Evening star. [volume] (Washington, D.C.) 1854-1972, 1949-01-07

1929, 1889 and 1943 was included
report to Congress today.
not have authority to take Other
action which would effectively re.
strain inf1ationary expansion Of
bank credit and at the same time
assure the maintenance of an or.
derby market for the vast public
debt.
Income Gains Offset.
consumer income in l948 in
creased per capita about in pro-
portion to the increase in consumer
prices. which meant that consumers
had no appreciate gain in real
incomes despite an increase of 3 tc
4 per cent in total national output
Income from most major sources
was greater than in 1947.
Consumption expenditure went ur
less than income in 1913. While
personal saving increased, this was
not reflected in the rate at which
people accumulated liquid assets
currency and bank deposits, insur-
ance policies. and securities. A
larger proportion of saving was in
vested in housing, unincorporateo
businesses, and farms.
Business investment continued al
high level throughout 1913. Plant
and equipment outlays by bust.
nesses other than farms totalec
about S19,O00000,0O0, slightly above
the level reached IN the latter hall
OF 1947, although with hi2her costs
the physical volume of such invest.
ment was not quite maintained.
inventories of nonfarm businesses
likewise continued to increase in
value throughout the year, the in.
crease amounting to about $1,000
100000. OF this amount, 81. 900 .0O0,
oO0 was accounted for by price
increases.
Corporate financing of investment
IN plant and equipment, inventories
and customer credit required s26..
600, OOO. 900 in 1948. $4,000 900 600 less
than IN l947, but that part of new
investment which went into plant
and equipment increased.
Housing Shortage.
The housing supply was increased
by well over a million residential
units during 1913. But since last
May the number of new housing
starts has been falling off rapidly.
ms does not mean that the hous-
Ing shortage has been overcome
Rather it means. as have pointed
out in previous reports, that the
construction industry has been pric-
ing itself out of the market for all
but expensive homes.
The housing shortage is one that
calls for prompt and bold action bv
Government and by industry-ac-
ton by Government that will pro-
ouce loW-rent public housing, Stun
clearance, and rural housing for
families of low incomes: action by
to reduce costs so that de-
cent homes can be built at prices
that wage earners with moderate in
comes can afford.
The major portion OF the housing
job must be done by private indus
try. Here the bottleneck is cost. At
this time OF national stocktaking I
urge all elements of the building in
dustry substantially to lower costs SO
that housing production may reach
new record levels.
Municipalities can perform a
major role in reducing costs by
undermining their obsolete building
codes, which add to costs unneces-
sarily.
Tax Slash Hit.
Government fiscal transactions
were again a strong anti-inflation-
airy factor in the early part of 1948.
due to the excess of receipts over
expenditures. But this factor de-
clined substantially during the year
One of the main supports of
an anti-inf1ation policy is a large
treasury surplus. AS a result of
the tax reduction. of last year and
the necessary increase in Govern
ment expenditures, this powerful
weapon is not now available. Tax
receipts, it is true, have been rising
out this has been largely due to the
lnhatlonary rise in incomes, profits
ana pay rolls. This inflationary rise.
IN turn, was aggravated by the ef-
1ects OF the tax reduction. $50
AS we turn from consideration of
the facts of our economic situation
to a program of action, there are
several broad principles which 1 be-
lleve should guide us. $50
First. We should remember that
the goal we seek is the greatest
for the whole country
and not the special gain of any par
tlcular group. That is why the En-
ployment Act of 1916 calls upon the
President to present an economic
program aimed at continuous max
mum employment, production and
purchasing power" I firmly believe
that this goal is attainable.
100000 Jobs Needed,
Maximum employment for 1949
means that nearly 1,0OO,O 900 addi-
tlonal job opportunities should be
provided for the growing labor force.
Maximum production means that
our increased labor force and mod
ernized plant should strive for a 3
to per cent increase in total out
put. Maximum purchasing power
means that the sum total of market
demand by Government, business
and consumers, domestic and for
eign, should be proportionate to our
productive capacity. 1t must not pe
more or we shall suffer imitation.
1t must not be less or we shall suf-
Ter unemployment and under-utili-
cation of our resources.
Second. We should think and
work with a reasonably long look
ahead, not keeping our eyes Just on
the problems of the moment. Our
immediate tasks must be placed in
the perspective OF our long grange
national detectives. ."
We must pursue Affirmative pro-
grams for housing and health, for
education and resource development
Yet the fight against imitation pre-
vents us from undertaking these
long-range programs with the speed
and on a scale that would otherwise
be desira BILE. $50
Third. In order to have a yard