Second, through a new Community Action program we intend to strike at poverty at its source--in the streets of our cities and on the farms of our cou… - Lyndon B. Johnson

When I came to Washington in 1932, corporation profits were nonexistent. They had a loss that year of $3,400 million. In 1942, 10 years later, we got it up to $9½ billion. In 1952, 10 years later, we got it up to $17.2 billion. In 1962 we got it up to $24.6 billion. In 1963 we got it up to $27.1 billion, and the Chairman of the Council of Economic Advisers tells me we are not only not going to lose $3,400 million this year, as we did 32 years ago when I came here, but our profits this year are going to be $31 billion after taxes--these high taxes. Labor has gotten about $52 billion more in wages than they got in 1961 Their wages have increased $51 billion or $52 billion in 3 years. Corporation profits have increased from a $3.4 billion loss in 1932 to $31 billion after taxes. Now, those groups--the capitalists who make the investments, the managers who manage it, and the workers who produce it-have got to be concerned about these taxeaters. There is an increasing proof that we can at long last break this unemployment stalemate that has marked our economic life month in and month out for several years.

Last year the nature of the war in Vietnam changed again. Swiftly increasing numbers of armed men from the North crossed the borders to join forces that were already in the South. Attack and terror increased, spurred and encouraged by the belief that the United States lacked the will to continue and that their victory was near. Despite our desire to limit conflict, it was necessary to act: to hold back the mounting aggression, to give courage to the people of the South, and to make our firmness clear to the North. Thus. we began limited air action against military targets in North Vietnam. We increased our fighting force to its present strength tonight of 190,000 men. These moves have not ended the aggression but they have prevented its success. The aims of the enemy have been put out of reach by the skill and the bravery of Americans and their allies—and by the enduring courage of the South Vietnamese who, I can tell you, have lost eight men last year for every one of ours. The enemy is no longer close to victory. Time is no longer on his side. There is no cause to doubt the American commitment. Our decision to stand firm has been matched by our desire for peace.

Gains in jobs and profits are going hand in hand. Workers are gaining in purchasing power through fuller employment, through longer hours, through higher wages. But on the average, higher wages have not increased the cost of doing business. Why? Because productivity has risen to match the wages. Profits are gaining through higher volume and lower costs and lower taxes--thanks to the help of a good many men in this room. But on the average the gains are not coming through higher prices. So long as this is the pattern, we can use our fiscal and our monetary policies to stimulate business activity and not to restrain it. Both business and labor are making their economic gains by enlarging the size of the economic pie. They are not making--and they cannot continue to make--gains by taking bigger slices at the expense of one another or at the expense of the American consumer.