Milford chronicle., 1957-08-30
NO. l ISSUE IN EUROPE

The number one issue in Europe and the
key problem affecting the future peace in
central Europe is the question of German
unifcation. Eventually this question will
have to be settled, one way or the other.
The Communists still hold eighteen mil
lion Germans in bondage in East Germany
and refuse to allow them to vote in all-Ger-
man free elections. Luckily, West Germany
contains some fifty million Germans-many
more than are in East Germany.
And while that is fortunate, enabling the
democratic Germany to be in position to
vote majority in any free election, in favor
of really independent country and govern
ment, it is also the reason the Communists
are so afraid of free elections in all Germ
any.
Chancellor Konrad Adenauer, eighty
years old, has staked his government on the
policy that a strong West Germany, demand
ing the return of East Germany, or at least
free elections, backed up by the western
Democracies, will eventually force the Com
munists to agree to elections.
The Communists have refused so far to
come to any such terms. And there is a di-
vision in West Germany. The Social Demo-
Gratis claim that the only hope for unifcation
is in breaking West Germany's alliances
with the West and negotiating with the Rus
slams.
Adenauer's political future and the fate
of the West German government hang in the
balance in the approaching German election.
The entire western world has a high stake
in the September voting in West Germany
now the strongest power in central Europe.
If the Social Democrats win, Bonn may
break its alliance with the West and try to
bring about unification by negotiating with
Moscow. This could be a fatal blow to the
strength of the western alliance and NATO.
INTEREST UP AGAIN
The Federal Reserve Board recently an
nounced it had raised its discount rates at
four Federal Reserve Banks from three to
three and half percent. Reserve Banks in
Philadelphia, Chicago, Minneapolis and
KanSas City were affected.
The last increase III the discount rate was
made about year ago, when it was raised
from two and three-fourths to three per cent
in ten Of the country's twelve reserve banks.
The idea, according to Government spokes-
men, is to discourage banks from borrowing
from the Federal Reserve banks. This is ex-
pected to hold down the amount of money
they are able to obtain for loans.
At the same time this was announced,
Under Secretary of the Treasury w. Ran
dolph Burgess said Government savings
bonds were going to have hard going If mon
ey borrowings remain scarce and interest
rates kept going up.
burgess IllSuC nlo OttlOCAhCHO az a OChdOC
Finance committee hearing. He was being
questioned about the possibility that bond
sales would not hold up in the current period
of rapidly-rising interest rates.
Burgess warning that Government bonds
might be in for rough shedding is a timely
one Not only Government bonds, but home
building and construction, and in other
fields in which borrowing is necessary, plus
capital expansion, all might suffer as a re-
suit of the SteeDly-inclinp interest rates
example, are down greatly as a result of the
Administrations tight money poiicy--hav-
ing dropped from more than 250,000 in the
first half of 1856 to under 10000 in the
same period of 1957-the tragic effect of
tight money policies is evident.
N&&@%%