Evening star., 1946-12-08
i. S. Business
DiagnosisDue
Economists to Report
on Conditions and
Remedial Moves
BY Clarke Beach

submit their diagnosis of the patients
condition to President Truman Decem-
ber 16.
The report will be the first fruit Of
the Full Employment" Act of February,
1946-a governmental experiment unique
in American history.
The three doctors" are these members
of the Presidents Council of Economic
Advisers, set up under the act:
Edwin Griswold Nourse, chairman,
former vice president of the Brookings
Institution, a private research organ
ization.
Leon H. Keyserling, former Columbia
University economist.
John Davidson Clark, former dean of
the College of Business Administration
of the University of Nebraska.
The Council members, paid $4,000
year each, keep continual check on
conditions in industry and business.
The minute they detect what seems to
them a sign of coming unemployment
or economic decline, they flash the signal
to the President, along with recon-
mendations for remedies and preven-
tives.
Also, when the President requests 1t,
they submit report on the economic
state of the Nation.
The President is obliged under the
"Full Employment" Act to make an
economic report to Congress at the start
of each session. This report is then to
be passed on to new joint committee
on the economic report, which on
February will, in turn, report back on
1t to Congress.
Basis of Report.
Presumably, the Councils report De-
cember 16 will be the basis Of the
Presidents report to Congress the first
week in January.
The act is social legislation of the
type which Henry A. Wallace has
recommended in such writings as his
book Sixty Million Jobs" in which he
advocated democratic planning to pre-
serve our free enterprise system and
our free way of life.'
Not all economists believe that eco
nomic trends can be forecast success
fully enough to be of large practical
benefit. When the act was before Con-
gress many businessmen contended that
Government attempts to control the
national economy serve only to con-
fuse and alarm business and industry
and discourage free enterprise.
;. LII; trat
your economy by q statistical device
like that (the Employment Act," said
one of the Governments most promi-
nent writer's on economic affairs But
he conceded it would be of vast benefit
if it were successful, and he considered
it an experiment well worth trying.
The germ of the idea was given to
Congress by Mr.. Truman himself and
Senator Murray, Democrat of Montana,
when Mr.. Truman was Senator. It
was in a subcommittee report the two
submitted to the Senate Military At
fairs Committee in December, 1914.
Government economists generally rate
Council Chairman Nourse, So, as a
conservative. But some of them who
have been in conference with him lately
have expressed surprise at the liberalism
of his views.
Keyseriing New Dealer Favorite.
Mr.. Keyserling, 38, has been favorite
among New Dealers for many years.
He helped to draft much New Deal
legislation. Since 1912 he has been
general counsel of the National Housing
Agency.
Mr.. Clark, 81, has been in and out
of Democratic politics for several dec
AIDES. He is director of two banks in
Nebraska and was once director of
the Standard Oil Co. of Indiana.
No hint has been given as to the
recommendations of the council, which
may prove the keynote of the adnini-
strations economic policies during the
coming session. The council has main
tanned the utmost secrecy since "leak"
might touch off speculation which could
defeat the very purpose of the act.
Government economists who know
the council members, however, predict
they will attempt no forecasts beyond
the clearly foreseeable future. The
failure of experts guessing in the past
such as the highly erroneous forecasts
regarding unemployment after V-J day !
has served as q caution.
The council could recommend legis-
lative action, or it could advise that
matters be allowed to take their course
without resort to any more laws.
Free Enterprise Theme.
Legislation extending Government con-
trolls unnecessarily would not be in
keeping with the spirit of the act, ac-
cording to some of these economists.
They point out that when DR.. Nourse
accepted his appointment he empha-
sized that the act must be carried out,
in its own words, "in manner calcu-
lated to foster and promote free COM
petitive enterprise"
AS to what the Council could recon-
mend to alter economic trends besides
manipulation of price, production,
credit, export and other controls, the
economists suggest tax legislation and.
paying off the principal of the Federal
debt as possible alternatives.
Lowering taxes would be indationary,
they say, and such an expedient might
be advisable if the council foresees
period of dehation or recession next
year.
Reducing the public debt, on the
other hand, would be deflationary, in
the view of at least one expert. Alvin