TEN MEC FORD (OHEGOrT) MAIL TBIBUTTT
Monday. Augul 27. 1SJ8
Fears of Many Over Economic Policy of
Eisenhower Administration Now Quelled
By A. ROBERT SMITH
Mail Tribuna Correspondent
(Editor's note: This is the first
In series of articles analyzing
the record of the Eisenhower ad
ministration. It is based largely
on a detailed analysis made by
the New York Times, an inde
pendent newspaper.)
Washington When Presi
dent Eisenhower led the first
Republican administration In 20
years into of
fice in Janu
a r y, 1953
many Ameri
cans with long
memories o f
the Great De
pression which
began in the
Hoover admin
istration were
A. Bobt. bmiui plain scared-
about their bread and butter,
Today, near the close of the
Eisenhower a d m 1 n i stration's
four year term, most are scared
no longer and they have more
bread and butter.
That says a great deal and
symbolizes the single greatest
triumph of the Eisenhower eco
nomic policy. But it by no means
says that all the key aims of
that policy were achieved. The
Eisenhower economic policy con
tained these three principle aims:
1. Get the government out of
business leave economic decis
ion-making to managers of pri
vate business, reducing the con
trols of the federal government.
2. Balance the federal budget
and cut taxes achieve this by
reducing government spending
and adopting tax laws designed
to encourage private investment.
3. Maintain full employment
without inflation use govern
ment power to curb both boom
and bust tendencies in the eco
nomic cycle.
Whenthe new GOP adminis
tration came into office, it
promptly frightened many by
adopting the tightest credit
squeeze since the 1920s, driving
interest rates to their highest
level In three decades. The Sen
ate soon rang with dire predic
tions from Democrats that "hard
money" was going to ruin the
country once again under Re
publican leadership.
Changes Adopted
When the country nosed to
ward a recession late that year,
the administration adopted
changes in its monetary eco
nomic policy which proved to
many that the president's fiscal
advisors were as different from
the "Wall Street crowd" of the
1920s as, say. Eisenhower Is dif
ferent from Warren G. Harding.
The changes were to switch to
an "easy money policy which
loosened credit through the Fed
eral Reserve system, and to fore
go any plan to balance the fed
eral budget the first year, there
by using the government to in
ject more money into the econ
omy than was being taken out
by taxation.
The fact that a Republican
administration was willing to
use deficit spending (the deficit
that year was $4.2 billion) one
of the bogeymen which Old
Guard Republicans in congress
had long attacked during the
past Democratic administrations
as sound economic policy un
der the circumstances, indicated
a new GOP attitude.
As a result, the recession last
ed six months, leveled off for
four more months, and then the
economy galloped into the great
est boom in the country's his
tory. The administration ended
price and wage controls, using
credit controls to keep a rein
on inflation. Prices now are at
a record high, but only about
one per cent above their level
when the administration took of
fice. Otherwise, not much gov
ernment intervention has been
changed from the past, but the
administration ha sought to re
sist any new incursions into the
business field.
National Debt Increased
Because it used deficit spend
ing to knock the 1953 recession
in the head, the budget re
mained out of balance until this
1956 fiscal year. Thus the na
tional debt has been increased
instead of being reduced during
the Eisenhower administration.
Taxes were cut in 1954 first
through a Democratic-sponsored
excise tax reduction bill; then
by a GOP bill which granted
relief to stockholders and to
business for depreciation and
by other devices. This latter
measure represented the major
Republican drive to implement
its election pledge to reform
taxes to stimulate the economy.
While it was attacked as illus
trating the "trickle down"
theory of granting relief to busi
ness and letting it trickle down
to the consumer and wage earn
er, enactment of this tax meas
ure has been followed by un
precedented investment in new
industrial plants and equip
ment. The pledge to reduce govern
ment spending was aided by the
end of the Korean war, which
permitted a reduction in the
defense budget. But the admin
istration has been unable to meet
its pre-election goal of a $60
billion budget. In the past fiscal
year, spending topped S66 bil
lion. Spending for civilian func
tions of the government has
reached its highest level in his
tory under this administration,
and with a big new federal high
way program about to start, it
can go nowhere but upward
Foreign aid shows no sign of
declining, and defense spending
is on the rise once more.
On the whole, despite some
relief for individuals and busi
ness, taxes have not been cut
nearly so much as the Eisenhow
er administration hoped and ex
pected when it took office. The
basic reason is that it found it
could not cut federal 'spending
as much as expected; for run
ning the U. S. government in the
1950s is just plain expensive.
Subsidies Extended
While this administration has
not launched a broad program
of public works to stimulate the
economy into its present boom,
it has nevertheless continued and
extended federal subsidies of
many sorts on a broad scale. It
has: Used the method of stock
piling strategic materials to prop
up the price of many domestical
ly produced metals, such as lead
and zinc. Continued price sup
ports on as many farm commod
ities, although at lower levels,
as was the case in 1952 under
the Truman administration. Com
mitted government subsidies of
the most generous sort to start
a record shipbuilding program
for peacetime. And added new
programs of government partici
pation, such as aid to economic
ally distressed, areas and fed
eral flood insurance. It, also,
had proposed federal aid to edu
cation, but legislation to enact
it was defeated in Congress.
