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bama for the replacement of obsolete and structurally unsound locks, and harbor improvements at New York, DuluthSuperior, Redwood City, Calif., and Portland, Maine. In addition, an extension of the existing sea wall at the Galveston harbor project will be started to protect a highly developed urban area. These new projects will involve a total cost of 42 million dollars, of which an estimated 4 million dollars will be spent in the fiscal year 1954. Maintenance activity on existing projects is being held to minimum levels required to permit continued operation and prevention of excessive deterioration.

Highways: Federal assistance for highway improvement is provided principally through grants to State and local governments. Construction activity, which had been retarded by the steel shortage and other factors has expanded considerably in recent months. As a result, Federal-aid expenditures for highway construction are expected to increase from 417 million dollars in the fiscal year 1952 to 511 million dollars in 1953, and 540 million dollars in 1954.

The level of highway grants in any given year is determined by legislative authorizations previously enacted by the Congress and by the volume of State and local construction activity on Federalaid road systems. Therefore there is little control over the expenditure level of this program through the budget process. For example, the funds included in this budget for the fiscal year 1954 represent merely an estimate of the grants that will be required to meet commitments incurred under the FederalAid Highway Act of 1950. The Highway Act of 1952 increased the annual authorization from 500 million dollars to 575 million dollars and will cause expenditures to increase in the fiscal years 1955 and 1956.

In addition to Federal-aid highway grants, the Bureau of Public Roads will spend 50 million dollars in the fiscal year 1954 for other highway programs, such as forest highways and access roads to defense plants, military installations, and sources of strategic materials.

Aviation: Despite major technological and financial gains in recent years, the aviation industry is still in a developmental stage, and continues to need substantial Federal assistance in order to realize its full potential growth. Such aid is provided principally through the Federal airways program, grants-in-aid for airport construction, and airline subsidies.

In keeping with the general restriction on public-works activity during this emergency, airport-construction grants to State and local governments have been curtailed in recent years. With the continued growth of air traffic, serious airport inadequacies have developed. To permit increased Federal assistance for the most urgently needed projects, it is recommended that new obligational authority for this program be increased from the 14 million dollars enacted for the fiscal year 1953 to 30 million dollars for 1954.

Subsidies for airline operation are now merged with compensation for carrying mail, and are included in postal expenditures. However, recent studies by the Civil Aeronautics Board provide for the first time an official estimate of the cost of this subsidy program. For the fiscal year 1954, it is estimated that airline subsidies will amount to 71 million dollars. or slightly more than half of the total air-mail payments.

Postal services: With presently authorized rates, the postal deficit for the fiscal year 1954 is estimated at 669 million dollars, about the same as in 1953.

Unless postal rates are increased, the fiscal year 1954 will be the sixth consecutive year in which the postal deficit will exceed one-half billion dollars. The largest part of these deficits results from the grossly inadequate postal rates being charged for magazines and other secondclass mail, and for advertising circulars and other third-class mail.

I have repeatedly urged the Congress to relieve the taxpayers of this unnecessary burden by increasing postal rates sufficiently to reduce the postal deficit to the cost of handling Government mail, airline subsidies, and other items which are properly chargeable to general tax revenues a cost in the neighborhood of 170 million dollars.

Regulations: Recent reductions in the appropriations for the regulatory agencies-particularly the Interstate Commerce Commission and the Federal Communications Commission-have seriously impaired their ability to carry out the responsibilities assigned to them by law. The administrative expenditures of these agencies are small in relation to the importance of their activities to the Nation's economy. This budget provides moderate increases for these agencies to enable them to overcome serious backlogs of pending cases, and to deal more effectively with emerging new problems.

NATURAL RESOURCES

Expenditures for natural-resources programs in the fiscal year 1954 are estimated at 4.1 billion dollars, an increase of 727 million dollars over the current fiscal year and 1.1 billion dollars over 1952. Almost all of this increase is in the atomic-energy program, which will account for two-thirds of the expenditures for natural resources in 1954 Other major expenditures will be for flood control, irrigation, and multiplepurpose river basin development, including related power facilities. The remaining expenditures will be largely for the management and development of the national forests, parks, and public lands, and for our mineral resources program.

