Evening star., 1949-06-26

into q depression. Ii that the psvs'
ent downward swtng IN prctoe
tion and prices wiii gain ever"
increasing momentum --~ the re
verse Of the inflatlcnATy px1rx
spsral--&nd set cut Of hand The,
prefer TO talk about eeoaosnie
eushions. normal reaatassrnents
leseliing off late this year OF eafis
next year, and the difference be
tween the prcsen, situation ard
the depressaons Of 1890 and 1879
Many Will BE Hurt
Al this time there Is no SERIOUS
talk In Administration circles
about the immediate need O. eosn
prellenstse Government action Il
bolster the economy and GREAT
employment walter Rsatheg
president OF the cIO United Auto
mobile Workers has demanded
such action and a group o! Demo'
cratic Senators and Representa-
tives. headed by Senator James "
Murray Of Montana. are woFkins
on q bill. 10 be introduced soon
called the Economic Expansion
Act OF isSa. that would deal with
economic maladiustments hy
broad cooperative action OF prt.
vate enterprise and Government.
But as one high Administration
official put IL. the President 4
anti initiation program Is . dead
duck. and the Murray bill isni
Matched yet"
Even at the current sate ol
decline In production and prices
many people will be hurt. some
distressingly 80. But many Other
people. particularly the fixed in
come groups such as the 3 500 .ooo
Government workers and persons
living on pensions or annuities
were badly hurt by the imitation
Of postwar prices that forced them
ID dip into their savings or do
without important goods and
services.
This writer has discussed the
economic situation and the near
future with such offsciais rs Treas
ury Secretary Snyder. Federal
Reserve Board Chairman Mccabs
and former Chairman Eccies
Presidential Economic Adviser
Nourse. with spokesnen OF nation
al business examinations And
leaders In Congress,
Calls il 'Disinfiation'
The consensus OF their yiexs
although each would probably dis.
sent In part. In that the present
recession can be kept under con.
troll and perhaps work 10 the good
Of the whole country i--and u
Ia Q biz II:
!. II management will cut prices
even at Q serious threat "a
profits--to tap the reservoir OF
spending power In the country
and put on aggressive merchan-
Ql&lnG Campaigns
2. II organized labor win be
content with moderate fourtf,
round wage increases that would
not increase the price Of goods
and services.
The converse OF this idea. and
the danger for the future. is that
management will sharply cut back
production to avoid reducing
prices. and labor will strike fos
fourth-round wage increases.
which. II granted. would inevitably
raise prices.
DR.. Nourse, who calls the pres
ent situation ''disinfiation." says
1t will take fast footwork" by
MANAGEMENT. "to lead the process
Of downward price adjustment
not fiaht IT,
"Disinfiation." he explains.
means deceleration. but not the
kind of uncontrolled or clumsy
deceleration that makes the piano
nose over or go into . ground loop
Sees NOTHING Alarming
Last year was not IN illustra-
ton OF reasonably fun employ
ment In the contemplation Of ths
Employment Act but . year o!
slight unemployment In part
cause and In part result Of inna-
ton. II drew housewives from
their homes and old people out oi
retirement because Ut high prices
another pay envelope WAS needed
II led TO rapid turnover. low pro-
ductivity and high training cost
A We ease down from the posi-
ticn where industries are strain
ing TO catch up with their backios
Of orders, . kmall reduction In,
marginal employees means lower
unit cost Of labor"
Or. Nourae believes that we
may take Oh some fat. but ne
shall not die and need not really
suffer- He asserts that II IL not
the voice Of Poliyanna but buss-
ness statistics tiaat nays under
lying conditions sre sound and
baxicaIiy favorable. He continues:
We are not lacking In liquid
funds or credit reserves. We ars
not cverbuiIt or topfseasy with In
yentoTy. Our population II In q
new phase u growth In numbers
and wants. ExpandinG families
are elamowtng for morn and bet
teF h0me& Expandtns communi-
ties are demandtnG more public
service facilities. Automobiles
rolling stock and power. and much
plant eouipmens are ovefase. ]
see nothing in the past history a
American business 70 Justify tl,e
thought that business Eenisss viii
fan % explicit these snarkets
DecIine Held Necessary
NJ. Eccies. once The DARING Of
the Rno0esesstan New Dealers BE-
cause az his advocacy Of Lord
KeyneS theo8y of 0oyernment
spendins In D depFe&ssnn. heiaeves
thse TIN present decline 10 ''neces+
mry and desirable 10 correct
SERIOUS nAIadlustmenfs aa prices
ara trssrnnea = He In uuunaed "a tn