Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-05-03

that a worse domestic calamity
could scarcely befall the United
States than a great dislocatior
of business. finance and farming
This was true not alone be-
cause Of the personal hardships
and political upheaval 1t woulc
bring but because economic dis.
aster in America would be a tor
pedo rammed under the free
worlds defenses against commu.
nism.
So when pallor appeared in the
national economy toward the au.
tumn of 1858, the White House
meetings swiftly became pre-.
occupied with diagnostic finding.
and remedial measures for what
was recognized as a development
of possibly grave import. Fol
months thereafter an anxiou!
= temperature taking went on il
cabinet sessions as the patient
got sicker, then held his own, anc
finally, by July. 1854, successfully
passed the crisis.
When the administration took
Office. imitation caused by the
economic boom of the Korean
war was the bugaboo. First, Sec
rotary Of the Treasury Humphrey
moved to tighten credit with q
so-called hard money policy
Then the administration discov.
cred that the danger that loomec
was deflation rather than in.
f1ation.
Case History of Recession
Here are highlights from the
case history of the recession as
the administration experts dag
nosed and prescribed for the all
ing economy:
Sept. rs, 1853. Cabinet meet
ing: DR.. Arthur F. Burns, chair
man Of the Presidents Council
Of Economic Advisers, noted these
warning symptoms: /. A decline
in the stock market. 2. An in
crease in business failures. 8. A
dropping off In the volume OF
orders for durable goods. 4. A
decline in residential building. S
A drop in the average length OF
the work week. 6. Sagging farm
prices. Z. Evidences of excessive
inventories.
? DR.. Burns said the situation
was not critical. Strength was
reflected in such things as the
economy's ability to withstand
the recent hard money" credit
squeeze, the favorable distribu-
ton Of income among the people
and the basic soundness of the
inventory situation. Legislation
was under study, he reported, for
helping private business, tax re-
duction and Government pro-
grams emphasizing loans rather
than Government construction
itself.
Jan. IL, 1854: Walter Reuther,
then president of the CLIO wrote
to the President urging him to
call national conference on un-
employment. saying that in the
Detroit area 100000 workers had
been laid off.
(Mr. Reuther failed to persu-
ade the President, but the labor
leader himself called the con-
ference in the spring. Meanwhile,
week after week Republican
legislators reported to Mr.. Eisen-
hover that Congress and the
country were worried. A con-
gresSional election was only a
few months away
Humphrey Gives View
Jan. Is, 1854. Cabinet meet.
ing: Treasury Secretary Hum
phrey said 1t was his opinion that
prosperity depended more upon
the confidence of all the people
than upon any particular Gov
eminent measures other than
removal of impediments to in
dividual initiative. The President
replied that he wished to avoid
false expressions of confidence
such, as were proclaimed in
1929, and the wanted to refrain
from any suggestion that the
Government was unable to act
positively to strengthen the
economy.
Feb. 5, 1854. Cabinet meeting:
The President informed the cab
met that he had asked DR.. Burns
to coordinate reports from the
various epartmen ts and
agencies on their plans for pub
lie works projects. saying it was
essential to have planning ad-
vanced enough to insure that
men would be put to work quick
ly. He set July as a tentative
date for the Government to be
prepared to act.
Secretary Humphrey said a
broad public works program
would be desirable if operations
then IN progress should fail to
turn the tide. But he felt these
operations might very well
succeed.
Feb. IL, 1854. Confidential
White House briefing: On the
basis Of facts available, DR.. Burns
said, the Government was now
justified in taking action to
strengthen the economy but not
to launch a program to fight a
real depression.
Unemployment Worsens
March IL, 1854. Cabinet meet
ing: The President was in deadly
serious mood. The unemployment
situation had worsened. The fig
ure in March was 3,725,00O un-
employed, or So per cent of the
entire civilian labor force. (The
fact that unemployment was
then at the crest was not known
on this date.) Mr.. Eisenhower
complained that plans were
ready but when one came to look
for recommendations as to when