Evening star. [volume], July 30, 1948, Image 9

About Evening star. [volume] (Washington, D.C.) 1854-1972

Image provided by: Library of Congress, Washington, DC

                
Truth About Inflation
Is Revealed in Eccles'
Warning to Truman
President's Power Held
Ample to Begin Moves
Toward Deflation
By David Lawrence
The truth about the Inflation
ary situation is alowly emerging,
and it isn’t a pleasant story.
The Federal Reserve Board last
January warned the President—
Marrlner Eccles, former chairman,
has now testified—that the boom
could be and should be controlled
and credit curbs applied but Mr.
Truman deleted the recommenda
tion from his message to Congress
and demoted Mr. Eccles.
Many people in Washington sus
pected this at the time. Basically
there was a substantial amount of
agreement with Mr. Eccles’ ideas
but every one knew also that a curb
on credit would start a depression
and perhaps a severe one.
This being a presidential year,
naturally the President and his ad
ministration didn’t want to start
deflation and bring on a depres
sion.
Powers Called Ample.
Mr. Truman has ample powers
now to set deflationary moves Into
operation. But he doesn’t want to
accept the responsibility for un
employment and bankruptcies that
may ensue. He presumably wants
the boom to continue during the
campaign while he seeks political
benefit at the polls for high wages
and high farm income but places
responsibility on the Republicans
for the high cost of lining.
The Republicans are going to
use their opportunities at the pres
ent session to bring out in public
hearings the failure of Mr. Truman
to use the control powers he al
ready has. What is the use, they
ask, of passing more legislation
when the President refuses to use
what powers he already possesses?
Mr. Eccles put a damper on
housing legislation—one of Mr.
Truman's pet projects. He pointed
out that easy credit for housing
was inflationary. It was causing a
shortage of building materials, the
prices for which were being bid
up by the artificial demand aris
ing from easy credit.
me rbepuuiiuuii& me p'»uuu«, w
the export controls already granted
by Congress to the President. Mr.
Truman hasn't used thos% con
trols for the simple reason that he j
doesn't want to start a depression i
before election anyway. Yet, apart j
from the Marshall Plan subsidy,;
exports are booming.
Mr. Truman's “anti-inflation”
proposals are going to be thoroughly
riddled before Congress gets through
with its 15-day session. The talk
of credit controls is already making
the financial markets somewhat un
easy. But the fact is that the bank
ers are strenuously opposed to any
increase in the reserve requirements
and favor instead a raising of the
rediscount rate. This, in turn, might
force commercial interest rates up
somewhat.
Argument on Rates.
The argument for increasing the
rediscount rate at which banks may
borrow from the Federal Reserve
System is that this power doesn't
require any legislation and that the
trouble with the credit structure is
that it is artificially sustained by
*l»XK>vernment itself. To the sug
gest** Jtlat-,* rise in rediscount
rates may resWfc in a falling of
rates on Government bonds because
these may be sold to get the funds
to meet a tighter credit situation,
the answer is made that the Gov
ernment itself can stabilize the bond
market and will do so.
The bankers feel that to increase
reserves may operate unevenly in
Impairing the Nation's lending sys
tem at a time when high inven
tories and payrolls require mostj
businesses to use more working cap
ital than ever before. Certainly the
whole credit situation is fraught;
with the greatest delicacy and itj
can be understood why. just before;
a national election, Mr. Truman j
doesn’t want to exercise any drastic!
powers he already has and yet
would like to blame the Republicans
for failing to give him more power.
The debate in Congress will bring
out a good many things that have
hitherto been more or less soft
pedalled about the credit situation.
Also it will focus attention on the
manner in which wage rises have
forced prices upward. It is sig
nificant that Mr. Truman’s recom
mendations on wage control are
limited to a few items that would
be placed under price ceilings. Ob
viously. unless there is comprehen
sive wage control, there cannot be
much influence in keeping prices
down. But again Mr. Truman!
doesn't want to appear as favoring
wage controls because he is anxious
to hold the labor-union vote. So5
it's just politics that is being played
now as the economic problems ofs
the Nation grow more and more;
complex.
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This Changing World *
Idea of Europe-Wide Settling of Issues
Called Illusory and Extremely Deceptive
By Constantin« Brown
The idea of a Europe-wide settle
ment of Issues between the East
and West and a conclusive end to
the cold war has now been Injected
Into the flood of
speculation and
more or less au
thoritative re
ports which sur
round the West
ern Allies’ next
approach to
Russia on the
Berlin blockade.
Foreign Sec
retary Bevin'i
statement to the
House of Com
mons yesterday
that the Moscow
conferences may
reveal what OeiwUntlne Brown,
chance there Is for an end to the
growing conflict between Russia and
the Western Allies was coupled
with the disclosure that Britain is
considering a halt to her demobili
zation program as a precaution in
case force becomes necessary.