The money we spend for the orderly conservation, development, and use of our natural resources represents a sound investment. In many cases the activities are wholly or partially self-liquidating. But what is more important, they contribute to our military strength and to long-range economic progress. They are prerequisite in many fields to the needed expansion of private investment. While exercising the utmost economy in these programs, I believe we should al

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Atomic energy: Ten years ago, scientists working at the University of Chicago under Federal sponsorship brought about the world's first nuclear chain reaction. Since then, our efforts in the development of atomic energy have of necessity been devoted primarily to meeting the needs of national security. Two major expansions of facilities for the production of fissionable materials and atomic weapons have been authorized by the Congress since the attack on Korea. The first was authorized in the fiscal year 1951 and the second early in the fiscal year 1953. The rise in atomic energy expenditures results largely from construction work on the new facilities. As a result of this expansion, our ability to meet the threat of aggression will be significantly increased.

The new obligational authority which I am recommending for 1954 is substantially less than the amount enacted for the current fiscal year, because the bulk of the construction funds needed to finance the expansion programs has already been provided. However, I am recommending an increase in funds for operations. These funds will provide for increases in our reserve of atomic weapons and for the development and testing of improved weapons. I am also recommending an increase in funds for the development of atomic power for naval ships. The keel of the first nuclearpowered submarine was laid last summer. The funds recommended for air

craft reactor research will enable this program to proceed at an effective pace.

Research in the peacetime uses of atomic energy shows steady progress. We have developed new techniques in medical research, and substantial progress has been made in the fields of physics, chemistry, and biology. This research will continue in 1954. This budget also provides for continuing research in the development of atomic reactors for the production of electric power-a program which promises to have a major impact on future power developments.

Land and water resources: In the fiscal year 1954, the Federal Government will spend 1.1 billion dollars for the development of land and water resources. More than half of this amount will be for the 133 river basin development projects and units now under construction by the Bureau of Reclamation and the Corps of Engineers. Much of this work is multiple-purpose development for irrigation, flood control, navigation, and hydroelectric power, creating substantial benefits for industry and agriculture and making an important contribution to defense. Seven flood-control projects and seven irrigation projects or units will be substantially completed during the year.

The major part of the task of developing our river basins is still ahead of us. I believe we should no longer defer certain flood-control and power projects which we have repeatedly postponed since the beginning of World War II. I am therefore recommending funds in the 1954 budget for starting construction on eight new projects and five additions to existing projects, where planning is for the most part well advanced and where there is clear economic justification. This new work is required to protect important areas which are highly vulnerable to floods, or to meet defense or essential civilian power needs in critical shortage areas. The ultimate cost of these new projects and features is estimated at 325 million dollars, of which about 16 million dollars will be spent in the fiscal year 1954. Funds also have been included in this budget for advance planning of some high-priority projects already authorized by the Congress.

Six of the new projects I am recommending are for flood control. These include Toronto Reservoir in Kansas, and five local protection works at Wheeling-Benwood on the Ohio, Sny Basin in Illinois, Lake Pontchartrain in Louisiana, Cape Girardeau in Missouri, and on the Little Missouri River near Murfreesboro, Ark.

This budget also includes funds to enable the Tennessee Valley Authority to start construction of a steam-electric plant in the western part of the system, and to begin installation of additional units in the Kingston and John Sevier steam-electric plants. These facilities are required to meet the growing power needs of the area for defense, industrial, and domestic purposes. I also recommend that construction be started on Ice Harbor lock and dam in the Pacific Northwest and that work begin on the installation of power facilities in three reclamation projects. These are the

Deer Creek power plant of the Provo River project in Utah, the American Falls power division of the Minidoka project in Idaho, and the Roza power plant in the Yakima project in Washington. I also believe that the Congress should authorize the Hells Canyon power project in the Pacific Northwest.

The situation regarding the St. Lawrence project is somewhat different now from what it has been. When the last Congress did not approve the 1941 Canadian-United States agreement calling for joint construction of both the seaway and power phases of the project, Canada and the United States proceeded with alternate arrangements, under which the main river control works necessary for power development would be built by appropriate entities in the two countries, and Canada would build the necessary additional works to provide a deep waterway between Montreal and Lake Erie on the Canadian side of the international boundary. As I have repeatedly informed the Congress, I regard these alternate arrangements as much less desirable than the 1941 agreement but in the absence of congressional action they represent the only way to get the project built.

The alternate arrangements are well along. The International Joint Commission has approved the plans for the main dams and control structures in the International Rapids section of the St. Lawrence River. The Province of Ontario is ready to construct the Canadian share of these works. Applications are pending before hte Federal Power Commission for a license to build the United States share. The Government of Canada is prepared to construct the waterway. Under these circumstances, the Canadian Government has informed us that they consider it no longer practicable to revert to the 1941 agreement.

