Evening star., 1949-07-11
UrqesCongress to Combat Slump;
Economic Report
Calls Outlook
'Reossuring'
Partial Tert OF Mr.. TrnndnS
Message on Page A-4J
By Joseph A. Fox

py SoSCPU -. w
President Truman today aban-
doned his proposal for $4,000
600 900 tax increase in the face
of q slumping economy, as he
called on Congress to adopt an
l1-point program to combat the
moderate downward trend in
business.
The President also served
notice that there is no intention
of Government retrenchment at
the expense of essential expenol-
lures" for economic and social
programs fostered by the admin
istration at home and abroad,
even though deficit financing is
the alternative.
His views were given in a mes
sage sent to Congress with the
mid-year report of his Council OF
Economic Advisers. The council
report found the general outlook
"reassuring" despite dislocatlons
stemming from the falling of OF
postwar markets.
Message Chides Congress.
In his message. Mr.. Truman
scored the tax cut passed over his
veto in the Both Congress. and
chided the legislators for failing
to enact his frequently recon-
mended imitation controls, declar-
ing both these developments now
we're having an adverse effect on
the country.
Stressing that "our economy IS
still operating at high levels OF
employment and production and
that "the kind of Government
action that would be caller for in
serious economic emergency would
not be appropriate now" the Presl-
dent, nevertheless, recommended
that Congress take the following
actions at this session because OF
their vital Importance in the
current economic situation:
81. Repeal the tax on the trans
portation of goods, liberalize the
provisions for carry-overs of losses
by corporations. and raise estate
and gift taxes. No major increases
in taxes should be undertaken at
this time.
Would Extend Loan Limit.
20. Extend the time limit now
fixed by law on the maturity OF
loans to business by the Recon-
struction Finance Corp.
IS. Provide for a broad study
OF investment and development
needs and market opportunities
in an expanding economy.
a. Adopt an improved program
OF farm income supports.
IS. Increase the minimum wage
to at least IS cents an hour and
broaden its coverage.
"6. Strengthen the unemploy-
ment compensation system by in
creasing the amount and duration
of benefits and extending cover
age.
Urges Boost in Old-Age Benefits.
"7. Extend to July 25, 1850, the
availability of readjustment al
lowances to veterans not protected
by State unemployment compen-
sation laws.
"8. Raise benefits and extend
coverage under the old-age and
survivors insurance system anc
improve the public assistance pro-
gram.
g. Enact legislation to permit
Federal agencies and assist States
and localities to intensity their
advance planning and to acquire
sites for useful projects.
10. Enact legislation to pro-
vide technical assistance to un-
er-developed areas abroad, and
to encourage investment in such
areas.
III. Restore the Reciprocal Trade
Agreement Act"
Cautions Congress, Industry. =
The President, while optimistic,
cautioned Congress not to be con-
tent to '1et nature take it's course
in re-establishing economic sta
bility with full production and
employment. and in a don't rock
the boat" vein. he admonished
industry against adopting policies
that would worsen the situation
ITO restrict business invest
ment. curtail production, reduce
employment or slash wages. be-
cause our economy has declined
somewhat, would only serve to drag
us further downward" he en-