Evening star. [volume] (Washington, D.C.) 1854-1972, 1957-06-18
Continued from First Page


serve Board and the administra-
tons fiscal policies have been
designed to encourage the sup
ply Of goods but not to encourage
excessive credit expansion.
THE cost of living has risen
an average of only six-tenths of
/ per cent a year for the past
four years, as compared with an
average increase at the rate of
about z per cent per year for the
preceding Is years" Mr.. Hum
phrey said. I'm short, the rise
in prices during this administra-
ton has been at only one-tenth
the average annual rate of the
preceding Is years.
Serious Problem
Even This rise is more than
/ like to see, but it is a record Of
far better price stability than in
many years. Nevertheless,
faster for the past IL months.
and the threat of renewed infia-
ton, which has beenss so severe
from 1916 to 1852, is perhaps our
most serious domestic economic
problem"
Noting complaints about in
creased interest rates, Mr.. Hum
phrey described as nonsense"
the criticism that high interest
rates benefit only bankers.
He said that increased interest
rates have encouraged greater
savings and increased savings
are "a major means of assuring
continued high employment and
prosperity"
HardshipS Denied
The Secretary disputed claims
that the increased interest rates
have worked undue hardships on
small business. home purchases
and State and local governments
seeking to borrow money.
AS for financing of the Fed
eral Government, Secretary
Humphrey acknowledged this
has subjected the Treasury to
certain burdens" and that lend
ing institutions are not "clamor-
ing for long-term. even interme-
date term, Government securi-
ties" AS a result, the Secretary
said. the Treasury must sell
mostly shorter term securities.
Mr.. Humphrey said emphati-
cally that the Treasury faces no
crisis" as some critics have con-
tended and added:
Our securities are the most
highly regarded in the world.
But in a free Market we must
compete for funds. That means
the factors of supply and demand
determine the rates We must
pay"
Opposes Higher Rates
The Secretary said interest
rates may decline or may 60
higher and then added:
i would be disappointed to
see them go higher, but if that
is the price we must pay to pre-
vent the growth of excessive
credit and consequent imitation,
it will well justify the price"
Secretary Humphrey, while
emphasizing the relative price
stability during the last four
years, said imitation is not
stopped. but only slowed down"
PresSures Renewed
Indeed, there has been a dis
turbing renewal of pressures in
the last IL months during which
the dollar has lost almost 2
cents in purchasing power" Mr..
Humphrey said.
This most recent decline in
purchasing power is disturbing.
It reinforces our conviction that
We must continue the vigorous
pursuit of our present policies.
We should certainly not aban-
don them"
Senator Byrd said the inquiry
will undertake to pinpoint the
causes of the new imitation and
find the remedy before the
consequences become disastrous. 4"
THE squeeze of this imitation,
even at this point" Senator Byrd
said. sis being felt seriously by
individuals of fixed incomes, and
in businesses which cannot pass
on inflated costs. The cost Of liv-
ing has increased steadily for
eight consecutive months"
Pointing out that responsible
ity for sound currency is "a
prime responsibility" of the GEN.
trail government, Senator Byrd
added:
yet the value Of the Ameri-
can dollar dropped more than Al
cents in IL years, between 1910
and 1852 Now it Is losing
value again. From April. 1856, to
April. 1857. 1t lost nearly 2 cents
and now it is worth 49.8 cents
as compared with the 1910 dol
lar. The indications are that in
f1ation is continuing. and per-
haps accelerating."
Senator Byrd said confidence
in the American dollar is 1.-THE
principal deterrent" to Russian
aggression.
The pages Of history detail
the stories of nations which have
been wrecked by unsound fiscal
policies and debased currencies,
the Senator continued. IF the
value Of the dollar continues to
drop at the rate of 2 cents a
year, as 1t has in the past year
1t will worth only rs cents in
IL years. as compared to the
1910 dollar"
The committees study. the
first full-dress inquiry OF this
kind since 1908. will undertake
to determine the soundness Of
the present prosperity as well
as what Senator Byrd described
as the possibility Of a recession
even though 1t may be a minor
one"
Fears Costly Miscue