Evening star., 1950-07-26

revenue measure to yield about
billion dollars of new revenue on /;
full year basis. The tax bill nov
pending should be revised to pro
duce these results.
The immediate enactment of thi
tax program is vital, but this interim
measure alone will not be enough
1t will be necessary, when the nee.
essary studies can be completed
and when the extent of oui
new obligations can be more clearly
determined, to raise still additiona
revenues to avoid a deficit during
times when economic policy anc
budgetary policy call for balanced
budget or a surplus.
The sharp increase in defense out
lays makes it imperative 10 re-
examine all Federal programs which
might compete for materials and
other resources required for ma
tlonal defense. In addition to the
restrictive policy already put in force
for housing credit, I have directed
other agencies to revise their pro-
grams, giving particular attention
to public works projects, loan pro-
grams, and procurement and inven-
tories of supplies and equipment
The primary purpose of these ac-
tions is to reduce the demand fol
scarce resources, and they will also
help to reduce Federal expendi-
lures.
Some reductions in expenditures
can be expected in agricultural price
supports with the demand for food
stuffs high, and in veterans re-
adjustment benefits as employment
opportunities increase. We should
guard, however, against indiscrimi-
nate Budget Slashes. Indeed, in ad-
dition to direct military programs
a number OF other Government pro-
grams, such as stockpiling and
power development, will have to be
expanded in response to the inter-
national situation.
In addition to action in the fields
OF taxation and expenditures, other
restraining measures of a general
character are needed to deal with
the extreme tightness of supply and
the upward movement of prices in
some important areas.
Even under less compelling cir
cumstances, I have urged that the
Government should have certain
credit-control authority to act
promptly if necessary. I have
on several occasions recommended
that the Governments authority to
restrain consumer credit, which ter
minated in the middle of 1949.
should be restored. 1t is highly de-
Slrable that this be done now, be-
cause many of the products
financed by consumer credit are
heavy users of materials critically
needed for defense production.
The construction industry, which
is now operating at very high levels.
is also a major user of critical ma
terials. With respect to types of
housing credit extended directly or
guaranteed or insured by Federal
agencies, I have already directed
that limitations be imposed where
ever permitted by existing law. Fur
ther authority to restrict real es-
tate credit, particularly privately
financed loans, should be granted.
Authority is also needed to restrain
commodity speculation.
Measures Recommended.
These general restraining meas
ures will reduce total demand, and
thus release materials for military
uses. But they cannot operate with
sufficient speed or Selectivity to
serve the military need for those
commodities where the shortage of
supply is already apparent and will
very quickly be intensified. These
shortage situations, if neglected,
could intensity the pressure upon
prices, initiate against an equitable
distribution of available supply, and
thus force us to invoke more sweep
ing controls which might be avoided
if we take more moderate action
now. I am therefore recommending
that the Congress Immediately en-
act legislation to authorize the fol-
lowing proirities and ALLEGATION of
materials and facilities needed for
the national defense and for essen
tial civilian use; limitation of nom
essential uses; restraint of inven-
tory boarding, and requisitioning of
supplies.
Such measures to assure the
necessary distribution of available
supply are essential. Our main ef-
fort, however, must be to concen-
trate upon production and more
production. But shortages of some
critical commodities are now SO
great that, even with ALLEGATION
measures, we can have no assurance
OF. enough supply for military Sc
curity and essential civilian use.
Moreover, if future events should
compel. further rapid expansion ot
our military efforts, 1t would then
be too late to commence the lengthy
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