Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-08-01
Patman States
Hearings on
Money Policy

Arguments about tight money
will share top billing with de-
bate over tax cuts in hearings
by the Senate House Economic
Committee next week.
Representative Patman,I
Democrat Of Texas. is chair
man Of the committee and a.
leader of those who favor easy
money policies.
He recently renewed his
charges that the Federal Re-
serve Board has slowed down
the economy's growth by re-
straining supplies of money and
credit. Such restraint tends to
push interest rates up. while
easy money policies aim at
holding rates down.
Federal Reserve Chairman
William McChesney Martin, jr.,
intends to pursue increasingly
tighter money policies as the
Federal budget deficit grows
larger.
His intention is pertinent to
the debate over whether tax
cuts are needed this year to
prevent a recession. Tax cuts
would increase the deficit.
Fears Martin Recession"
If the Federal Reserve goes
ahead and tightens credit when
the economy is tagging. Mr.
Patman has warned, the coun-
try may get hit by a Martin
recession"
Mr.. Patnan yesterday an
nounced that his committee
will hold hearings next week
on the state of the economy
generally and specifically on
tax, spending and monetary
policies to stimulate employ
ment and economic growth.
The hearings were suggested
by Republican members of the |
committee, and several Demo-
cratic members concurred.
The hearings will be open to
the public, unlike closed ses-
sions Of the House Ways and
Means Committee now under
way in the same general areas.
Both sets of hearings are de-
signed in large part to assess
the need for emergency tax re-
auctions. President Kennedy re-
portedly is leaning in favor of
tax cuts this year, because the /
economy has slowed down, but
he probably will propose action
only if he can obtain assurances
of prompt congressional ap-
proval.
Senator Humphrey. Demo-
crat of Minnesota, said today !
the administration is not going
to bow to Republican demands
that any tax cut be accom-
panied by spending reductions.
Senator Humphrey. assistant
Senate Democratic leader, said
Republican leaders are talking
nonsense when they contend
that expenditures should be
reduced to offset the revenue
loss If tax cuts are made to |
spur the economy.
House Republican Leader
Halleck Of Indiana and Senator
Hickenlooper of Iowa. chair
man Of the Senate Republican
Policy Committee, laid down
such a condition in separate
news conferences yesterday as
a prerequisite for G. o. P.
support.
Hits Tight Money
Mr.. Patman made it clear in
announcing the hearings that
he will hit hard at proposals
for tight money policies. One
of the questions the commit
tee will ask, he said, Is this:
Would the effects of a tax
cut be wiped out by changes
in monetary policies?"
The witness list will be as
sembled and announced later
this week. 1t was understood
the committee will invite testi-
mony by academic economists
and by administration officials
and Mr.. Martin. The hearings
tentatively are proposed to last
about one week.
The Commerce Department
disclosed another bit of bad
economic news yesterday, re-
porting that new orders re-
ceived by manufacturers de-
clined 2 per cent from May
to June, on a seasonably ad-
justed basis.
Orders for non-durable goods
were approximately unchanged.
the department said, but d 4
per cent drop for durable goods
pulled the total down. This de-
cline exceeds the departments
preliminary estimate of 3.5 per
cent.
New orders are a major in
dicator of future business
activity.