Milford chronicle., 1956-01-06
FEDERAL, RESERVE BOARD SEES
THINGS ALRIGHT

The lob of the Federal Reserve Board IS 4
an exceedingly delicate One--as delicate as
It IS difficult and important. To q consider
able extent the Board has the power to
decide how much money shall be IN clrcula-
ton in this country, what that money shall
be used fOr-and how much that money snail
cost the borrower, in the form Cf interest
and discounts Thus it can either stimulate
spending or restrain it-with all the poss-
ible impacts on the economy either course
implies.
A short time ago the Boards chairman,
William MeChesney Martin, Jr., testified be-
fore Senate subcommittee He made it
clear that, in his view, the current boom
has not gotten out of hand-but that there
are some warning signs that spell the poss-
ibility of renewed imitation. Speaking OF
housing. for example, he said: ''We are con-
vinced that we're doing disservlce to house
holders and to the community collectively II
policies are pursued, however inadvertently,
which fail to recognize the pressures for
credit which make the pace go fast that the
mace cannot be sustained" He also SAID that
while every effort should be given to achlev-
ing the highest possible level of employment,
Imitation will not create JOBS Cnat can De
sustained, but, quite the contrary, will un-
dernine the stability of existing jobs and
will eventually probably create two unem-
ploved for one unemployed that might be
there if we had more reasonable pace OF
endeavor" It is evident throughout Mr..
Martins remarks that the Board is watch
ing developments in the field OF credit with
the utmost care.
Such DEVELOPMENTS and considerations as
! these will have a potent influence on the
economic state of the nation in the year we
are now beginning They are given full con-
sideration in a forecast OF what 1856 Will
probably bring, which appears in U. S. News
/ and World Report of DeceL.ber 3.
The articles begins: "An records for
spending are likely to be broken in 1856
After a rapid rise in 1855, the total OF
spending will average still higher in the
year ahead.
'eThe pattern and direction of that spend
ing, however, probably will change.
The principal fields in which declines are
anticipated, the report goes on, are automO
bile sales and residential constructions
at least in part, to tighter credit. That, ob
viously, will leave more money in the hands
of consumers for other things-everyda.
living things, such as clothing and food |
IS also believed that there will be mucl
7 more spending for vacations, travel, an'
! various other desired services.
Total 1856 spending (Which is fOrmalE
I known as the gross national product) is pu
at 1892, 400, 900, 900 by u. s. News, as com
pared with an estimated S387, 100000
: for 1855 Currently, spending is running q
t close to the OO,OOO,O0O, 600 a year rate, bu
: it isn't expected that this will be maintained
: It's interesting to note who will do tn
7 spending, and in what amounts Individual
& the III. 81 News forecast says, viii accouT
5 for S258, 100000 0,000-well over 1853. Bus
E mess will spend S56,6OO,OOO,O0O II unde
e 1855. Government will enter the picture
5 the tune Of S77, ,0OO, ,0OO, ,OOO-the same fgul
as in 1854, but some S1,400,000,000 aboy
2 1855.
4 $500