Evening star., 1946-12-01
Economists Cite
Business Fears
Kew to Economic Policies
May Be Forthcoming
in Councils Report
By Clarke Beach

The burning question is recession or
boom in 1912"
Talks with high Government fiscal
and economic experts brings out these
facts:
/. Many, probably most, expect re-
cession in 1947, followed by prolonged
boom Some believe the boom will end
in crash.
2. A few see mo compelling reason"
for an economic slump in the fofeseeabls
future. But these do not predict it will
not occur. Men in the latter group feel
that it's quite possible the country Ia
talking itself into depression"
The national economy now includes
many governmental agencies and insti-
tutions which it did not have before
the 1929 crash
Council Report Due.
Newest and most strategically placed
of such units is the Presidents Council
of Economic Advisers, whose job is to
gather facts and recommend measures
to promote the Nations economic we'll
being.
What the council says In its first
report-a confidential memorandum to
the President due December 16-may
supply the key to economic policies for
the coming year. The President, under
the Full Employment" Act of 1916. will
make an economic report to Congress
at the beginning of the next session.
Here are five ways the pessimisti-
cally inclined experts think a recession
might get started next year:
l. If prices get too far ahead Of wages,
buying might slacken, production slow
down, workers be thrown out of jobs.
2. When warehouses and shelves are
well stocked, the resulting drop in dealer
demand for goods might throw pro-
duction off balance.
3. Some producers, unable to procure
certain parts and materials, are piling
I'D unfinished and unsaleable merchan-
disc.
4. Wages and other costs are rising
faster than some businessmen say
they can increase their prices.
S. Although employment is practically
at maximum, many factories are run
ming at slow speed.
Hope Rests on Consumer Demands.
The inventory buying situation,
which Commerce Department econo-
mists find particularly disturbing, is
also chiefly the responsibility of private
business. The main hope of the ex-
perts is that when inventory buying
ceases, consumer demand and the con-
struction program will take up the slack.
The optimists whom President
Truman and Secretary of the Treasury
Snyder have been among the most out
spoken-list many favorable factors now
prevailing, such as the following:
i. Highest level of peacetime employ
ment in history-57, 100000.
q Industrial production at a peace
time high.
3. Steel ingot production in November
above 81 per cent of capacity new
postwar high.
4. Electrical power output in the first
week of November at the highest level
on record.
S. Exports and imports at all-time
highs.
Meanwhile new safety devices (new
since 1920 are being alerted to take
action in case crash threatens. They
include:
International Bank and Fund, de-
signed to stabilize currencies and facil-
itate sound loans to nations needing
rehabilitation.
Securities Exchange Commission, to
prevent blind, irresponsible speculation
in the stock market.
Federal Deposit Insurance Corp to
prevent banks from making unwise
loans and to avoid bank panics by in
suring deposits.
Banking Act of 1888, to prevent deposit
banking institutions from underwriting
securities.
Reconstruction Finance Corp. primar-
lily to aid by extending loans.
Farm Credit Administration, to bail
out farmers who are In temporary
financial difaculties.
Social Security Unemployment Insir.
ance, to ease the effects Of unemploy-
ment.
distributed By the Associated Press.)