2- 3. Defense claims over 1/2 of all expenditures for industrial research and development. 4. Defense spending here is the equivalent to about 1/5 of all personal income in California. 5. Probably 2 out of every 3 new Californians are being drawn here directly or indirectly because of the expansion of our defense industries. 6. Last year California enjoyed 23.9% of the 27.8 billion dollars spent for military procurement while 27 states had less than 1% each. While the State of California is growing at a rate twice the national average, this excessive growth rate rests in large measure on the current necessities of the Cold War and upon the race for the conquest of space. Rapid growth sets in motion other economic forces - increasing land values, higher labor costs to attract workers, and higher costs of local and state governments to provide streets, schools, sewers, and all the other facilities and service that go with population growth. The non-defense sectors of the economy get caught in the tide and tend to expand to meet the demands engendered by the rapid growth in the defense industries. All this suggests to me that our economy in California is vulnerable to any thaw in the Cold War, that any curtailment or diversion of defense spending would quickly result in serious economic dislocations, and that we in this state are ill prepared to effect an orderly transition to an economy more oriented to peace. At the moment there is little immediate prospect for easing in the Cold