THE ECONOMY OF AMERICA

Press, Volume LXXXIV, Issue 25390, 13 January 1948, Page 8

THE ECONOMY OF AMERICA

ADVISERS REPORT TO PRESIDENT “INFLATIONARY DANGERS” NEW YORK, January 6. Congress passed a law in 1946 establishing the Council of Economic Advisers—three men (Messrs Edwin G. Nourse. Leon H. Keyserling, and John D. Clark), who are to advise the President on what the United States should do to avoid economic trouble, says the New York “Herald-Tribune.” Issuing its second annual report to the President recently the council showed uneasiness about the way things are going.

The report took note of the fact that the United States has just about reached the “idealised figure” of 60,000.000 jobs. Production, too, is near a maximum. Yet America is confronted with “inflationary dangers.” The country’s economy is out of balance, the council thought, and vigorous steps should be taken this year to correct the imbalance.

The present high level of employment and production may continue through 1948 or longer on the present “somewhat artificial props”—namely, high military expenditures, foreign aid. and war-time backlogs of orders. But then the question becomes, in the Words of the council’s report: “Will our present economic problems—inflation, high cost of living, threatened recession, and all the rest —be solved merely by ‘production, more production, and still more production’? Or may full production, in catching up with the market demand, force disastrous- price breaks, result in production cutbacks, and thus prove to be its own undoing?” The council felt that ever-increasing production was not sufficient in itself to prevent another depression, and t.iat a better equilibrium of the country s economy mqst be attained. In attaining it, “many industrial prices must come down . . . many rates of profits must subside, while reasonable profitability is established in other areas. Gross imbalances in the wage structure must be rectified by some drawing together of those now at opposite extremes of the wage scale. Bet-' ter balances of income afhong sections, groups and individuals must be at-

« + ? ea J- ? rice competition, instead of the highest price that the traffic will b ® ar - u^° uld _ be 3 bi S bel P. the council SSfif v?* stood firm for the present ei„nt-hour day and five-day week, onE,??Jl g . t 5 e , busi f ess leaders who have “ ug £ este d lengthening the work week to 44 or 48 hours.