How Strong Is America?


By MERRYLE STANLEY RUKEYSER, Economic Commentator for International News Service and the Hearst newspapers and author of "Financial Security in a Changing World"

Delivered over Station WABC and the Columbia Broadcasting System, February 7, 1941

Vital Speeches of the Day, Vol. VII, pp. 339-341.

WITH the world approaching a climax in World War II, we in the United States are still facing our problems in the frivolous spirit of children playing the game of cops and robbers. Instead of getting hold of the solid facts, which give us strength, we are staking our future on eloquent words and on seductive fantasies. In the debate before Congressional committees on the lend-lease bill, for example, the division of opinion has been unrealistic. Conclusions have been based on wishful thinking and emotional hopes. The real question before the Congress and the nation is "How Strong Is America?"

I believe that the strength of the United States is potentially the greatest of any nation in the world, but it is not a constant and unchanging factor. It reaches its peak when the people are united, and when government, industry and agriculture cooperate along sound economic lines. On the other hand, our capacity to raise popular living standards in peace or to wage successful battles in war is weakened by domestic class warfare, political business baiting, lack of balance between agriculture and industry, and by extravagance in the expenditures of government.

Turning the United States into "an arsenal for democracy" calls for cooperation and sacrifice by all the people. In view of this need for a united effort over here, the British censor did an unwitting disservice to his country in permitting anews dispatch to come across the Atlantic the other day to the effect that the gallant British people were chanting a new song, entitled "Thanks, Mr. Roosevelt." The song's lyrics include the line: "We're saying, 'Thanks, Mr. Roosevelt,

'We're proud of you for the way you're helping us carry on.'"

This personal allusion strikes a jarring note for it comes at a time when the President is asking Congress for vast discretion over the accumulated assets and future productive power of the American people. The song, in thanking Mr. Roosevelt personally, needlessly places our Chief Executive in an embarrassing light. By reverse psychology, the song helped to dramatize the fact that the President, in being generous, was doling out other people's money.

If American aid should prove to be of decisive importance to the British, the obligation incurred will be to the American people. The incident recalls an anecdote about a Chinese pauper couple who regularly slept under a bridge spanning the Yangtse River. One night as they were about to retire, the wealthiest man in town—a banker—trudged across the bridge muttering to himself about his losses that day at the market place.

Hearing him, the pauper wife remarked: "Lucky are those of us without financial worries!"

And the husband, taking his cue, rose to his feet, thumped his chest proudly and said: "Yes, and to whom do you owe your fortunate position?"

In dealing with America's strength, we must relate it to relative power of competing nations. Yardsticks must be streamlined so that they are capable of measuring capitalism and totalitarianism alike. Economic strength in war and in peace depends on the power to produce things. Cost under any governmental system must be formulated in terms of human muscle and brains, tools and power equipment, and natural resources.

America's position as the Number 1 industrial nation of the world springs from its primacy in the capacity to make things. Mass production is our special genius. Our superiority reflects lavish re-enforcement of human energy with electric kilowatts. It is the culmination of an improvement through the years in tools, which have been developed by creative minds working in the realm of science, invention and engineering. Our primacy also reflects a variegated continent—rich in a diversity of climate and in essential raw materials.

With less than 7 per cent of the world's population, we produce 61 per cent of the world's oil, possess slightly more than half of the world's known coal supply, 35 per cent of the world's railroad mileage, and 34 per cent of installed electrical capacity. We also lead all countries in iron and steel, copper, zinc, cement, artificial silk, wood pulp, paper and cardboard, automobiles and foodstuffs.

Out of these elements has developed in the United States greater material well-being for the common man than has been achieved in any other country in any time in recorded history. But this very strength is contingent on intelligent direction of the nation's productive mechanism. In the last decade, for the first time, the uninterrupted march of progress was halted. There has been, in this depressed period, no net addition to our capacity to produce. Nor should it be overlooked that this economic malady grew out of maladjustments between agriculture and industry which were not unrelated to World War I.

American industry has specialized in producing better living standards for 30,000,000 American families, and that job of course is a far cry from making lethal weapons of war. The job of transition from a peacetime to a wartime basis is a prodigious one, and the post-war readjustments back to peace will be at least as difficult.

Although military observers think that the hour of decision in the Battle of Britain may come by this Spring, William S. Knudsen, generalissimo of national defense, has candidly pointed out that the tooling up of America's new armament industry will not be completed until mid-Summer. In the meantime, Mr. Knudsen and his associates, especially Mr. John D. Biggers, director of production, are seeking to overcome the time lag by a plan for greater use of existing facilities. This supplementary procedure will be more costly and less efficient. Still it offers some promise of moving ahead the timetable of American aid and of stepping up total production of war materials. The building of special tools is of course the better way. But, we must, nevertheless, realistically face the fact that effective mass production is the result of much patient planning, trial and error, and correction of imperfection in new models after they have been tested on the proving ground of experience. The miracle of mass production can't be created overnight by decree.

As a nation we are strong to the extent that we fully employ our manpower for productive purposes and regularly replace and improve our machinery, and to the extent that we use our national resources judiciously. Thus, ourstrength hinges on the judgment and competence of management, which is the intelligence center of the business world. Accordingly, it is fitting that in this national emergency President Roosevelt should surround himself more and more with successful industrialists, who are experienced in achieving the teamwork which leads to efficient production. For, this job of producing more and better things obviously cannot be entrusted to political hacks or to doctrinaire professors.

