The Key West citizen. [volume] (Key West, Fla.) 1879-current, 1953-02-04
Eisenhower Will Try To Stabilize Dollar
By SAM DAWSON

| NEW YORK R-PreSldent Eli
senhower is going 10 try some old
fashioned methods to make the
dollar stable and able to buy more
in the market place.
A change in United States fiscal
policy is outlined in his state of the
union message. The upcoming
switch will be from cheap money
to dear, from easy borrowing to
tight money, from low interest
rates to reward for thrift.
Prices are to be established In
the market place rather than in a
Washington office. Wages are to be
settled by negotiation between
worker and boss.
Inflation-or too sudden deflation
will be combatted 'by relying
largely on the effective use of
sound fiscal and monetary policy,
and upon the natural workings of
economic law" the President says.
He promises the changes will be
gradual-no jars to the economy.
But the change from the fiscal and
economic policies of the last 20
Years would be great.
Its effect on everyday life could,
in time, be very wide.
The change in fiscal policies will
be conferred in the related fields of
the public debt and the regulation
of credit.
The President expects his treas
ury department and the federal
reserve banks to work together
and not against each other as they
have at times in the past. They are
to stabilize the dollar and bring
an end to planned initiation" the
Presidents words.
The policies they are going to
follow are already indicated. The
federal reserve has been slowly
raising interest rates and putting
the commercial banks on notice
that the federal reserve won't sup
ply them with all the money they
want, as in the past, to expand
credit and increase the money sup
ply.
The treasury also is raising the
interest rates it viii pay when il
ENTHUSIASTICALLY the end of the
cheap money era. Critics of past
administrations have called the
cheap money policy the foundation
from which initiation sprung.
The huge floating federal debt
the short-term government securi-
ties sometimes used in the past by
banks to increase the supply OF
money, to finance business expan-
sion and the speculative carrying
of inventories--is to be curtailed.
The financial district thinks that
the treasury will offer before the
end of this year marketable bonds
maturing beyond 19T2-when the
last of. the existing marketable
bonds win have come due. II ex-
poets the treasury to offer interest
rates in the 3 to Ss4 per cent range.
Previously the treasury has held
TO pa per cent as its upper limit.
There is agitation for the raising
Of interest charges on home mort.
cages.
| Commercial bankers say they
don't plan now to raise the interest
they charge their business borrow
ers with the best credit rating
above the present prime rate Of
per cent.
But many bankers may be hard
to convince that yoa are . prime
risk when the seasonal rise in de.
mand for business Ioaas comes
along in the spring. So businessmen
may find II harder TO borrow mon
ey, and may pay a little more for
IL
| A tight fiscal policy. in time. ha.
is effects 90 prices Of goods. Bark.
lers contend that il interest rates
had been raised high enough a
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