The idea of a complete general
settlement with Russia is as in
triguing as it is fantastic at this
time. What Arm ground for lasting
world peace could be laid if be
tween Russia on one side and the
United States, Britain and France
on the other a Anal and deAnitive
settlement of all Issues could be
arranged!
Far From Reality.
What joy could properly be dis
played in every city of the world if
all peoples knew—and could be
sure—that henceforth no European
issues would raise the specter of a
new devastating conflict! The cele
bration could rival V-E day.
There is every reason for the
peoples of the world to desire and
seek a conclusive solution of East
West troubles in Europe. We all
want to get back to a normal world
in which our energies can be focused
on winning battles against the
enemies of all mankind, rather than
on winning battles against each
other.
Unfortunately, however, the idea
of a general European settlement
at this time is so far removed from
the’ realm of reality that it almost
seems like useless effort to assess the
chances of such*an occurrence.
In the first place, if the Western
Allies make the offer which has
been attributed to them it will be
for the ultimate purpose of merging
the German question into the
broader European question and
seeking to utilize the present crisis
over Berlin as a turning point for
the stalemate which grips all of
Europe.
This is not to imply any insin
cerity to the western governments,
for all of them want nothing more
than to be rid of the troubles which
plague them in Europe. If any pro
posal for a general settlement is
presented, it will be presented in all
good faith and with every desire to
arrive at such a settlement.
It will be difficult, however, for
political leaders in Washington.
London and Paris to make any such
proposal with the expectation that
it will be accepted, or if accepted
will be carried out in good faith.
The test of relations with the Soviet
Union must always be not in an
ticipation of Soviet performance
according to the Soviet word, not
in written agreements duly signed
and sealed, not in the assurances of
Soviet statesmen, but in what the
Soviet Union does or does not do.
Actions not words.
Even if we assumed the existence
of sincere desire on both sides to
arrive at a general European settle
ment, what would such a settlement
embrace? Germany with all its
facets—the issues of a central Ger
man government, German economic
revival, Soviet participation in the
Ruhr, and numerous others—is just
the most aggravating problem of all
at this moment.
Many Points of Conflict.
There are so many other points
of conflict: The Austrian peace
treaty, Greece, the presence of large
masses of Russian troops outside
Russia, Soviet maintenance of Com
munist fifth columns in all the
countries of Western Europe,
Trieste, the Danube, restoration of
free government in the satellite
states, and, near the top, the Mar
shall Plan.
The scope of a general settlement'
would have to be so broad that it j
must cover even such commonplace
things as hostile propaganda and'
some curb on the Soviet use of the
veto power in the United Nations. I
In short, a settlement for Europe, I
without a settlement everywhere:
else in the World, would be pretty
useless, for even if Europe could be
eliminated as a field of conflict be
tween the great powers, there would
remain Asia, which is also a pow
der keg, if somewhat less potentially
destructive.
We must not look for tangible re
sults, however, along the line of a
complete settlement of European
issues so much as a settlement of
the immediate crisis in Berlin and
then a progressive rapprochement
which will lay the foundation for
an ultimate settlement of Issues.
It simply is not possible to leap
at once from a condition which ap
proximates armed conflict to a full
fledged condition of peace between
East and West. Any such "settle
ment” would be illusory and ex
tremely deceptive.
The foundations for a general set
tlement can be laid, but they must
be laid first through the lifting of
the Russian blockade in Berlin, then
a series of conciliatory developments
to restore true four-power govern
ment to Berlin, subsequently a re
sumption of the question of a Ger
man peace treaty in the Council of
Foreign Ministers and finally, pos
sibly as a part of those discussions,
the consideration of all Europe's
power-politics problems.
On the Record
Gradual and Expanding Tolerance Seen
As Only Way to Solve Raciarl Problems
By Dorothy Thompson
Reporting to UNESCO last week,
sight social scientists representing
six countries told of the results of
their study on "the causes of ten
sions that make _ _ ..... ......... »
for war.” They
said: “The prob
lem of peace Is
the problem ol
keeping group
and national
tensions within
manageable pro
portions.”
At the Wal
lace convention.
I began to doubt
whether racial
tensions would
be kept within
manageable pro
portions in the Dorothy Thompson.
United States. The Communists,
who furnish the guidance of the
Progressive Party, do not want peace
within the United States. They
want civil war to break our exter
nal power and force our withdrawal
from Europe and Asia. But it is
highly significant that the appeal of
the convention was far less to the
class struggle than to a racial strug
gle, with identification established
between minority racial groups and
social classes.
