Evening star., 1947-07-21
Booming U. S. Economy Needs
Basic Support Instead Of Props,
Truman Report Tells Congress
President Presents
Rosy Picture Except
For Initiation Peril
By james Y. Newton

SNHSs - tNSWt0H
President Truman told Con-
gress today that while Americans
are living better than ever before,
the Nations high-fying economy
still is being sustained by tenn
porary props" and he warned
that many basic adjustments
must BE made to complete the
transition to a permanently sta
BILE and maximum-level peace
time economy"
The President said that recent
uncertainties arising in four fields
indicate the "inf1ationary factors in
our economy may become stronger.
He named those as the effect of the
uncertain crop outlook on food
prices, the effect of the coal mine
wage settlement on industrial prices,
the trend of housing costs and house
production and the whole matter
Of foreign economic policy"
BY and large, Mr.. Truman painted
an optimistic picture of the future.
The home-front dangers of which
he warned were more psychological
than real. Along that line he again
called on industry and trade to curb
prices and foresaw little actual
need of raising prices further.
Special Economic Report.
This was contained in a special
mid-year economic report to Con-
greSs. The information was sup
piled by the Presidents Council of
Economic Advisers and various other
Federal agencies, and whipped to-
gether by DR.. John r. Steelman,
assistant to the President, and the
White House staff.
In it the President pointed to the
programs he laid out in his first
economic report last January for
Government and private enterprise.
He praised labor and management
for settling their differences amic-
ably, gave praise also to some busi-
ness for reducing prices voluntarily,
but concluded neither in the area
of private adjustment nor congress
sional legislation have it's (the re-
port's) recommendations met with
adequate response"
He chided Congress for passing
the liberalized rent bill and for fail
ure to act in several fields Once
again he asked for a comprehensive
Government housing program, in
creases in social security benefits
and raising of minimum wage rates
by statute to at least 65 cents an
hour, as ways of easing the shock
of necessary economic adjustments.
Production at Record High.
On the bright side, the report
stated the country now is produc-
ing goods and services at an annual
rate of $225, 200, 600, 900. a sizeable
increase. over last year and record
for peace or wartime.
The goal of $4,000 900 jobs was at
tanned in June.
Purchasing power has been ade-
quate to absorb the record output
of factories, mines and farms. Farm
income is at record level Busi-
ness is in strong financial posi-
ton. Business investments in plants
and equipment are at record levels.
Labor productivity is on the increase.
Americans today live in a richer
and more productive economy, and
are enjoying its benefits more equit-
ably, than ever before in peacetimc
history" the report stated 90
Month by month there has been
talk CT recession; month by month
recession has failed to materialize.
Temporary Props" Cited.
Then, Mr.. Truman gave this warn
ing:
The unprecedented prosperity of
our Nation must not be a cause for
idle self -congra tulation. We must
remember that full employment at a
high price level is being sustained at
present by the reconversion demands
of business and the backlog demands
of consumers, by extensive use of
savings and credit, and by an extra
ordinary excess of exports over i'm
ports.
These are temporary props to
our economic system. AS they
weaken, we shall need to make basic
readjustments to complete the tran
sition to permanently stable and
maximum-level economy
The readjustments, the report
continued, must be made before
the lack of them produces serious
and business decline.
Adjustment through recession or
depression Is tragic, costly and
wasteful."
Holding of Price Line Urged.
1t said there must be further price
reductions in many lines, and in
some cases there is need to hold
the price line in the face of recent
developments which revive some
fears of another upswing of
imitation"
The latter referred to higher food
prices resulting from reports of
short crops, and to predictions of
higher industrial prices resulting
from the new contract gains of
John L. Lewis coal miners.
I'm the numerous instances where
profit margins permit, OK where
future profits would be better pro-
tected by assuring larger volume
through lower prices, business should
make these adjustments now" Mr..
Truman said.
The report stated that this years
farm output may still turn out to
be as large as last years How
ever, it warned that "unfounded
fear" of food shortages resulting
from uncertainty of crop outlook
might lead to speculation, hoard
ing and unnecessary buying"
Mine Raise Held Justified.