Evening star., 1948-01-14

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of strategic materials, and the in
dustrial development Of retarded"
regions.
1--WE should within 10 years be
able to increase our annual national
output by 35 per cent" the Presi-
dent said. But he declared that
business plants and equipment need
expansion - especially, he said. IN
steel, oil, coke and electrical indus
tries.
Mr.. Truman said a long-range
housing program and the rebuild
ing of blighted city areas should be
set in motion by prompt act OF
Congress as "a start toward the
objective of a decent standard OF
American housing within 10 years"
Farm policy, he asserted, should
aim at a 10 per cent increase in
agricultural output in the decade
ahead through soil conservation, the
use of three times as many tractors
as before the war, Federal price
supports, and other measures.
AS for international affairs: "Our
economic relations should be such
as to aid in the restoration Of Eu-
rope under the European Recovery
Program. = In a framework of
increasing world prosperity, our
country can move forward most
confidently to meet the problems of
our domestic economy"
Based on Economic Data.
The report was based on economic
data prepared by the Presidents
Council of Economic Advisers. That
group was created under the En-
ployment Act Of 1916 to advise the
Government on policies best cal
culated to maintain maximum en-
ployment, production and purchas-
ing power, The Council Is made up
of DR.. Edwin G. Nourse, chairman;
John D. CLARK and Leon Keyserling.
The law which set up the Coun-
Gil and requires an annual message
from the President also created a
joint Senate-House committee to
weigh its recommendations. Sena-
tor Taft OF Ohio. chairman of the
Senate Republican Policy Commit
tee and a candidate for the COP
presidential nomination, heads the
committee.
Recalling that he issued mid
year report in August, Mr.. Truman
said that since that time, "the coun-
try has maintained q high level Of
prosperity, but on wave Of infla-
ton which has already caused seri-
Gus hardship and presents grave
concern for the future"
At the same time, he said, "the
year has revealed the previously un-
measured size of the profitable mar
ket which Is furnished when nearly
&C, 900 900 workers are steadily en-
ployed with modern equipment and
organization"
Reviews 1947 Record.
Thus blending optimism and eau
ton, the President gave this re-
view of the 1947 record:
Consumer income reached new
high rate Of $1,264 a person a year,
compared with $1,o74 in early 1916,
but the buying power of the con-
sumer's income dollar dropped
nearly per cent. Savings were
smaller and consumers drew in
creasingly on credit"
Consumer credit-which Mr.. Tru-
man wants brought back under
wartime controls-also reached q
new peak-s1s,aoo, 10000 by years
end.
Corporate profits before taxes rose
to $28, 900 900 900, or one-third high
er than in 1916: Profits after taxes
were $4,000, 100000 as compared
with $12,500, ,000, 900.
Business investment reached q
record level Of $25, ,000, 600, 900, but
"some part" Of the increase lay in
higher prices of building and equip
ment.
Housing units completed were
nearly double the 1916 number but
high costs raised the question
whether this rate could be con-
tinued."
Exports hit an annual rate Of $20,- |
900 900 900, then declined. The fu-
ture balance of trade will depend
much ION the size of Government
aid and private credits extended"
The gross national product, which
all goods and services pro-
duced in current dollar values,
reached a s237 600, 900 900 year
rate in the last half Of 1947, COM
pared with $204, 600, ,000, GOO in 1916.
Here Mr.. Truman flashed another
danger-inhation" signal.
The increase in consumer expen-
ditures exceeded by $500, 900 900
the increase in their incomes. he
said, adding that at their present
income consumers cannot absorb the
new rate of production when saw
ings dwindle, when the use Of credit
subsidies and when business retool-
ing levels OF.
Wage advances during 1947 kept
up generally with the cost Of living
trend during the year" the Presi-
dent said, "but did not gain the
ground lost when price increases
exceeded wage advances in 1946."
Mr.. Truman defended his cost
of-living tax plan against charges
from Republican legislators that it
would be triply inflationary-by
(a) increasing the ready money In
the hands Of consumers, (b) caus-