Read the following passage carefully before you choose your answer. The following excerpt is from a news conference given by President Kennedy in 1962.

(1) Simultaneous and identical actions of United States Steel and other leading steel corporations, increasing steel prices by some six dollars a ton, constitute a wholly unjustifiable and irresponsible defiance of the public interest.

(2) In this serious hour in our nation's history, when we are confronted with grave crises in Berlin and Southeast Asia, when we are devoting our energies to economic recovery and stability, when we are asking Reservists to leave their homes and families for months on end, and servicemen to risk their lives -- and four were killed in the last two days in Viet Nam -- and asking union members to hold down their wage requests, at a time when restraint and sacrifice are being asked of every citizen, the American people will find it hard, as I do, to accept a situation in which a tiny handful of steel executives whose pursuit of private power and profit exceeds their sense of public responsibility can show such utter contempt for the interests of 185 million Americans.

(3) If this rise in the cost of steel is imitated by the rest of the industry, instead of rescinded, it would increase the cost of homes, autos, appliances, and most other items for every American family. It would increase the cost of machinery and tools to every American businessman and farmer. It would seriously handicap our efforts to prevent an inflationary spiral from eating up the pensions of our older citizens, and our new gains in purchasing power.

(4) It would add, Secretary McNamara informed me this morning, an estimated one billion dollars to the cost of our defenses, at a time when every dollar is needed for national security and other purposes. It would make it more difficult for American goods to compete in foreign markets, more difficult to withstand competition from foreign imports, and thus more difficult to improve our balance of payments position, and stem the flow of gold. And it is necessary to stem it for our national security, if we are going to pay for our security commitments abroad. And it would surely handicap our efforts to induce other industries and unions to adopt responsible price and wage policies.

(5) The facts of the matter are that there is no justification for an increase in the steel prices. The recent settlement between the industry and the union, which does not even take place until July 1st, was widely acknowledged to be non-inflationary, and the whole purpose and effect of this Administration's role, which both parties understood, was to achieve an agreement which would make unnecessary any increase in prices…

(6) The cost of major raw materials, steel scrap and coal, has been declining, and for an industry which has been generally operating at less than two-thirds of capacity, its profit rate has been normal and can be expected to rise sharply this year in view of the reduction in idle capacity. Their lot has been easier than that of a hundred thousand steel workers thrown out of work in the last three years. The industry's cash dividends have exceeded 600 million dollars in each of the last five years, and earnings in the first quarter of this year were estimated in the February 28th Wall Street Journal to be among the highest in history.

(7) In short, at a time when they could be exploring how more efficiency and better prices could be obtained, reducing prices in this industry in recognition of lower costs, their unusually good labor contract, their foreign competition and their increase in production and profits which are coming this year, a few gigantic corporations have decided to increase prices in ruthless disregard of their public responsibilities…

(8)…Some time ago I asked each American to consider what he would do for his country and I asked the steel companies. In the last 24 hours, we had their answer.

Overall, which of the following best describes the function of the second paragraph of the passage?

It defines the reasons for Kennedy's frustration with the steel company executives.
It establishes a sense of patriotism through which Kennedy will develop his speech.
It explains the conditions Kennedy will claim are contributing to the rise in steel prices.
It itemizes the grievances Kennedy will then use to rally the audience to action.
It provides the foundation on which Kennedy will call for a boycott of steel.