Evening star., 1947-11-25
Snyder Fights
TaxCuts, Urges
Curbs
Committee e Offered
3 Steps to Combot
Mounting Prices
By J.. A. O'Leor

Secretary OF the treasury
Snyder today threw more cold
water on Republican plans for
early tax reduction.
Called by the House Banking
Committee as the first witness on
President Truman's 10-point anti
imitation program, Secretary Snyder
placed three steps ahead Of lower
tax rates, namely:
One, find out how much will be
authorized for foreign aid; two, pay
something on the national debt. and
three, make revisions in the basic
tax structure before planning tax
reductions.
Earlier, in his prepared state
ment, Mr.. Snyder warned that II
foreign aid is provided without TAX
ing steps to curb imitation the coun-.
try would be in danger of economic
collapse at home" He called both
foreign aid and imitation control
essential.
3 Points Stressed.
When Representative Talle, Re-
publican, of Iowa asked the Secre-
tary when tax reduction could bs
expected in view of his testimony,
the Secretary replied, LAS soon as
we have sufficient funds to ac-
complish the three things I men.
toned"
Secretary Snyder told Mr.. Tale
the debt reduction before tax cut
should be a reasonable amount"
but he refused to state figure. He
said the Government should indi-
cate by the amount of debt reduce
ton that it intends to pay this
obligation.
The Treasury head and his stan
emphasized the Importance OF keep
ing up the sale of Government saw
ings bonds to individuals, expressed
qualification at the progress, but
testified this means of curbing irfla-
tion could be even more successful
If the Treasury had additional funds
to stimulate continuation Of the
wartime payroll bond purchase plan.
Questioned on Program.
Although Secretary Snyder left
for later witnesses the Presidepts
request for standby authority to re-
store rationing, price and wage
ceilings, he was questioned briefly
by Chairman Wolcott on the overall
Truman program.
The chairman wanted to know II
restrictions on consumer credit,
bank loans and other steps In the
Presidents 10 points would be
necessary "if' we re-enacted price
control"
Mr.. Snyder said, II think So" but
added that these other anti-infia-
ton moves could be flexible In that
event.
would you recommend any Of
these controls if we had sufficient
production to meet the demand?"
Mr.. Wolcott asked.
The Secretary indicated that II
the production was ample to meet
both the domestic demand and the
foreign aid program he would agree
the controls would then be un-
necessary.
The chairman's question was based
on general assumption that all Of
today's economic ills stem from
high purchasing power and made
quate production to meet tho
demand.
Special Reserve Suggested.
Meanwhile, a proposal that banks
be required to establish a special
reserve"-as a means of reducing
the swollen money supply" was
handed the Joint Congressional Eco
nomic Committee by Chairman
Mariner S. Eccles of the Federal
Reserve Board.
Mr.. Eccles said he knew such q
proposal would be strongly re-
sisted" by most bankers, but said
it offers in the boards opinion the
best solution for reducing inflation-
ary pressures from the large money
supply.
1T is our best judgment that over
all expansion Of the money supply
at this time Is inflationary and dam
gerous," Mr. Eccles said.
The Reserve governor carefully ex-
planned that he is not speaking for
the administration" nor the Fed
eral Reserve Bank systems as q
whole" but only for the Reserve
Board Of Governors.
Mr.. Eceles said the special re-
serve" would be in position to present
bank reserves and should be limited
by law to a maximum of Is per cent
on demand and 10 per cent on time
deposits"
1t should be "in the form either Of
short-term Government securities
or cash, cash items, interbank ball
ances, or balance with Federal Re-
serve Banks" he said.
In labelling foreign aid and infia-
ton control as essential, Secretary
Snyder said:
Both of these things are essen
(See ECONOMIC, Page A-40