The potters herald. [volume] (East Liverpool, Ohio) 1899-1982, 1949-11-24
Douglas Studies
How To Achieve
Full Employment

Washington (LPA) - A Con
gressional committee began search
ing the week of November Ia fol
ways to make the full employment
law work through the complicated
processes of fiscal and banking
policy.
Headed by Sen. Paul Douglas
ID, ILL.,, the committee called a
parade of government officials and
bankers, and received wide var
iety of opinions. Douglas explained
that one of the purposes of the
hearings was to bring out into the
open'' some of the reasoning back
of the mysterious decisions"
reached by bankers and Federal
Reserve Board officials on interest
policy, bank reserves, and things of
that kind.
A typical banker viewpoint was
given by w. Randolph Burgess,
chairman of the executive commit
tee of the National City Bank.
Burgess discounted the possibility
of eliminating booms and busts
through spending policies of the
government, and favored the trad
itional balanced budget and use of
interest rates to control the econ
omy.
He said inflationary factors were
stronger today than deflationary
factors, and suggested policy of
increasing interest rates to tight
en- up the supply of money. Douglas
pointed out there were still about
100000 unemployed, but Burgess
contended that was less than "nor-
mal' He did not define what he
meant by normal.
Senator Douglas asked if in
creased interest rates would not in
crease the profits of banks. Bur
CESS agreed, but said banks needed
to earn more. Douglas expressed
surprise, asserting he thought bank
profits were higher than most
other profits. The banker said
banks were earning "only seven
per cent" on their investments.
Douglas said he had figured the
profits at 10 per cent, and said he
thought even seven per cent was
higher than other profits. Bur
CESS conceded profits had reached
10 per cent in 1915, but insisted
seven per cent was lower than the
banks should make.
Before Burgess testified, Maple
Harl, chairman of the Federal De-
posit Insurance Corporation, at
tackled proposals to withdraw fed
eral reserve support of the govern
ment bond market, which would be
one means for increasing interest
rates. Harl said bankers support
ing such a policy were interested
only In making a profit.
Raymond Foley, Federal Housing
Administrator, expressed d dou BIT
about proposal by Douglas to
use housing construction as
means of stabilizing the economy.
Douglas proposed either to curtail
or stop FILA loans in good times
and to make them under very lib
eral terms in bad times, so as to
use home construction as a balance
wheel for economic swings.
Earlier, the subcommittee heard
Alfred Williams, president of the
Federal Reserve Bank of Philadel-
phia, express his belief that we
were in for more initiation, result
ing from the seal for social well
fare" and the demands of the cold
war against the Soviet Union. The
banker proposed, that instead of
putting into operation the sort of
social controls being instituted by
the British Labor government, the
US should rely on manipulation of
credit and money to keep things on
an even keel.
Williams took a crack at the
unions increasing resort to indus
try-wide collective b bargaining
(though he also deplored industry
wide pricing practices). He said
such powerful political forces" as
we're represented by big unions
mad to be considered in setting ma
-ional econHmic policy.
The unions will have their turn
ater. Emil Rieve, chairman of the
CLOS Full Employment Commit |
tee, will appear Nov. 23. The AFL :
expects to file statement outlin-
ng the Federation's views.