In order to succeed as Presidential aides in national defense, the industrialists must follow the lessons they learned in private business. The need is for a master blueprint which will envisage the stresses and strains in the commodities of defense. Such a blueprint must reflect accurate knowledge of the existing tools and the new ones under construction, a grasp of the available manpower and natural resources. Then we need a bill of particulars on the available materials for producing the things the blueprint calls for. The directors of the program must determine how much and at what time the various parts will be needed on the master assembly line of the nation. And, as their contribution, the people should expect part of their working hours to be diverted from the regular routine of producing food, shelter, comfort goods and peacetime tools to preparing materials to defend the nation.

As a nation, we are strong when our economic groups—our farmers, our factory workers, our service employees—are in a balanced income relationship so that they can fully employ one another by exchanging the product of their year's labor. The prosperity of the United States has always rested primarily on the home market. The slender margin of national income which comes from foreign trade, though important, is vastly smaller than in countries such as Great Britain, Belgium and Cuba, which depend from 3 to 11 times as much on export trade for their welfare as we do.

Song writers and doctrinaires create the unfortunate illusion that the United States is infinitely strong, irrespective of blunders in national policy. They associate power with big gold hoards and colossal bank deposits. But gold is little more than a tool to facilitate international payments, and bank deposits are little more than debt circulating as money, which accelerates the production and exchange of goods.

Therefore, in order to stay at the front of the world economic procession, and to keep the living standards of our people the highest in the world, the United States needs to stress the harmony of interests of the various groups-capital, labor, management, agriculture and government. In any equal competition, we can hold our own, but it is fantastic to assume that we have an exclusive patent on machinery and modern power, and that other nations will not use our methods competitively. Accordingly, it is superficial for our public officials to believe that we are colossally rich and can afford to pile up a boundless debt in order to chastise wickedness wherever we find it and to reward virtue anywhere in the world.

We need to measure the cost of undertakings on which we consider embarking.

We must recognize that as a nation we have been weakened by nearly a dozen years of economic floundering. During this period, we neglected to make a thorough diagnosis. We sought to keep the sick patient going through incessant ministration of narcotics. And, we paid for this folly of perpetuating economic malady through taking from the gainfully employed an increasing portion of their earnings inorder to finance the evergrowing expenditures of government.

More than a decade of boondoggling and economic maladjustment has thus resulted in weakening our economic reserves and our national credit. In 1890, the worker was expected to give one day's work out of fourteen to government; recently, before the current emergency, government was taking the output of one out of four. As a result of this trend, our reserve economic strength during this emergency is less than it otherwise would be.

Fortunately, we are not so weak as a nation that we should doubt our capacity to defend ourselves. We can be eminently powerful in defense if we make the necessary sacrifices. But at best, the process will be costly and will definitely lower our living standards, unless there can be a miracle in absorbing the cost through a net increase in national productivity.

In the circumstances, we should expend our national substance judiciously, not recklessly. And we should not give our Western hemisphere neighbors and friends the impression that they can close their minds to their own economic problems in the thought that their rich Uncle Sam will pay for whatever great raw material surpluses may eventuate and, if necessary, dump them into the deep Atlantic.

In order to safeguard ourselves and friendly nations from such a threat as Adolf Hitler constitutes, we should make ourselves strong through looking realistically at the world scene. The unspeakable Hitler sprang from the evils and maladjustments growing out of World War I. Civilization will be ruined if the anti-Axis nations unanalytically and recklessly commit new follies under the emotional stress of hating Hitler.

If the totalitarian threat is to be swept back, we need cool determination, not excited emotionalism. The latter would play into Hitler's hands.

The tyrannical Hitler has obviously greatly strengthened Germany by increasing her production. But this is only from a short term and static standpoint. It should not be overlooked that Hitler has set in motion long-term counter forces which in time will plague him. The Nazi machine-made civilization is strong while it feeds on the existing inventory of human knowledge. However, it has within itself the seeds of decay for it lacks the basis for a steady increment in scientific knowledge and technical skills. Such forward movement depends on a small and creative minority of inventive minds, who are always in rebellion against things as they are. In a free nation such as ours, we have a political and moral climate which is sympathetic to pioneering minds venturing to shake new secrets from the bushes of knowledge. But in authoritarian nations the cardinal sin is to do independent thinking, to upset established ways, and to defy authority.

Thus, in such slave economics, the long-term rate of progress will inevitably be slowed up, and the sub-surface decay will ultimately prove decisive. Germany has injected basic long-term weaknesses into her revival of medievalism which Hitler glibly mis-labels the "New Order." While Germany is temporarily economically strong, she is morally weak. In making tyranny and ungodliness part of her credo, the Third Reich has developed internal defects of great potential significance. And in each conquest of neighboring countries, she has piled up more problems than she has solved.

Thus, as custodians of the world's ideas of liberty and human decency, we in the United States have an obligation to keep ourselves strong during this dramatic transitional period. In so doing, it should be our determination to keep the lamp of liberty burning, so that we can demonstrate to peoples everywhere that only freedom and human decency can promote the very highest standards of material well-being for all.