches of our government. At this time the executive and legislative branches are under the management of different political parties. This fact places both parties on trial before the American people. In less perilous days of the past, division of governmental responsibility among our great parties has produced a paralyzing indecision.

We must not let this happen in our time. We must avoid a paralysis of the will for peace and international security. In the traditionally bipartisan areas -- military security and foreign relations -- I can report to you that I have already, with the leaders of this Congress, expressed assurances of unreserved cooperation.

Yet, the strength of our country requires more than mere maintenance of military strength and success in foreign affairs; these vital matters are in turn dependent upon concerted and vigorous action in a number of supporting programs. I say, therefore, to the 84th Congress: In all areas basic to the strength of America, there will be -- to the extent I can insure them -- cooperative, constructive relations between the Executive and Legislative Branches of this government.

Let the general good be our yardstick on every great issue of our time. Our efforts to defend our freedom and to secure a just peace are, of course, inseparable from the second great purpose of our government: to help maintain a strong, growing economy -- an economy vigorous and free, in which there are ever-increasing opportunities, just rewards for effort, and a stable prosperity that is widely shared.

In the past two years, many important governmental Actions helped our economy adjust to conditions of peace; these and other actions created a climate for renewed economic growth. Controls were removed from wages, prices and materials. Tax revisions encouraged increased private spending and employment. Federal expenditures were sharply reduced, making possible a record tax cut.

These actions, together with flexible monetary and debt management policies, helped to halt inflation and stabilize the value of the dollar. A program of cooperation and partnership in resource development was begun. Social security and unemployment insurance laws were broadened and strengthened. New laws started the long process of balancing farm production with farm markets.

Expanded shipbuilding and stockpiling programs strengthened key sectors of the economy, while improving our mobilization base. A comprehensive new housing law brought impressive progress in an area fundamental to our economic strength and closed loopholes in the old laws permitting dishonest manipulation.