Evening star., 1948-04-18

/
any significant increase in produc-
ton. 1t means simply that more
dollars will be bidding for the same
goods, and prices will be bid up &C
cordingly. Furthermore. by elm
mating the Governments surplus
of receipts over expenditures, the tax
reduction bill will remove the most
important single factor which has
helped to hold prices in check during
recent months.
At the same time that taxes are
being reduced, we are undertaking
a program of assistance to foreign
countries. We are also considering
certain necessary additions to our
national defense program. Both of
these programs are of utmost i'm
portance, and we must have them.
But they will result in strains on
parts of our economy, which can
add to imitation If we do not have
proper controls.
No Slack In Economy.
In considering the effects of these
programs, it is extremely important
to realize that we now have prac-
tically no slack in our economy. We
have substantially full employment.
Factories generally are operating at
top capacity. We cannot increase
our plant capacity rapidly. We
have only the normal growth in the
labor force to count on for new
manpower.
Under these circumstances, new
demands for materials and produc-
tion necessarily have direct and
telling effect on prices-unless the
proper anti-inf1ationary steps are
/ taken.
1t is apparent, when all these
factors are considered, that the
danger OF imitation has not
diminished in the last few months.
On the contrary, the need for the
legislation I requested is even more
urgent.
1t seems to me that the basic
question is clear 1t Is whether we
take action in time to do some
good or whether we delay until
crisis is upon us. 1t is simply a
matter of taking out insurance be-
fore the house catches sfre.
If the cost OF living continues to
climb wages and prices will con-
tinue to chase each other upward.
The unhealthy boom will impose
further hardships upon those who
fall behind in the race. The greater
the imitation and the longer it lasts,
the greater the danger that it will
end in unemployment, business dis
tress, and recession or depression.
1t is of little significance that no
one can forecast the exact time
when this will happen. The i'm
portant point is that we cannot
afford to let it happen at all.
Greater Interest in Defense.
| Since I addressed the Congress
one month ago today on the need
for prompt action on the European
Recovery Program, and on univer-
sal training and selective service,
there has been a greatly increased
interest by our citizens in national
defense and in our foreign policy.
This interest has been reflected in
| the enactment of the legislation to
aid European recovery. But our
domestic economy has been dan
gerously neglected. 1t should be
ineglected mo longer. ~ .+-
believe that the anti-inf1ation
program I recommended to the
Congress last November should be
enacted at once. That program is
balanced and we'll rounded. 1t in
cludes measures to reduce the
] excessive amounts of moneys and
credit are~Iifting pricas.-It
includes measures to see that scarce
goods are distributed fairly and to
their most important uses. 1t
includes measures to deal directly
with specific high prices.
! All these measures are reasonable
and practical They attack lntia-
ton in direct manner. They Of
fer a complete and consistent pro-
gram to strike at the heart OF the
problem of high prices.
The measures proposed are de-
signed to hold prices down while
keeping production up, and in
creasing it as rapidly as possible.
They are designed to stop runaway
prices, so that great numbers OF
American families will not be priced
out of the market for the things
they need. These measures are de-
signed to insure that scarce goods
are not wasted, but are used where
they will be Of the greatest bene-
! fit.
| wish to emphasize that the stu
alton has already been made more
difficult by delay. Additional de-
lay will only add to the danger.
Seeks to Avoid Crisis.
The American people must not
be misled by those who oppose
reasonable imitation program
and a reasonable defense program.
It has been said that the present
administration is trying to create
an economic crisis or an interna-
tional crisis. The exact opposite IS
the truth. We are striving to avoid
an economic crisis by protecting
our prosperity while we still have
it. We are striving to avoid war
crisis by being firm before it is too
late
The welfare of our own people,
the effectiveness of our foreign poll
cv, and the strength of our de-
fenses all depend on our prosperity.
Only if we preserve the soundness
of our economy, through prompt
and adequate measures to control
imitation, can we contribute our full
share to a peace in which freedom
and democracy will be secure.
I believe that the people OF the
/ United States understand that we
have great opportunity and great
responsibility to lead the world
through these changing and diff
cult times. I believe that our people
have the faith, the wisdom and the
unselfish devotion to the commond
good to take whatever actions are
necessary to meet that response
bility
We can succeed if we act courage
ously and act in time.
Democratic Committee