Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-04-09
Hard money Policy
Blamed for Downturn
By Economic Study
By Jones Y. Newton

Administration monetary poll
cies of a year ago helped bring
on the present economic recess
sion. the Public Affairs Institute
said today in a report on 1.-THE
Hard Money Crusade"
The report pointed out that
Immediately upon taking Office.
the administration, declaring the
real threat to the economy was
still imitation, began taking steps |
to raise interest rates and con-
tract money supply. These &C
tons were taken by the Treasury
Department and the Federal Re
serve Board
GAS a result" the study con-
tinued, during the first six
months of 1858. there occurred
a succession of widespread and
dramatic increases in interest
rates unparalleled in recent his
tory. We have seen an equally
historic change in credit policy
from one favoring business &C
commodation to one in which
credit was steadily frightened and
rationed to the highest bidders"
Actually, the institute report
said, infationary forces had sub
sided year before and prices
were already stabilized when the
administrations drive for the
sound" dollar began. There
were indications that deflation
or recession was the real threat.
About the middle of last year,
Federal money managers real
ICED this and the hard money
policy was relaxed.
Interest Ceiling Urged.
The report recommends that
Congress set ceilings on intrest
paid on all Federal securities
issues, and on loans made or
guaranteed by the Government.
This, it was said, would assure
that Federal debt management
and credit policies will promote
the maximum employment and
purchasing power" objective of
the Employment Act of 1916.
The 175-page report was pre-
pared by Bertram Gross. former
executive secretary of the Coun-
Gil of Economic Advisers. and
Wilfred Lumer, of the institute
staff.
Meanwhile. top officials of the
Go United Steelworkers called
on President Eisenhower to take
emergency action Immediately
designed to halt the business
downturn.
After a conference with the
President. David j. Mcdonald,
president of the steelWorkerS,
said that 446,000 members, or
40 per cent of the union, were
either unemployed or working
part time. He placed the num-
Der of jobless at 10000 and
those working less than 40 hours
a week at PSI, 1000,
MIR. Mcdonald said in trips
through steel plants he had
talked with hundreds of steel
workers and steel management
people and he saw no signs OF a
business pick up. He commented
that Gen. Eisenhower was not as
"pessimistic" as he was The
President has indicated the be-
lief the country was pulling out
Of recession
1.-THE problem is. Mr.. McDon-
aid said, that many Of the I'M
employed are running out OF
compensation payments and are
dead broke"
Four Point Program.
The program the group urged |
Gen. Eisenhower to adopt was
approved by the unions Execu-
tive Board It would:
/. Increase benefit payments
to the unemployed and to PEN
sioners under the Social Security
Act by at least SO billion.
2. Raise the personal Federal
income tax exemption from $500 |
to $500. adding 81 billion to con-
sumner purchasing power.
3. Expand the program of Fed
eral public workers by at least |
SIS billion.
4. Increase by SIS billion a year |
national home construction and |
slum clearance program.