Thus, among the banners dis
played at Shibe Park, “end Jim
Crow” occupied equal space with
‘peace, security and freedom,” as
lid “full friendship with Israel.” The
relative preponderance of Negroes
In prestige positions in the con
vention either indicates that it “dis
criminated" against whites in choos
ing persons for prestige positions,
or that the Progressive Party's
membership is largely colored.
Reference* to 1860.
Leo Krzycki appeared not chiefly
as a labor leader, but from the
Communist-sympathizing American
Slav congress. Leo Isacson, the Pro
gressive Party's first congressman,
made a speech in which there was
such identification between the
United States and Israel as to make
the latter appear to be the 49th
State of the Union. There were, dur
ing the convention, numerous omi
nous references to 1860. And at Mr.
Wallace's press conference, where
he said that he would, if President,
end segregation in the United States
Army, a Negro asked twice whether
he would send Federal troops into
the South to end segregation and
Jim Crow.
This question Mr. Wallace dodged
as he dodged all questions of sub
stance, but the Negro journalist
had asked the critical question. For
segregation will not be ended in the
South by Federal edict. If either
armed force or other fanatical pres
sure is applied to enforce antisegre
gation, the South will revolt with
! consequences to the colored popu
lation which I shudder to contem
plate. Also, tensions between the
States and racial groups within the
States will reach “unmanageable
proportions.”
I am not here saying what
“should” happen. I am analysing
and predicting the results of a pos
sible policy. The ideologists who
fanatically commit themselves to
what they believe ought to be, dis
regarding all reality, do not ask
themselves which is worse: Segre
gation or civil war?
Klan It Rising Again.
The great campaigns against
social discrimination in the United
States and the tendency of minority
racial groups to Identify the Nation
al Interest with their own, are noi
mitigating but exacerbating ten
sions. The Klan is rising again
with the ugliest visage in years.
There is more anti-Negro feeling
in the North and more suppressed
antisemitism in the Nation than I
ever have known in my lifetime.
For where racial or religious
sympathies or antipathies are con
cerned, the forces engaged are
emotional and irrational, with roots
twisted all through the unconscious
mind and capable, therefore, of
producing the most explosive reac
tions.
Discrimination is a phase of hu
man nature not confined to any
group. If Gentiles discriminate;
against Jews, so do Jews against :
Gentiles; and so do Negroes—when
the opportunity is given—as in the
reconstruction era, against whites.1
Jewish Zionists vilify non-Zionist
Jews, and antisemitism flourishes
among the colored.
The racial problems of such a
heterogeneous nation as ours cannot ’
be “solved” except by gradually ex
panding tolerance over great per
iods of time. We have to live with
them, as we have to live with all
our real problems—each of us, of
whatever race, bearing his share
of the burden, with as much justice,
mercy arid humor of which he is
capable. Unroll the whole issue
of race and religious prejudice in
an attempt at a radical solution and.
instead of brotherly love, you will
promote hate; instead of social
peace, civil war; instead of mercy,
persecution; and instead of justice,
revenge.
LOU IE —By Harry Hanan
tUL
Last of Old Bosses .
Grump’s Primary Fight Endangers v
Democratic Prospects in Tennessee
By Doris Fleeson
Everything has to happen to
Harry Truman.
Real primary challenges have
been hurled at the last of the old
fashioned bosses, Ed Crump of
Memphis, and
the aging tyrant
has responded
with a violence
a nd spleen
which endanger
Demo cratic
pros p e c t s in
Tennessee this
fall.
President Tru
man, the inno
cent bystander,
can't afford to
lose a border
State. He is al
ready burdened
going into mem "*“*
with hi* unpopular civil right* pro
gram; a Crump defection would be
extremely serious for him.
Bos* Crump’* last stand particu
larly irks party leaders who are
making a formidable bid to regain
control of the Senate no matter
what befalls the President. Six
Republican incumbents are in trou
ble and Republicans hold the Senate
by only four.
G. O. P. Ready With Money.
Republicans are prepared to pour
money anl effort, perhaps even their
presidential candidate, into Tennes
see if Mr. Crump is beaten and
revengeful, which now appears
probable.
Mr. Crump’s challengers s^re Gor
don Browning, a former Governor,
and Representative Estes Kefauver,
a young pro-Roosevelt Southerner
and TV A champion whose liberal
ism excludes civil rights. Mr.
Browning seeks to unseat the
Crump procdhsul, Governor Jim
McCord, and Representative Ke
fauver Jumped into the Senate race
when Mr. Crump abandoned the in-'
cumbent Senator Stewart, who seeks
re-election.
Mr. Crump’s hand-picked sena
torial substitute, Judge John Mitch
ell, has been running a poor third
in current polls, with Representative
Kefauver and Senator Stewart in a
close race. This has led to uncon
firmed rumors that Mr. Crump,
whose first and pet hates are Messrs.