The major soft spot in the
economy today is down on the
farm where prices for agricul
tural commodities have declined
a benefit to urban consumers,
but detrimental to rural grow
ers. This will be covered in a
subsequent article.
On the whole, the Eisenhower
administration has taken a prag
matic approach to define and
guide the role of government in
the national economy. The re
sult is an economy prosperous
beyond all previous measure,
but otherwise not much differ
ent from the structure that many
Republicans once thought was
a Frankenstein monster. Big
government not only proved
tough to cut down, but rather
useful
Reserpine Now in
Radioactive Form
Chicago flJ.R) Argonne Na
tional Laboratory announced to
day it has produced reserpine,
the new tranquilizing drug, in
radio-active form.
Argonne said the "hot" drug
will be used in research at Co
lumbia university, where scien
tists hope to trace the drug's
chemical pathways throughout
the body.
"It is expected that these
studies will contribute import
ant medical information on the
use of this drug," the laboratory
said.
Reserpine is a derivitative of
the rauwolfia plant, a small
shrub with smooth leaves and
snake-like roots. In India, it has
been used for centuries for medi
cinal purposes.
In recent years the derivita
tive has been used in the treat
ment of mental and emotional
disorders.
The radioactive form of the
drug was produced by growing
the rauwolfia plant In an atmos
phere containing radioactive
(NEXT Attitude Toward Labor) carbon dioxide.
Suspect in Chicago
Slayings Cleared
Oakland, Calif. (U.R) Two
days of lie detector tests have
cleared Norvel DeGrove, 42-year-old
ex-convict, of any im
plication in the murder of three
Chicago boys last October.
Local law officers and three
Chicago policemen sent here to
question DeGrove said they
"agreed unanimously" that De
Grove was telling the truth when
he denied killing John Schuess
ler, 13, his brother, Anton Jr ,
11, and Robert Peterson, 14.
Connected With Offenses
However, they were convinced
the tests connected DeGrove
with two Midwest sex offenses.
DeGrove, a nurseryman in
Chicago at the time of the slay
ings, was arrested by the FBI
here Friday for unlawful flight
to avoid prosecution on charges
of raping an 8-year-old girl in
Elmwood Park, III., Jan. 24, and
kidnaping and molesting another
8-year-old girl in Angola, Ind.,
Mav 11.
The former convict may also
face charges here. Alameda
County Sheriff H. P. Gleason
said DeGrove has been identified
by a 9-year-old boy as the man
who molested him recently.
DeGrove has been working in
nearby San Leandro as a nur
seryman under the name of Carl
Newman. He was arrested Fri
day when he went to a used
car lot to complain about a car
he recently bought.
His employment here and in
Illinois as a garden worker made
him a major suspect in the slay
ing of the three young boys.
Traces of an insecticide used in
nurseries were found in the
scalp of the Peterson boy.
Another effort is being made
to make New York state's Thru
way even safer than it now is.
When fog, rain or bad road con
ditions are prevalent, red signs
will cover sections of the bad
stretch of road, informing mo
torists that their speed limit
must be reduced to 35 mph. The
normal speed limit is 60 mph.
Siassen Returns To
Disarmament Post
Washington (U.R) Harold
E. Stassen returned to his post
as presidential disarmament ad
viser today and refused to talk
about his abortive flyer into
vice presidential politics.
Stassen took a four-week leave
of absence July 30 to work full
time at dumping Vice President
Richard M. Nixon from the GOP
ticket. He failed, and ended up
seconding the nomination of the
man he had wanted to bounce.
Asked if he would do it all
over again, Stassen said with
smile, "I never speak of things
gone by."
Peter Lawford's Wife
Gives Birth To Daughter
Santa Monica, Calif. (U.R)
Actor Peter Lawford'a wife.
Patricia, was reported "doing
fine" today after the birth of a
daughter at St. John's hospital.
Mrs. Lawford, daughter of for
mer Ambassador Joseph P. Ken
nedy, gave birth to a six-pound,
nine-ounce daughter Saturday
night. The couple also has a ton.
3
BIG FREE
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Ramon Magsaysay,
Puerto Rican Win
Freedom Awards
New York (U.R) President
Ramon Hagsaysay of the Philip
pines and Gov. Luis Munoz
Marin of Puerto Rico are the
winners of the 1956 Freedom
House Awards, it was announced
today.
The announcement of the
awards was made by Whitney
North Seymour, Freedom House
chairman of the board, and Dr.
Harry D. Gideonse, president.
President Magsaysay will re
ceive the freedom award for
"teaching his people how to use
their newly gained freedom to
develop their greatest potentiali
ties, and demonstrating the-advantages
of the democratic way
of life in an area of the world
sorely beset by the forces of dic
tatorship," according to the cita
tion. j
Gov. Munoz will be given a
Freedom House 15th anniver- ,
sary plaque because "under his
guidance the people of a free
commonwealth have demon
strated the effectiveness of de
mocracy in an underdeveloped
country." The Puerto Rican gov
ernor was cited for his "dynamic
leadership and the creative tech
niques which are in a great
measure responsible for the '
striking progress of the Puerto j
Rican people toward a better
life."
The awards will be made at
the 15th 'annual dinner of Free
dom House on Oct. 7. President
Magsaysay will be represented
by U.N. Ambassador Carlos P.
Romulo of the Philippines.
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