Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-07-01

scribe new medicine in the
form Of q prompt tax cut.
ssOfficials acknowledge that
the stock markets sinking spell
dealt more than a psychology
cal. blow to the recovery. The
loss of perhaps $50 billion in
stock values in the past six
months Is a real shrinkage Of
buying and investing power.
= Experts are trying to decide
whether the 16-month-old re-
covery, never really booming,
has enough underlying strength
TO throw off the blight of
Black Monday-the May %
stock market collapse.
The experts don't agree.
In an unprecedented switch,
the United States Chamber of
Commerce, Friday, asked for an
immediate tax reduction even
though the Federal budget is
running In the red.
o.. To Spur Economy
o.
The chamber said taxes
should be cut by from SIS bill
lion to SIS billion at once as
Q spur to the economy, and
with emphasis on the top per-
sonal and corporate tax rates.
President Kennedy was re-
ported holding to the belief
that the time for tax reduction
has not yet arrived-but to be
thinking in terms Of a SOS bill
lion cut If convinced such &C
ton is needed to stimulate the
economy.
The calls for quick action
aren't coming exclusively from
business. There have been some !
from Kennedy associates in
Congress. AFL-CIO Vice Pres
tdent Walter P. Reuther has
urged q $i0-billion cut effec-
tive August 1, primarily in the
lower ana middle income
brackets.
Mr.. Kennedy has said he will
propose q reduction effective
next January /. He also has
said Q close watch is being
kept on the economy and that
be will recommend an earlier
reduction II this is deemed nee
essary.
The statistical reports show
Ing how the economy reacted
IN June won't be In hand for
another fortnight.
Evidence Appearing
But some wisps and shreds
Of evidence are available, and
economists find them reason
ably encouraging. For instance:
Steel production has leveled
OFF after 10 weeks of decline.
New claims for unemploy-
fnent compensation dropped to |
q rate matching the lowest in
three years.
Construction activity in June
hit~a new high. Private OUTLAWS
increased over May at nearly
double the usual rate. with
home building supplying most
Of the unexpected bounce.
Auto sales In the first half
Of June were down from May
but still running strong, a good
20 per cent above last year.
Booster Shot Due
The first Of Mr.. Kennedy's
planned booster shots is due
within 10 days or so. This Is
the Treasury's new scale Of de-
probation. allowances on ma
chinery and equipment, a tax
boon worth SIPS billion to big
and little businesses.
But Congress still is marking
time with Mr.. Kennedy's No. 2
booster-the investment tax
credit requested nearly a year
and q half ago-and the con-
fused legislative and political
climate seems less than ideal
for a rapid recovery Of business
confidence.
The Presidents Council of
Economic Advisers still clings
to its January forecast Of a
$3.50 billion production year,
but other Government and pri-
waite economists now expect
something less than $3.50 bill
lion. This would still be near
~ $40 billion above 1861 and
q new record. but definitely not
a boom.
These economists find most
Of the leading indicators
the business segments whose
rise or fall usually precedes the