Evening star., 1951-07-23
Economic
(Continued From First pag,

thing attempted during World
War IT."
Today extremists are pulling in
diametrically opposite direction, =
Mr.. Truman continued. "At the
flrst signs of a letdown of the con-
f11ct in Korea they have COM
menced to clamor for a reduction
IN our defense program. On the
economic front, as soon as there
is slight Softening OF infiationary
pressures these extremists are
ready to discard the whole struc-
ture of inflationary controls or
shoot it full of holes. If we were
now to heed these extremists it
would be an even more costly
mistake then to have needed the
extremists year ago.
we have no reason to believe
tnat the events in Korea have
fundamentally changed the basic
soviet Intentions. The events at
nome have not removed the need
to expand our economic strength
or TO overcome the basic inf1a-
tionary danger"
Security Costs to Rise.
Security program costs have
reached an annual rate of s35
Dillon and are scheduled to in
crease to an annual rate of more
than $50 billion by the end of 1851
and to nearly SOS billion by the
middle of 1852.
The major part of the sched-
uled increase of almost $50 billion
IN the annual rate of security ex-
penditures from the middle ofI
this year to the middle of 1882"
ne explained. will involve pro-
curement of aircraft, weapons,
tanks and other military end
Items and some of the specialized
equipment involved in their pro-
ductlon. Within the next 12I
months, hard goods deliveries are
scheduled to rise from a monthly
rate of about 81 billion to about
three times that amount,
During the same period. air.
craft deliveries are to be tripled
and the tank-automotive program
increased to four times the pres
ent rate of deliveries"
Must Combine Measures.
In any event, about IL million
workers, an increase of 2 million
over present totals, will be engaged
directly or indirectly in the de-
tense production year from now
as compared with about Is million
at the peak period in World War
II, ne estimated. The cost of the
program as now scheduled prob
ably will absorb at its peak about
one-tourth of the total national
output. as compared with almost
one-half in 1914, he said.
In his discussion of the prob
lem OF expanding and stabilizing
the economy, particularly in view
OF inf1ationary pressures that
might accompany rapidly in
creasing defense production. Mr.
truman said that many kinds of
indirect as well as direct economic
controls can be used. But he
warned that sterilization will
depend upon the use of a combi-
nation of measures including
Taxation, pairing of less essential
governmental expenditures, credit
curbS, voluntary saving by income
earners. rent control, and ef-
fectiVe price and wage controls,
AS for Federal spending, he
commented:
The budget which I have sub
mitted to Congress for the cur
rent fiscal year represents a
minimum program consistent with
this policy. Further, the spend
ing activities of the Govern
ment are under continuous re-
view. Those which can be reduced
without weakening the defense
ef1ort are being reduced. Those
which can be redirected to make
a further contribution to defense
are being redirected."
Fair Wage Policies.
The President told Congress-
that fair and practical wage
policies are in process of deyel-
opment" by the Wage Stabilize
ion Board.
Wage stabilization," he said
requires a careful balance among
'hree major objectives. First It
should seek to prevent an in
crease in total payrolls so large
hat. after making due allowance
or higher taxes and voluntary 4
'aving. they would seriously in
late total demand. Second. it
should provide adequate incen-
ives for increased productive ef-
'ort and redress serious ineoui-
les in the wage structure. Third