I believe, however, that there is still an opportunity for the United States to join, as we should have long ago, in building the St. Lawrence seaway. If the new administration and the new Congress propose practical arrangements for sharing the cost and the construction of the seaway, I believe the Canadians will, even at this late date, admit us to partnership in the seaway. I hope very strongly that this will be done, for it is clearly in the best interest of both countries that this important waterway along our common boundary should be built and controlled by both countries together.

Water resources policy: In the past few years I have frequently informed the Congress of the need for new concepts and procedures to modernize the outdated ways of handling our water resources development. I have supported efforts to plan and operate water resources projects on a regional basis. From time to time I have reported to the Congress that certain projects failed to meet standards for sound Federal investment, and have indicated that present Federal law is in need of clarification or revision.

In 1950 I established the Water Resources Policy Commission to examine

these problems and report their findings to me. At my request, the Bureau of the Budget has been making an intensive study of the Commission's findings, recommendations, and legislative proposals, working with representatives of other Federal agencies and consulting with State and interstate bodies and private associations.

Also at my request, the Director of the Budget has recently established uniform standards and procedures to be used in reviewing proposed water resources programs and projects. These guides will strengthen and improve Executive Office review of water resources development proposals. However, major changes must be made in present Federal legislation before up-to-date policies for comprehensive development of water resources can be made fully effective.

I also suggest that the Congress may wish to study its own machinery for dealing with water and related land resources programs in order to provide a sounder basis for consideration of interrelated, multiple-purpose programs.

A year ago, I established a Missouri Basin Survey Commission to study the policies and organizational problems involved in the water resources development of this basin, the scene of two serious floods within the past 2 years. The forthcoming report of this Commission should make a substantial contribution to the sound program planning and improved administration needed for the balanced development of this large basin.

AGRICULTURE AND AGRICULTURAL RESOURCES

Our agricultural programs are designed primarily to achieve three related goals: First, to preserve a healthy farm economy; second, to conserve and improve our soil resources; and third, to assist farmers in attaining the high level of production necessary to meet the food and clothing needs of our people.

Net expenditures for agricultural programs in the fiscal year 1954 are estimated at 1.8 billion dollars, 116 million dollars lower than the estimate for the current fiscal year.

Agricultural and agricultural resources [Fiscal years. In millions]

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Stabilization of farm prices and income: Expenditures for stabilization of farm prices and income are made under the agricultural price-support program, the International Wheat Agreement, the permanent appropriation for removal of surplus agricultural commodities, the Sugar Act, and the Federal crop insurance program.

Net expenditures for price support, made by the Commodity Credit Corporation, represent primarily the excess of outlays for loans and purchases over loan repayments and proceeds from sales of inventories. Whether the Corporation has net receipts or net expenditures in any particular fiscal year depends mainly on factors affecting the supply and demand for commodities under price support-such as the acreage planted, weather conditions, food needs in this country and abroad, and general economic conditions. Estimated expenditures of 729 million dollars in 1954, including the costs of the International Wheat Agreement, are 72 million dollars below the current estimate for 1953. This is due largely to an expected decline in outlays for wheat, offset in part by increased outlays for corn. The substantial change between the net receipts in 1952 and the large estimated expenditures in 1953 is accounted for mainly by the increase in corn and wheat production and the decrease in wheat exports between the 2 years.

The present International Wheat Agreement expires on July 31, 1953. Further negotiations for its extension will be undertaken this month. This budget assumes that United States participation in the agreement will be continued.

Financing farm ownership and operation: Agricultural credit programs supplement private credit sources. The loan programs of the Farmers' Home Administration help new farmers and low-income farmers unable to obtain credit from other sources to develop and operate efficient family-size farm units. Despite the numerous applications for these loans, other budgetary requirements impel me to recommend that the

program be kept to approximately the same level as in the fiscal year 1953.

The programs supervised by the Farm Credit Administration-including the activities of the Federal land banks, Federal intermediate credit banks, production credit corporations, and banks for cooperatives-are also directed toward achieving more efficient family-size farm operations, and toward the development of farmers' cooperatives.

Financing rural electrification and rural telephones: The rural electrification program has made great strides since its inception in 1935. Less than 11 percent of all farms had the benefit of central station electric service in that year; less than 12 percent were without this service on June 30, 1952. The loan program which I am recommending for rural electrification is 30 million dollars less than in 1953, but it allows 135 million dollars for further progress toward bringing electricity to the Nation's farms.

