Evening star., 1949-11-27

weeks q new SET OF hearings nave
been taking place in the caucus
room. If you happened to be
passing the open door you would
have, seen within three or four
members of the Congress behind a
table,, a witness or two in front
of the microphone, a good sprin-
king of reporters at the press
tables, andselsewhere a handful OF
others, mostly departmental Off
cials. AT no time have there been
in attendance as many as half a
dozen ordinary taxpayers or sight
seers. Yet the subject of the hear
ings. which are being held by a
small subcommittee of the Joint
Committee on the Economic Re-
port, is of direct interest to every
one: The stabilization of our daily
economic life through monetary
and credit controls.
As its name indicates, the Joint
Committee on the Economic Re-
port is composed Of Senators and
Representatives. Along with the
Council of Economic Advisers,
which reports to the President, the
Joint Committee was created un-
der the Employment Act Of 1946
to study the economy and the CO.
ordination Of programs furthering
full employment, for the guidance
Of the Congress. The present sub
committee was set up in May.
1949, to investigate "the effective
ness and coordination of none
tary. credit and fiscal policies. +"
To judge from the testimony gath
cred during the past two weeks
there is room for more co-ordina-
ton than exists in this field.
Varying Views
Thus far the hearings have re-
vealed wide differences Of opinion
between and even within some
of those Washington agencies
concerned with money and bank
ing, not to mention differences
between bankers and Washing
ton," between State and national
banking viewpoints, between Dem
ocrats and Republicans and
among economists. To the layman,
indeed, the operation and control
of the whole money side of our
national economy is laid open in
a scene of controversy and confu-
sion familiar to few of us who do
not regularly read financial publi-
cations. Here at work are rival
wrestlers for power: Centraliza-
tion versus States rights; control
versus free enterprise; compensa-
tory spending versus rigid budget
balancing. Here we see unashamed
interagency jealousy of power
and rivalry for prestige, social
recognition and pay increases for
jobholders. These discussions,
sometimes in sharp phases, are of
great magnitude: the safety Of
your checking account, the pur-
chasing power of the dollars in
your pocket, the worth Of the
Government bonds which your
life insurance company holds
against the day when 1t will have
to make a payment on your &C
count.
They don't always speak of the
problem in just those words. They
use such terms as support level
for Government bonds" reserve
requirements for member banks, '
"open-market operations" and
"convertibility of the dollar" The
background Of the present hear
ings may be found In a 443-page
book published by the Joint Com
mittee. It contains the replies to
questionnaires which the subcom-
mite sent to the Treasury, the
Federal Reserve Board, the Fed
eral Deposit Insurance Corp. the
Controller Of the Currency, the
IL Federal Reserve banks, and q
large number Of State officials,
economists and bankers. In scope
OF subjects embraced, the question
naire and the replies are perhaps
as broad as the work of the famous
National Monetary Commission
created by the Congress in 1908
Its report in 1912 foreshadowed
the Federal Reserve System, our
present central banks"
Party Lines Evident
The chairman OF the subcom-
mittee holding the present hear
ings is Senator Paul H. Douglas
the Junior Senator from Illinois,
who was born in Massachusetts
81 years ago. AS an economics
professor at the University OF
Chicago. Mr.. Douglas devoted his
main attention to economic the
ory, especially with reference to
labor and population problems
Money and banking are not his
main forte. The other subcom-
mittee Senator is Ralph E. Flan-
ders of Vermont, who gained
national attention as chairman of
the Committee for Economic De-
velopment. Mr.. Flanders was
president Of the Federal Reserve
Bank of Boston in 1944-1946. Like
Mr.. Douglas, he believes in plan
ming. In the Senate he sits on
the Republican side.
Three Representatives serve on
the subcommittee: Wright Pat.
man Of Texas and Frank Bu-
chanan Of Pennsylvania - both
Democrats-and Jesse P. Wolcott
of Michigan, the Republicans
most experienced banking-and-
currency man. Mr.. Wolcott's long
legislative experience shows up In
the hearings. The conflict be-
tween Republican and New Deal
or Fair Deal views is well dis
played in the questions Wolcott
and Douglas have been putting to
the witnesses. It is clear that
the Illinois Senator wants the
strengthening of the Federal Re-
serve Board as modulator Of our