Kefauver and Browning, la about to
switch to Senator Stewart.
The Senator has been campaign
ing on the debatable ground that he
was a loyal henchman who didn’t
deserve to be treated so mean
Washington will confirm that no re
bellious taint mars his record here;
for ten years he has just gone along
with his party.
Stormy Campaign On.
The campaign has been loud, per
sonal and stormy. In expensive ad
vertisements, Mr. Crump has tried
his favorite tack of pinning the
names of animals on the objects of
his scorn in the effort to annihilate
them by ridicule. Mr. Browning
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msmmmsssssmsmm OMICIS COAST TO COAST
and Representative Kefauver have
thrown caution to the winds and
returned the ridicule in kind.
But Mr. Crump’s ace is the 105,
000 registered voters he claims to
control in Shelby County (Mem
phis). Somehow the Crump candi
dates, no matter how far behind
they are when they reach the Crump
domain, always pick up majorities
there, and the big city, by another
happy coincidence, is always counted
last.
The Kefauver-Brownlng camps
will make unusual efforts to be
present in force when those votes
are counted in this primary,
August 6.
The Republican who hopes to be
the major beneficiary of the Dem
ocratic wrangle is ex-National
Chairman Carroll Reece. Mr. Reece
leads in the Republican senatorial
primary and he has already ex
pressed confidence that Mr. Crump
will support him if Representative
Kefauver is nominated.
A Taft man, Mr. Reece lost his
job when Oov. Dewey triumphed at
Philadelphia. This was a gloomy
business for the Reeces, who have a
private fortune and Potomac fever.
They can be expected to capitalize
to the utmost on any Crump dis
affection.
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McLemore—
Discovers Turks *
Like Fat Cats
By Henry McLemore
ISTANBUL, Turkey.—It so hap
pens that Turkish is one of the
many languages which I do not
speak fluently.
It is amazing
how few South
Georgia gram
mar schools
teach Turkish.
Reading, writ
ing, arithmetic
— sure — but
Turkish, nuhuh.
Yet, since ar
riving in Istan
bul, I have over
come the lan
g u a g e barrier
with great ease.
I know now
tnat li i say mi
a waiter, “Sioux ■«" M.Uwore.
City Sue,” he will bring me a glass
of ice water. And if I say. “Tommy
Harmon,” he will bring me a pack
age of excellent Turkish cigarettes.
Just why the mention of an Iowa
city produces ice water, and the
name of one of Michigan's All
America halfbacks brings forth cig
arettes, I don’t know. But it does,
and that is sufficient for me. Some
rime today I am going to mention
Dellas and Red Grange, and heaven
knows what 111 get.
Pleasing To The Eye.
Pew Americans, I among them,
ever associated Turkish people with
a great sense of feeling for the dec
orative and the beautiful. But they
definitely have it. Everything that
can be made more pleasing to the eye
is done. The horses wear necklaces,
for example. He may be a drab old
plug, pulling a drab old cart, but
around his neck will be blue beads,*
red beads, and back of his ear he
will sport a jaunty feather.
We saw an old fellow pushing a
melon cart. His suit was threadbare,
but in every buttonhole there was a
different colored flower, and his
melons didn’t rest on the floor of the
cart, but were cushioned by fresh
ferns and flowers artistically ar
ranged.
At night, the streets of Istanbul
are filled with peddlers, selling al
most everything you can imagine.
They carry their wares on tremend
ous trays, balanced on their heads.
The trays are ringed by lighted
candles to attract attention, and
i Jifj Pi
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:F"~~2'' V
CAMERAS
each tray Is a little masterpiece of
arrangement. Sven when the trays
hold nothing more valuable than
shoe laces and pencils, It la obvious
that hours of work were spent mak
ing the tray itself beautiful.
If you don't mind, IH continue
talking Turkey.
Respect for Csta.
Turkish people are the world's
greatest lovers of pigeons and cats,
and treat them with the greatest
respect. Here in the Park Hotel,
which certainly Is one of the world’s
fine hotels, you dine on a balcony
overlooking the Bosporus and the
Golden Horn. Cats roam about your
feet, mee-owing for food, and
pigeons by the hundreds come
swooping around to alight on your
table and share your almonds and
potato chips. Bo well do pigeons
know how beloved they are in this
country that you can shake your
fist right In one’s face, as he sits
on your dining table, and he won’t
budge an Inch. ‘His attitude is that
he has been a guest longer than you
have, and if anybody is leaving it's
you, not he. <
As for cats, all I can say is that
if I were a cat I would make my
feline way to Istanbul and take
out citizenship papers. Before he
will run over a cat, a taxi driver will
crash his machine into a wall. Cats
are so fat here that I believe some
enterprising young fellow could get
rich by opening a cat corset shop.
Istanbul’s climate in summer is
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