The 1950 census showed that only 38 percent of our farms had telephones-a smaller percentage than in 1920. Furthermore, many farms with telephones had unreliable service. I am therefore recommending an increase of 30 million dollars in the loan program for rural telephones.

Conservation of agricultural land and water resources: From the long-run view, conservation of our soil resources is the most important of our agricultural goals. Without adequate conservation measures neither a high level of production nor a healthy farm economy can be long maintained.

For this reason I recommend that the advance authorization for the agricultural conservation payments program in the crop year 1954 be continued at the 250-million-dollar level authorized by the Congress for the 1953 crop year. I am also recommending an increase of 2 million dollars in the Soil Conservation Service appropriation to provide technical services to new soil-conservation districts, which are being established at the rate of about 125 each year. This is the minimum program which I feel is compatible with the sound management of our soil resources.

Effective soil and water conservation is an indispensable part of our Nation's efforts to prevent and control floods. By increasing the amount of water held on the land on which it falls, by slowing the rate of runoff, and by controlling the course which the water takes in major watersheds, we not only prevent loss and improve the productivity of the soil, but we also lessen the danger of flood damage and siltation on the main streams. Thus far, however, flood-prevention efforts of this kind in the upper reaches of our rivers have generally lagged behind the flood-control work we have been doing on the main streams. For that reason this budget recommends appropriations of 22 million dollars to accelerate upstream flood-prevention work, compared with 8 million dollars in the current fiscal year. Fourteen million dollars of the total amount recommended for 1954 will be allotted to the 11 water

sheds on which work was begun in 1947; 8 million dollars will be for work to be started on seven new watersheds and for investigations and surveys. The commencement of work on the new watersheds is recommended because it will not only have important flood prevention and conservation benefits, but also because it will enhance the value of downstream projects constructed by the Corps of Engineers, the Bureau of Reclamation, and non-Federal interests. The 18 watersheds on which work is either being done or is proposed in this budget represent only a small fraction of the agricultural and forest lands on which work needs to be done.

Research and other agricultural services: Expenditures for research and other continuing basic services for agriculture, such as extension work and insect and pest control, are expected to increase from 147 million dollars in the fiscal year 1953 to 154 million dollars in 1954. This is due largely to construction of the laboratory for research on foot-and-mouth disease for which the Congress appropriated funds last year. Also, I am recommending increases in a few of the most essential research activities, such as the Federal grant to State experiment stations, marketing research under the Agricultural Marketing Act, and research on plants and animals and on insect and disease control.

LABOR

The labor programs of the Federal Government help to promote the effective use of our manpower resources, which is necessary for the strengthening of our military defenses and for the continued vigorous growth of our economy. These programs furnish basic economic protection to the working force against the hazards of unemployment, safeguard workers against substandard wages and working conditions, bring together the job opportunity and the job seeker, and speed the movement of manpower into defense industries.

In the fiscal year 1954, expenditures for labor programs are estimated at 263 million dollars. Eighty percent of this amount will be for direct grants to the States for the administration of employment service and unemployment compensation programs, including the recently established unemployment comInpensation program for veterans. creases in these grants will account for most of the rise in labor expenditures over 1953. Small increases are recommended to strengthen Federal labormanagement relations activities and to enable the Department of Labor to cooperate with the States in finding more effective ways to deal with the distressing economic and social problems of migratory farm workers and their families. In addition, increases in appropriations for employment service, industrial safety, and apprentice training programs are recommended to enable the Department to continue work previously financed through a special appropriation for defense production activities.

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Placement and unemployment compensation administration: Part of the estimated increase in grants to the States for administration of unemployment compensation is due to changes in legislation. The Veterans' Readjustment Assistance Act of 1952 provides for unemployment compensation payments to veterans who do not find work after release from the Armed Forces. These payments are administered through State employment security agencies under agreements with the Secretary of Labor. Another factor in the increase is that the cost of administering the Federal-State unemployment compensation program is greater because State salary rates continue to increase and the expanded coverage under State laws results in more claims for unemployment compensation even though the general level of unemployment remains low. Finally, experience now indicates that a higher claims load than was assumed in the last budget will develop in 1953 and continue in 1954, as a result of temporary unemployment due to industry-by-industry adjustments. These increased workloads, which could not be foreseen at the time the 1953 budget was prepared, will require a supplemental appropriation tentatively estimated at 6.7 million dollars for grants to the States in the fiscal year 1953.

Although some State unemployment compensation programs have been strengthened by extending coverage, there is still need for basic improvements in the Federal-State system along the lines I have previously recommended.

