Evening star., 1955-01-20


port to Congress which stressed
prospects for continued eco
nomic expansion this year.
The report also predicted that
with wise national management
the Nation can increase It's pro-
duction to a $500 -billion-a-year
level within a decade, compared
with the present $3.50 billion a
year.
Mr.. Eisenhower reported that
the Nations economy now is in
the process of vigorous recovery
from a mild and brief" recess
sion last year.
Saying that business may be
expected Ito continue to i'm
prove" this year, he laid down
the policy that the Government
should try to foster long term
growth rather than promote
more Of an immediate upward
thrust to economic activity.
More Positive on Tax Cuts.
The President was much more
positive In his discussion today
Of tax-cut prospects for next
year than he had been in his
state-of-the- Union or budget
messages to Congress. He spoke
In those messages of "hope" that
more tax cuts will be possible
next year.
Today, he said taxes still are
Q heavy burden" on the econo-
my and added:
Lower taxes would tend to
encourage work, promote more
efficient business practices and
create more jobs through new
investments. Fortunately, with
our economy continuing to ex-
pand, we can look forward to
larger Federal revenues from
existing tax rates.,
This, together with further
COOlOAL1Co III CAPCAh4tuu Coi
should mako possible next year
another step in the reduction
of taxes.
Congress might then consider
enacting a general. though mod
est, reduction In taxes and, at
the same time, continue the pro-
gram which was begun last year
of reducing barriers to the free
flow Of funds into sk-taking
and job-creating investments"
No Tax Cuts This Year.
Mr.. Eisenhower warned again
that no tax reductions should
be made this year. and repeated
recommendations for continuing
corporate income and excise
taxes at present rates instead
of permitting an automatic low
ering to go into effect April /.
His forecast of continued
economic expansion was hedged
with some caution.
While asserting that many
factors favor a continuation OF
our vigorous economic growth, .
the President said it is well To
keep in mind that there is
no way of lifting more than a
corner of the veil that separates
the present from the future"
He added that 1t is impossible
to say with great assurance just
how long the current economic
expansion will continue or how
far it will carry. This uncer-
tainty, he said, requires that the
Government be prepared ito ad-
Just its policies promptly II econ-
omic events should not bear out
current expectations"
His report recognized the pos
sible threat Of labor disputes
upsetting the economy.
History tells u.s." his report
said, that industrial disputes
have usually been more frequent
in periods of expansion than In
periods of contraction, and that
Industrial disputes sometimes
have serious economic repercus-
sions."
Warning on Speculation.
Mr.. Eisenhower also had q
word Of warning about lettins
the stock market get out Of
hand.
''It is essential to keep q Gloss
watch on financial develop
ments," he said. Continued
economic recovery must not bt
jeopardized by overemphasis oi
speculative activity"
His report laid down q "basit
policy" that Government activity
tSee ECONOMIC. Page A-4)
4