Evening star., 1953-07-09

ernment'S financial experts call q
temporary" suspension-may be
the most important problem be-
fore the country today.
1t is intertwined with a num-
ber of questions any one of which
~~--~-~
Lost Of q Series.
could be a major issue in any
election. Its ramiflcations involve
such things as taxes. Govern
ment spending and efficiency Of
operation. the huge Federal debt,
the general prosperity and we'll
being Of the people. In large
measure, decisions made in this
field must affect, for better or
worse, our position in world af-
fairs. military defense and all
other Government policies.
The success or failure of the
first Republican administration
in 20 years depends on the con-
tinuing health of the economy.
The G. o. P. can win in 1854 and
1856 If times are good and people
are prosperous. But the Republi-
cans almost certainly can't win
if there is a serious economic
letdown, no matter how we'll they
manage in other areas of Gov
ernment.
Involves Top Controversy.
Ways of maintining our eco
nomic health also involve just
about the most controversial
questions on the public scene to-
day. Policies in money and
credit matters point up the
sharpest differences between the
no-nonSense conservatism of the
new regime and the expansionist,
new horizons" approach of the
New Deal" and Fair Deal"
Republicans want the op-
portunity to prove their let-the-
market = place set the price
theory of economics can still
work to the best interests of the
economy. They started out to
prove it, and got a good way
down the road. There they were
turned back by problems of
financing the Government which
were unforeseen when they
started. The administration cur
rently is being forced, as we have
seen, to return to some of the
easy" money devices of the
Roosevelt and Truman regimes,
which earlier they had heartily
condemned.
1t remains to be seen how
these quick changes of pace and
direction will effect the Ameri-
can economy. and how soon the
Eisenhower administration will
be able to resume it's hard money
drive. It's political opponents
are carefully noting every move.
Critics Widely Distributed.
Critics of the new money pol
icy are concentrated generally
IN the liberal groups, including
organized labor, which supported
the Roosevelt and Truman adj
Kinistrations. But they also in
clude the Spokesmen for small
business interests and many
others. A goodly number of not
so-small businessmen, finding it
increasingly difficult to borrow
the money to finance their enter
pr1ses. are opposed to it, too. The
opponents include a stable part
OF Congress. The most voluble
critic in Congress of the admin
lStratlon'S proclaimed economic
aims is Representative Wright
Patman, Democrat, of Texas, a
longtime battler for small busi-
ness.
The administration may be
convinced that the arguments
employed by critics of their mon
etary policy are mistaken, but
they cannot deny their political
potency. The criticism which is
being leveled at the economics
OF the Eisenhower team run rem
orally along these lines:
1t is argued that this policy
will spin the country into de-
preston by halting the growth
OF business and industry which
is necessary to provide jobs for
the 100000 young people enter
ing the labor market every year.
Hard money advocates assume
that inflationary pressures in the
economy are stronger that the
def1ationary ones. The critics say
this was so some time ago, but
contend that it is no longer true
today. They point to the cur
rent dramatic slump of farm
prices, the drop in some metal
markets. an over-supply of con-
sumner goods including. perhaps,
automobiles. The opposition sees
these phenomena as evidence
that instead of restricting the
flow of money, the Government
should be increasing it.
Hits Small Business.
1t is argued that tight money
imposes particular, sometimes
ruinous. hardship on the small
business man. who generally op-
crates on small capital. The big
ger firms generally have the re-
sources to ride out an economic
storm.
Labor says that bankers are the
only ones who profit from high
interest rates. and labors friends
tend to view the hard money pol
icy as proof the bankers are now
running Washington.
All the critics point out that
rises in interest rates, although
not deliberately induced by Gov
ernment policy, preceded the
sharp recession of 1921 and the
great depression Of the early
1930s. They observe that the ef-
forts of the Federal Reserve to
halt the depression in those days
by turning on the money faucets
were unsuccessful. BY that time,
the country was in the tight grip