More attractive job opportunities in industry for the domestic labor force make necessary the recruitment of additional workers from Mexico for seasonal farm employment. These workers are brought in under conditions which protect them from exploitation and protect the employment opportunities and labor standards of available United States workers. About 275,000 Mexican workers will be needed to meet farm production requirements in 1954. Legislation authorizing such recruitment expires on

December 31, 1953. I believe it will be necessary to continue this program.

Labor standards and training: Increasing defense production has reversed a downward trend in accidents on the job. In 1951, more than 2 million workers were injured, resulting in a loss of 140,000 man-years of working time. To reduce these individual tragedies with their accompanying losses to national production, the Department of Labor is planning to intensify its safety training program in cooperation with safety organizations, private industry, and State and other Federal agencies. Provision also is made in this budget for enforcement of the recently enacted Coal Mine Safety Act.

The Bureau of Apprenticeship will continue to encourage and assist in establishing training programs for apprentices needed to meet critical shortages in skilled occupations essential to defense production. Greater emphasis will be given to general programs for training semiskilled and unskilled workers on the job to increase their productivity and skills in a wide variety of defense production occupations.

The report of the Commission on Migratory Labor in 1951 pointed up the unique social and economic problems of migratory farm workers, which call for special attention by Federal and State governments and local communities. That report has stimulated increased interest and action by a number of States. This budget includes 156 thousand dollars to enable the Department of Labor to start a program of cooperation with the States in developing more effective ways to bring to these workers and their families a reasonable share of the advantages normally enjoyed by other citizens.

Unemployment trust fund: Receipts of the unemployment trust fund in the fiscal year 1954 are expected to be slightly higher than in 1953. Benefit payments are also expected to be slightly higher, because more unemployed workers will be eligible for benefit payments under the expanded coverage of State laws, even though it is assumed the level of unemployment will remain low. These receipts and payments are not included in the budget totals.

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number of these units has been bought by veterans of World War II with the assistance of loans guaranteed by the Veterans' Administration. Since the attack on Korea, special emphasis has been placed on providing housing and community facilities in critical defense areas. The record levels of construction both before and since June 1950 have materially improved the housing of the average American citizen. Adequate housing is still unavailable, however, for millions of low-income families.

Net expenditures for housing and community development in the fiscal year 1954 are estimated at 509 million dollars, a decline of 248 million dollars from the current fiscal year. Principal factors in the expected decline are a lower volume of mortgage purchases and direct loans for veterans' housing, and substantial net receipts instead of expenditures for the public-housing programs.

Housing and community development
[Fiscal years. In millions]

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Defense housing and community facilities: To help meet the most urgent defense requirements, Federal assistance has been granted or is planned for about 200,000 new housing units in critical defense housing areas and near military posts. Private builders are constructing most of these homes with the aid of insurance liberal Federal mortgage backed in many cases by Federal mortgage purchase commitments.

In those areas where private builders even with these special financing aids, are unable to provide the needed housing, the Federal Government is supplying 19,000 temporary units to meet shortterm needs near defense installations. Federal grants and loans are also helping local communities to finance the expansion of community facilities where

defense activities have made such expansion necessary. To provide a small part of the additional temporary housing units urgently needed near military installations, I am recommending supplemental appropriatitons of 12.5 million dollars for the current fiscal year. Moreover, since it is now apparent that we cannot complete the needed minimum program before the Defense Housing and Community Facilities Act expires next June 30, I believe that the major provisions of the act should be extended for another year, with increased authorizations and additional appropriations of 100 million dollars.

Aids to private housing: Most of the private housing built in critical defense housing areas is being financed with mortgages insured by the Federal Housing Administration. Since the successive relaxations of real estate credit controls in 1951 and 1952, applications for Federal insurance of mortgages in other areas have been rising steadily. If this trend continues, it is expected that there will be a need in the fiscal year 1954 for mortgage insurance commitments to finance nearly 300,000 new housing units. In addition, it is estimated that there will be a need for the Federal Housing Administration to insure mortgages covering purchases of more than 200,000 existing houses and 2 million other loans for improvement and repair of existing housing. To meet these needs will require increases of 1.5 billion dollars in the maximum mortgage insurance authorizations and 500 million dollars in the authority to insure property-improvement loans. Neither of these steps is likely to increase budget expenditures, since the premiums paid for the insurance usually exceed administrative expenses and losses.

The Federal National Mortgage Association is authorized by law to purchase certain mortgages insured by the Federal Housing Administration or guaranteed by the Veterans' Administration. The Veterans' Administration also has authority, until June 30, 1953, to make direct loans to veterans in areas where guaranteed loans are not readily available. Over the past 2 years, both substantial purchases of veterans' housing mortgages and direct housing loans to veterans have been necessary, because the 4-percent-interest rate on the guaranteed mortgages has been unattractive to many private lenders. The expenditure estimates in this budget assume that under the restrictive policies adopted last fall a smaller volume of veterans' mortgage purchases will be necessary in the fiscal year 1954. Purchases of defense housing mortgages are expected to increase under the additional authority provided by the Congress last summer.

Public housing: Since the attack on Korea, the low-rent public housing program has been held far below the average annual level of 135,000 starts authorized in 1949. For the fiscal year 1953, the Congress has limited the program to 35,000 new units, which will meet only a small part of the needs of low-income families now living in substandard units. For the fiscal year 1954, I am including in this budget, as I did for 1952 and 1953,

provisions for starting a minimum of 75,000 new units.

In this program, local authorities construct and operate the housing units. The Federal Government lends the authorities money or underwrites private loans to start construction, and pledges an annual contribution to help maintain the rents at levels which the tenants can afford. During the fiscal year 1954, the local authorities expect to sell substantial amounts of long-term bonds to private investors, using the proceeds to repay short-term loans from the Federal Government. As a result, receipts are expected to exceed expenditures for new loans under their program. In addition. the Public Housing Administration plans to sell 16,000 war housing units built during World War II. This will mean a further increase in receipts.

College housing loans: In May 1950, the Congress authorized 300 million dollars in loans to help educational institutions obtain adequate housing for their students and faculty. This program has been held at low levels and has been confined to defense-related housing construction. However, applications for loans which qualify under these limitations have been increasing, and expenditures are expected to rise substantially in the fiscal year 1954.

Urban development and redevelopment: The broad program for slum clearance and urban redevelopment authorized by the Housing Act of 1949 has been moving slowly, partly because of the time required by the local communities to make specific plans for projects which meet both local needs and Federal requirements. At present, about 180 cities are actively planning projects, but actual clearance and redevelopment operations have begun on only 23 approved projects in 14 cities. By the end of the fiscal year 1954, it is expected that 10 projects will be completed and about 110 others will be under way.

Under the original statute, additional loan and grant authority totaling 350 million dollars becomes available in the fiscal year 1954. However, because of the limited progress of the program to date and the plans to use private funds to replace most of the direct Federal lending, expenditures are estimated at only 33 million dollars.

Civil defense: Recent advances in the techniques of warfare make it imperative that we immediately provide the essentials of a civil-defense program. I have repeatedly warned that failure to do so could leave a fatal gap in our security structure. Passive civil defense of the World War II type cannot be effective against atomic warfare. Rather. the emphasis must shift to strong preattack measures, the success of which depend largely on advance warning. In this budget, therefore, I am recommending appropriations which would enable the Federal Government to complete the air-raid warning system in the 191 cities which are likely to be principal targets in the event of an enemy attack on the United States. Because the effectiveness of civil defense organizations and techniques depends so directly on an adequate Nation-wide warning sys

tem. the Federal Government should pay the full cost of the warning program. The Government also should continue to accept full financial responsibility for the stockpiling of a national reserve of medical and engineering supplies and equipment. The present 50 percent matching arrangement should continue for other civil defense programs, since primary responsibility for organization and training of voluntary forces remains with the States and cities.

I am recommending total appropriations of 150 million dollars for civil defense in the fiscal year 1954. Because of anticipated delays in deliveries of medical and engineering supplies, expenditures are expected to decline from 84 million dollars in the current fiscal year to 74 million dollars in 1954.

EDUCATION AND GENERAL RESEARCH

Expenditures for education and general research in the fiscal year 1954 are estimated at 288 million dollars, an increase of 16 million dollars from the present fiscal year. These expenditures, of course, do not include the amounts spent for education and research in carrying out military, veterans', atomic energy, and other programs.

Sixty-five percent of the expenditures for education and general research in the fiscal year 1954 will be for grants to those local school districts that have been overburdened by defense activities.

Another 10 percent will be for grants to States to help support their vocational education programs and their land-grant colleges. The Federal Government also assists Howard University and educational institutions for the deaf and blind, and it maintains major library and museum services at the National Capital. Expenditures for general-purpose research are for the work of the Census Bureau, the National Bureau of Standards, and the National Science Foundation.

Education and general research
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